12 Innovate

Service Continuity

SaaS service providers receive often the question how they can guaranty the service delivery also after bankruptcy.This is a normal question. By “normal” software implementations, customers have their own infrastructure and if a software supplier gets bankrupt, they can continue using the software. There are no direct implications for the supported business processes. If a SaaS-provider gets bankrupt, the screen could get black, service terminated.

The first guarantee on continuity is given by the characteristics of the service provisioning. In normal situations, the director carrier (bewindsvoerder) will try to keep the organization alive as long as possible. The services generates recurring income and the director carrier can use this income to pay the deptors.

Beside this guarantee, the providers and customers can make some special arrangements to increase the aspect of continuity.

1. As in the ‘normal’software world, customer and supplier can agree upon a so called Escrow agreement. Although the operational process behind this type of agreement are more complex than with ‘normal’ software. SaaS-software is updated more frequently (e.g. once a week). SaaS-infrastructure changes regularly (required infrastructure descriptions need to be present and actual). SaaS software often makes use of third party web services.

2. SaaS-providers can start a guarantee fund. If you go bankrupt, the service can be paid for out of this fund for a certain period of time, long enough for customers to migrate their data. Customers can ask extra for this type of service, if they want to have this guarantee.

3. SaaS-providers can make a deal with the hosting company so they get the rights to explore the service for certain times so customers have time to migrate.

4. SaaS-providers can make a deal in the SLA and/or contract, that the customer gets the right to install the SaaS software on their own premises in case of bankruptcy.

5. The customer can make a deal to pay for the service directly to the hoster and hire your personnel for a certain period of time, in case of bankruptcy.

So in case a SaaS-provider receives this question it gives him an opportunity to sell more. Make sure that this is part of the agreement.