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08 September 2021

Virtual Business Boosts New SaaS Organizational Models


According to Forbes, an estimated 163,735 businesses have closed in the U.S. since March 1, 2020, following a particularly tough year and one of the toughest in history. As a result, businesses are quickly adapting to adopting cloud/SaaS technologies and are looking at new ways to successfully run their business:

Top priorities noted for 2021 and beyond are:

  • How to scale in the cloud
  • How to remain secure and vigilant in the cloud
  • How to collaborate effectively with staff and clients remotely
  • Install new Governance

And last but not least, in terms of organizational structure, many companies have – or are looking at – creating teams solely to focus on SaaS and cloud technology risks.

What are the risks of Cloud and SaaS adoption?

One of the primary concerns of cloud customers are the lack of access to software, loss of data, and how they might re-build their applications and data into usable form if they could get it back. Specifically, the following tend to be a concern:

  • Reduced operational resilience in case of a SaaS application failure
  • Lack of cloud management skills held by in-house IT teams
  • Concentration risk from a widespread disruption
  • Regulation risk in terms of compliance requirements in regulated industries
  • Consumer risk for end user customers if their SaaS application fails

Unlike traditional on-premises software, the impact of disruption to cloud services is often immediate with sudden loss of access to both the application and data, highlighting the need for a business continuity plan which enables the quick recovery of services.

How are organisations adopting SaaS solutions post pandemic?

As mentioned above and a direct response to the COVID pandemic, we’ve observed that as companies rapidly adopt new SaaS technologies, they are also looking at how they change their operational approach and organizational structure.

In the banking and finance sector, for example, we’ve seen many banks create teams to solely focus on SaaS and cloud technology risks. We applaud this pre-emptive posture to prepare for these risks and develop a SaaS-based contingency plan. In fact, one study shows that 53% of all outages can be avoided if businesses take a proactive approach.

One way to proactively guard against SaaS application risk is with a cloud software escrow agreement. A cloud software escrow agreement is a simple three party arrangement with mutually agreed terms between the SaaS vendor, customer, and escrow provider. Under the terms of the agreement, the vendor deposits the materials into the escrow provider’s secure vault where it is safeguarded and can be released if required.

As summarized by Gartner in its Digital Markets 2021 Software Global Outlook report, “every aspect of how software and SaaS providers and their customers conduct business … has shifted toward a more agile, less-centralized model in the post-COVID era. These changes will not dissipate with the end of the pandemic, meaning software sellers must rise to meet their customers’ new needs and challenges.” We would add that part of the new needs and challenges around SaaS is to have providers and customers work together to ensure SaaS applications and data are securely protected.

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