Here’s Why SaaS Escrow is Booming
A recent Research and Markets report indicates that the global Saas escrow services market generated $5.4 billion in 2021 and is projected to reach an astronomical $18.4 billion by 2031.
What is SaaS escrow?
SaaS escrow is a specialized software protection solution that protects cloud-native software applications from internal and external security risks, critical errors, and misconfigurations that can negatively impact business functions.
Several factors catalyzed the demand for SaaS escrow services:
- Growing Dependence on SaaS
The Software industry’s evolution and the rise of trends like Agile development methodologies and SaaS have drastically impacted the software escrow industry. There has been a significant escalation in small and medium startups across the globe during the last few decades. An increased need for business flexibility, cost-effectiveness, and scalability has sparked the growth of cloud-based and SaaS providers. These providers turn to SaaS escrow to secure the continuity of their core business applications.
2. Mitigating Supplier Failure
There is a perception that dealing with small companies is riskier due to their lower financial resources and possible unprotected IP. Customers may have fears about the security of their business-critical data. Software escrow effectively minimizes the risk of doing business with smaller companies, putting them on the same level as larger industry rivals — another reason why more small and medium businesses opt for SaaS escrow services.
3. Compliance and Regulatory Requirements
Economic uncertainty, rising insolvencies, and the prevalence of data breaches are but a few factors that have prompted a growing number of enterprises to realize the value of a robust business continuity plan.
Financial, healthcare, retail, and government industries have strict compliance and regulatory requirements for data protection, privacy, and business continuity.
SaaS escrow provides a streamlined solution to regulatory compliance and the handling of workloads like confidential documents, IP (intellectual property), PII (personally identifiable information), medical and financial records, and other sensitive data. As a result, businesses in these highly regulated industries turn to SaaS escrow services to safeguard their business-critical applications.
4. Increase in Mergers and Acquisitions
Mergers and acquisitions are commonplace in the progressive SaaS landscape but lead to integration and security vulnerabilities. SaaS escrow acts as a safeguard against disruptions that could arise due to the change in ownership or control of the SaaS provider.
5. Impact of Covid-19
The pandemic highlighted the need for infrastructure to maintain critical processes and data efficiency. On top of this, the world is still reeling from post-pandemic economic insecurity. These conditions contributed to the growth of SaaS escrow as a service.
Typically, the growing demand for SaaS escrow services is driven by the need for risk mitigation, business continuity, compliance, and assurance of access to critical software assets in various situations.