The online world has steadily been moving from hard disks and in-house servers into the ever-growing cloud. In terms of storage, maintenance, and even security, for most businesses this is a good thing. However, the cloud rings a whole new set of issues and practices that users and companies need to adapt to.

Imagine the following scenario, one more usual and more preventable than we might think. A company scales cloud technology and software services over months or years to grow its business. One day and without warning, C-level executives in charge of operations and IT get a call from a cloud service provider that the provider is going bankrupt and will be closing shop in a week or less. This leaves the company with less than a week to salvage all data, processes, and a number of other things from this particular cloud service. It could also mean a pause in the company’s own operations with clients or partners. And that, in turn, could spell disaster for the business.

How it begins

While cloud companies and services are among the fastest growing sectors in IT, the fact is that 25% or more of these go out of business within the first couple of years. Many may appear to be financially and technically stable, but are met with such fast and high demands in this fast-paced industry that nothing guarantees their stability.

The traditional way of vetting a new business partner or vendor is to take a good look at their financials and past dealings. Healthy financial statements, stable business growth, and a long list of happy customers should indicate that the vendor is reliable. This, however, is not true when it comes to SaaS companies. Unfortunately, there’s no one factor to blame this one either. The industry is growing so rapidly and technology advancing at such a pace, that remaining competitive is truly a gladiator sport and outcomes unpredictable.

In the case of British-based 2e2, which suddenly collapsed and disappeared in 2013, there were almost no indications that the cloud service provider would go belly up, except for the industry rumors making rounds. Many large corporate customers of the vendor even went as far as to do an in-depth check of 2e2’s financials and status, coming up with the usual great numbers and perspective. Within months, 2e2 filed for bankruptcy, leaving customers with just a couple of days to recover and store their data elsewhere.

CTOs, CIOs, and COOs were left having to explain to staff and their own customers, who can often barely understand these systems and tools, that their data centers would be gone overnight and all of the company’s systems and perhaps new environments and interfaces being developed within the company would all be gone.

Averting the crisis

If and when there are resources and time to grab all of the data, systems, and other variables from the SaaS platform going under, transferring all systems to a new working environment will take weeks and sometimes months. Much of this has to be done manually, to keep the business and what it offers to its own customers up and running after the company’s mission critical third-party SaaS provider is gone.

Usually, there are a few options to mend this crisis, but very few of them realistic for most companies relying on cloud service providers. The first option is always to bring everything back in-house, which would mean the company would have to have a functional IT department fully stocked to handle it. This usually doesn’t make much sense to most companies, considering that third-party SaaS providers are used in the first place to sae the company the overhead and staffing of such an IT department. Building such a department would be a major undertaking, even for large multinationals. Another option is finding a new, similar SaaS provider or simply having one as backup before any mission critical service goes out of business at all. But keeping systems up and running in the meantime is the real issue.

Preventing diSaaSter

As the cloud industry develops, so do its standards and best practices. While standard business-related laws and regulations apply to cloud service providers, a new set of regulations and best practices are needed to deal with these brand new issues that are emerging from the industry. Legally speaking, a cloud service provider can file for bankruptcy and stop delivering services or products like any other business. But the implications of a retail chain partner going under and a critical cloud service that a company uses for daily operations disappearing overnight are quite different.

The most rational and safest option is to prepare a cloud provider to go out of business, with the odds unfortunately being so much against them. This, however, is exactly the fear that prevents many modern businesses from turning to SaaS solutions to operate their company. But there is a very simple solution in place for all of it – built to reassure and prevent disaster from happening. The entire system is reflective of how businesses have planned for disaster recovery historically.

Typically, any business ranks their tools, applications, and systems from most critical to least critical for business operations. This too is exactly what should be done for all SaaS and cloud applications being used. High-value data and applications are backed up regularly and must have the highest levels of availability. Services such as core enterprise apps in the cloud that are crucial to daily operations, for example, should also be available as live copies in another cloud provider or on the company’s own servers. Anything non-critical would only need to be backed up perhaps once a month or never.

Cloud and SaaS providers also offer service-level agreements, which guarantee specific uptime and other terms of access. Before even considering laying a good part of a company’s success on the success and availability of a SaaS provider, there s also a fairly air-tight and secure option of negotiating a source code escrow with the vendor. In today’s day and age, most cloud and software providers are more than happy to turn to the escrow solution, to ensure security for their clients’ and their own viability.

Software escrow is a service that protects the software data, source code, and other documentation necessary for the uninterrupted functioning of software – in other words, everything that would otherwise be lost within days when a software vendor goes out of business. Simply put, a specialized third party agent makes sure that both the company and cloud provider or software vendor are protected and that the purchased software does what it’s supposed to do for the duration of the contract. This, of course, is not a permanent solution, but certainly protects all sides and allow for more than enough time for a business to procure and secure a new SaaS or cloud provider when their trusted provider goes out of business.