Your SaaS Vendor Won’t Be Around Forever — Here’s What Indian Enterprises Are Doing About It
The average Indian enterprise now runs dozens of SaaS applications across its operations — ERP systems, HR platforms, CRM tools, financial software, and sector-specific applications that sit at the centre of daily business. Most of these applications are hosted, maintained, and controlled entirely by the vendor. What happens when one of those vendors disappears?
The SaaS Risk That Nobody Plans For
SaaS adoption has transformed how Indian businesses operate. Subscription-based software delivers flexibility, speed of deployment, and reduced infrastructure overhead. But it introduces a risk that on-premises software did not carry in the same form: the business is dependent on a vendor it does not control, running code it does not own, on infrastructure it cannot access.
Vendor risk in SaaS is not abstract. Software companies are acquired, pivot their products, exit markets, or simply shut down. A vendor that appeared stable at contract signing may look very different three years later. When a SaaS vendor fails or discontinues a product, the enterprise faces an immediate and unplanned transition — with no access to the underlying application code, no ability to maintain or modify the software, and no clean path to continuity.
What Forward-Thinking Indian Enterprises Are Doing
Enterprises that have thought carefully about SaaS risk are addressing it through SaaS escrow — an arrangement in which the SaaS vendor deposits the application’s source code, data, and operational documentation with an independent escrow agent. If a defined release event occurs, the enterprise receives the deposited materials and can engage a third party to maintain, host, or migrate the application.
This is not a niche concern. The RBI’s direction to financial institutions on software escrow applies equally to SaaS applications classified as critical — which, for most banks and NBFCs, covers a significant portion of their technology stack. BFSI enterprises that have been proactive in implementing SaaS escrow arrangements are not just managing vendor risk. They are positioning themselves ahead of regulatory expectations that are only going to tighten.
SaaS Escrow Is Not the Same as a Backup
A common misconception is that data backups address SaaS continuity risk. They do not. A backup preserves data — it does not preserve the ability to run, maintain, or modify the application that created and used that data. SaaS escrow preserves access to the source code and operational environment required to keep the application functional. These are fundamentally different protections, and one does not substitute for the other.
The other misconception worth addressing directly: SaaS escrow is software escrow, not payment escrow. The two serve entirely different purposes. EscrowNXT operates exclusively in the software and technology escrow space — this distinction matters because the legal frameworks, technical processes, and verification requirements are different in ways that a generalist or payment-focused provider is not equipped to address.
The Time to Act Is Before the Risk Materialises
Establishing a SaaS escrow arrangement takes time — deposit preparation, technical verification, and legal agreement execution cannot be rushed. The enterprises that benefit from SaaS escrow are those that put it in place during the good years, not after a vendor has announced a product discontinuation or entered administration. At that point, there is nothing to deposit and no time to verify.
EscrowNXT helps Indian enterprises manage SaaS vendor risk through professionally structured source code escrow arrangements for hosted and cloud-delivered applications. With over 20 years of dedicated escrow expertise and ISO-certified processes, we provide the assurance that continuity-conscious businesses need.
