Major SaaS data security concerns: What can you do to minimize the risk?

Jorge Sagastume

Safety gear kit image via Shutterstock

In this article, Jorge Sagastume, Vice President at EscrowTech International, Inc. talks about the risks and issues of using SaaS.

Recent years have seen more and more businesses opting for Software as a Service (SaaS), instead of on-premise software options. Still, SaaS and cloud data storage are both relatively young technologies and, as with all things new, they both carry certain risks.

Knowing what you’re dealing with is crucial for successfully running a business. So, what are the risks? Can you predict them and what can you do to prevent them? This article will provide some comprehensive answers to those questions.

What are the risks of using SaaS?

The first rule of crisis management is to anticipate any possible mishaps. So let’s start at the beginning and define what might go wrong when using SaaS.

There are three main concerns when using Saas:

  • Data breach – Although this issue is possible even if you use on-premise software, illegal data intrusions as a result of hacking or industrial espionage are a real concern.
  • Availability of the software – Internet outage or unscheduled maintenance may make the used software unavailable. With SaaS, you are at the mercy of your service provider and service degradation or inadequate uptime performance may occur.
  • Financial stability of your cloud provider – Unfortunately, you have no way of predicting how your cloud provider will do business-wise. If the company goes under, there is a chance you’ll be unable to access and process your data.

So what can be done?

It’s important to point out that SaaS and cloud providers are continuously working on developing solutions and upgrading their service.

Also, users are becoming more informed and proactive. A recent study has shown that almost 80 percent of US-based users, and more than 70 percent of UK users “are aware of standalone services that allow them to backup and restore SaaS information separate of the provider.” This is a clear indication that people are doing what they can to secure their work and data, and not leave things to chance.

With the huge benefits of SaaS services, it would be illogical to avoid using it because of a few minor concerns. Just for illustration, an average cost reduction of IT service expenses when using SaaS services is 15 percent.

So how can you minimize the risk and secure your work?

To decrease the possibility of a data breach, first of all, make sure your SaaS provider has a solid security plan. When negotiating your contract, ask them if they’ve done a risk analysis and what are their security and disaster recovery methods. Also, implementing your own backup system, separate from the provider, is always a good idea.

For business continuity protection, utilize a software escrow. If your SaaS provider has a severe service interruption, software escrow will enable you to access the software you’re using along with your data. It’s a great way to ensure that your business can continue, no matter how long it takes to fix the problem with the SaaS service provider.

When dealing with software escrow, you have to make sure that you are protected. Be mindful of the release terms of your escrow agreement and confirm that any software updates are escrow protected. Although an escrow agreement will also guard you against potential service provider insolvencies, there is a downside to it. If that happens, you will need time to make the necessary infrastructure, like servers or a substitute SaaS solution, operational. Depending on your escrow agreement, this time can be as short as 24 hours.

Still, it would be smart to check out the provider’s financial and legal standing before you commit to a deal with them.


Like with most things in life, you’ll have to be smart when dealing with your SaaS! Keeping in mind all the things that can go wrong and being prepared will make your business operation endeavors relatively painless.

Worst case scenarios are quite uncommon, and with any luck, you’ll avoid them completely. However, by following our simple instructions you won’t be caught off guard if the disaster does happen.

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Jorge Sagastume

Jorge Sagastume is Vice President at EscrowTech International, Inc. He has 12 years of experience protecting IP and earning the trust of the greatest companies in the world. Jorge has been invited to speak on IP issues by foreign governments and international agencies. You can connect with Jorge on LinkedIn.

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