Why Software Escrow Deserves a Place in Your Disaster Recovery Policy
In the world of disaster recovery, most conversations focus on technical incident management. This usually results in data backups, failover systems, and incident response playbooks. Yet, one critical area is often overlooked, which is business led risks.
What happens if your software vendor fails?
It’s completely outside of your control, but it results in loss of service and leaves the vendor unable to support you in any way. What happens next?
Whether you’re a growing scaleup or an established enterprise, reliance on third-party software is a necessity if you want to remain agile in today’s fast-moving world.
However, your disaster recovery plan may suddenly have a blind spot.
This can happen if just one of your software providers can no longer support their product.
The cause might be insolvency, severe disruption, changes following an acquisition, or even a shift in business priorities.
That’s where software escrow comes in.
Regulatory Pressure Is Mounting – How Adding Software Escrow To Your Disaster Recovery Policy Helps You Avoid Hefty Fines
In parallel with rising cyber and operational risks, global regulators are increasingly recognising third-party software dependency as a systemic issue and they’re acting accordingly.
For regulated entities, software escrow isn’t just a best practice. It’s quickly becoming a regulatory expectation. It offers an effective way to mitigate specific risks in both stressed and non-stressed scenarios.
Stressed situations include events like the failure or insolvency of a service provider. Non-stressed situations might involve a planned exit due to supplier performance issues, commercial changes, or strategic business decisions.
In both cases, these frameworks call for tested, effective plans that ensure continued service delivery even if a key vendor can no longer meet their obligations.
Regulations such as the Digital Operational Resilience Act (DORA) in the EU, the PRA’s SS2/21 in the UK, OSFI’s B10 in Canada, and CPS230 in Australia are now explicitly requiring regulated firms to assess and mitigate the risks associated with critical third-party suppliers.
In the United States, regulatory bodies including the Office of the Comptroller of the Currency (OCC), Federal Reserve Board, and Federal Deposit Insurance Corporation (FDIC) released updated third-party risk management guidance in 2024. This emphasised lifecycle oversight from due diligence to termination, highlighting tools such as source code escrow to ensure continuity in the event of vendor failure.
In parallel, the Federal Financial Institutions Examination Council (FFIEC) continues to underscore third-party risk management as a core component of operational resilience, with specific attention to continuity planning and access to critical technology assets.
Crucially, this includes preparing for supplier failure, whether due to insolvency, business wind-down, or disruption of services.
Embedding software escrow within your broader operational resilience program doesn’t only tick the compliance box. It also demonstrates a proactive, mature approach to supplier risk.
We’ve prepared a handy guide on global regulations and how software escrow can assist here.
Software Escrow’s place in The Modern Disaster Recovery Toolkit
Today’s businesses don’t just need disaster recovery. They need continuity, compliance, and control. Our range of software escrow services enables all three. By securing access to a vendor’s source code, deployment documentation, databases and other critical IP, you create a safety net that aligns with your wider risk and continuity objectives.
To really move beyond a box-ticking exercise, it’s not enough to simply have a software escrow agreement in place. You need to know it will work when it matters.
A typical disaster recovery (DR) program includes more than just backups. Mature organisations regularly run simulated outages and recovery tests to validate that business-critical systems can be restored quickly and effectively. These tests don’t just uncover technical gaps; they provide peace of mind and are increasingly expected by regulators and auditors alike.
Best practice DR frameworks recommend simulating a wide range of scenarios, including data centre failures, cyberattacks, and third-party supplier outages. It’s not just about whether you have a plan, it’s about whether that plan works under pressure if needed to be called upon.
The same principle applies to software escrow.
How Software Escrow Verification Services Add Resilience To Your Software Continuity Plans
At The Escrow Company, our verification services are designed to bring the same rigour and resilience to your software continuity plans. We offer a full suite of verification options, from validating the deployment of the deposited materials, to a full rebuild and deployment testing of SaaS environments.
The most comprehensive of these actively simulate a stressed exit or recovery, ensuring that your business can access, redeploy, and operate the application in a real-world trigger event, without relying on the original vendor.
For cloud-first applications, this includes validation of:
- Source code availability and completeness
- Build instructions and infrastructure-as-code
- Containerised components and deployment automation
- Inclusion of solution databases
- Access credentials and system documentation
This isn’t just a technical exercise, it’s an operational recovery rehearsal. By aligning software escrow verification with your Disaster Recovery schedule, you ensure that recovery isn’t theoretical, it’s tested, repeatable, and ready when needed.
At The Escrow Company, our deep technical experience, particularly with AWS and Microsoft Azure, means we understand how your systems are built and how they need to be recovered. That’s part of our commitment to Technical excellence, Trust, and Transparency.
Software Escrow and Disaster Recovery: A Strategic Fit for Resilience
Adding software escrow to your disaster recovery plan brings immediate and long-term value:
- Maintain Access and Continuity: Should your software vendor fail, your teams can continue running mission-critical systems with minimal disruption.
- Meet Compliance Obligations: Many frameworks now require contingency for supplier failure. Software escrow ensures you’re not caught off-guard.
- Minimise Downtime: With pre-tested, automated deposits and secure storage accredited under ISO 27001/27017, your escrow assets are accessible, up-to-date, and deployment-ready.
In short, you’re not just covering your legal bases, you’re future-proofing your business operations whilst helping to avoid hefty fines for falling foul of the latest legislation.
Designed for Today’s Business Needs
From flexible agreement terms to jurisdictional alignment, The Escrow Company works with each client to build solutions that reflect real-world pressures – not just legal requirements.
We’re proud to support clients across EMEA, APAC, and the Americas through our UK, US, and Australian entities. Whether you’re a fintech regulated in London, a SaaS company scaling across North America, or a government department in Sydney, we can support your needs locally – with the global reach to match.
We also understand that onboarding should be part of the solution, not another problem. Our smooth, responsive process ensures your software escrow agreement is set up quickly, and with minimal internal overhead.
How to Choose the Right Software Escrow Partner?
We often advise organisations to evaluate software escrow services in five key areas:
- Pricing – Are the fees clear, inclusive and competitive? At The Escrow Company, we offer open transparent pricing with no hidden extras.
- Security – How is your IP protected? Our cloud escrow deposits meet the highest security standards, accredited under ISO 27001/27017.
- Insurance – What liability coverage is offered? We provide one of the highest levels of liability available in the market, across all regions.
- Flexibility – How well does the agreement match your legal and operational needs? We have over 10 years of experience in the software escrow market allowing us to offer the flexibility you need whist still maintaining the highest levels of security and compliance.
- Service – Are you getting fast, knowledgeable support and business continuity planning from real people who understand your industry?
We believe that strong disaster recovery comes from strong partnerships. That’s why we don’t just manage code, we manage relationships. From automated deposits to tailored continuity planning, our team is here to provide pragmatic, reliable advice.
Final Thoughts
When disaster strikes, having a tested backup plan is everything. With software escrow integrated into your policy, you’re not just protecting against failure, you’re investing in resilience. For modern organisations navigating third-party risk, The Escrow Company provides more than protection. We deliver peace of mind.
