Results of CIO Survey Demonstrate Importance of Technology Escrow Verification
Iron Mountain Digital Study Shows 66 Percent of Escrow Deposits are Incomplete; 92 Percent Require Additional Input from Programmers
Monday, April 20, 2009
ORLANDO, FL - IACCM Americas 2009 - April 20, 2009 - Iron Mountain Digital, the technology arm of Iron Mountain Incorporated (NYSE: IRM), will announce the results of its recent survey on verification services for technology escrow, including software escrow and source code escrow, at the International Association for Contract & Commercial Management’s IACCM Americas 2009 conference in Orlando, Florida, April 23-24.
The theme of this year’s IACCM conference is “Managing Commitments in Turbulent Times.” Iron Mountain’s focus on the imperative of coupling verification services with technology escrow is an important and timely topic. Tim Cummins, IACCM’s CEO states, “Current economic conditions have placed enormous stress on the ability of most companies to monitor risk. The use of reliable specialists—such as Iron Mountain—represents good governance and smart risk management. It is certainly a strategy being followed by many of our top-performing members.”
As IT departments and contract managers work together to license technology, they look to put safeguards in place in the event that the technology provider may go out of business, merge with or get acquired by another company, lay off key technical staff, or fail to provide support for their technology. Savvy organizations protect themselves from the occurrence of such unforeseen circumstances with technology escrow agreements.
“Technology escrows are like ‘prenups’ for software vendor relationships,” explains John Boruvka, vice president of intellectual property management at Iron Mountain Digital. “No one goes into a marriage thinking it’s going to fail, but prenuptial agreements make for great safeguards—just in case.” With escrows in place, organizations can ensure their access to critical application source code should disaster strike. And technical verification services provide added assurance that all of the necessary components are included in the escrow deposit, and are in working order.
IDG Research Services polled and received responses from 174 information technology and business leaders across a broad range of industries, and 62 percent of responding companies reported that they always or sometimes include escrow as part of their software agreements. Why do CIOs rely on escrow arrangements? Most respondents point to the obvious: They’re a precaution, should the licensing vendor go out of business. Slightly fewer respondents, meanwhile, say it protects them in case the vendor stops or decreases support, while still others say it is part of a larger risk management policy.
However, according to Iron Mountain Digital statistics, 66 percent of technology escrow deposits are incomplete, while an astounding 92 percent require additional input from programmers. “The whole idea behind any technology or software escrow is to be able to put released software to work immediately,” according to Boruvka. “Yet, as these statistics suggest, we routinely find that there is not enough information to hit the ground running.”
Verification services provide a quality control mechanism for validating that an escrow deposit contains what’s needed—and what’s contracted—and that the code will be usable when it’s needed. There are varying levels of service, chosen based on the unique requirements and risk thresholds associated with specific applications. Many CIOs are using verification services in order to validate the completeness and accuracy of their escrow deposits while increasing their confidence in them. In fact, in the IDG survey, 46 percent of respondents reported that they consider it critical or very important that their escrow agreement includes the rights to perform verification services by a third party.
The IDG Research survey reveals how technology escrow agreements and verification services can safeguard investments against contract breaches, discontinued support and vendor bankruptcy, all of which pose even greater risks in a difficult economic climate. For the complete survey results, download Iron Mountain Digital’s white paper titled, “How to Minimize Risk with a Software Vendor Prenup,” on the Intellectual Property Protection section of Iron Mountain’s Knowledge Center.
About Iron Mountain Digital
Iron Mountain Digital is the world's leading provider of Storage-as-a Service solutions for data protection and recovery, archiving, eDiscovery and intellectual property management. The technology arm of Iron Mountain Incorporated offers a comprehensive suite of solutions to thousands of companies around the world, directly and through a worldwide network of channel partners. Iron Mountain Digital is based in Southborough, Mass.
About Iron Mountain
Iron Mountain Incorporated (NYSE:IRM) helps organizations around the world reduce the costs and risks associated with information protection and storage. The company offers comprehensive records management and data protection solutions, along with the expertise and experience to address complex information challenges such as rising storage costs, litigation, regulatory compliance and disaster recovery. Founded in 1951, Iron Mountain is a trusted partner to more than 120,000 corporate clients throughout North America, Europe, Latin America and Asia Pacific. For more information, visit the company's Web site at www.ironmountain.com.