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
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.