• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
  • Our Commercial Technology team has established itself as one of the strongest in the UK. We are ranked in Legal 500, Chambers & Partners and PLC Which Lawyer, with four of our partners recommended.
  • Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
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  • We have an industry-leading reputation for our outsourcing expertise. Our professionals deliver credible legal advice to providers and acquirers of IT and business process outsourcing (BPO) services.
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  • At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
  • Acting for market leaders and market changers within the media industry, we combine in-depth knowledge of the structural technology that underpins content delivery and the impact of digitisation on the rights of producers and consumers.
  • We understand the risks facing this sector and work with our clients to conquer those challenges. Testimony to our success is the continued growth in our team of professionals and the clients we serve.
  • We advise at the forefront of the technological intersection between life sciences and healthcare. We advise leading technology and data analytics providers, healthcare institutions as well as manufacturers of medical devices, pharmaceuticals and biotechnological products.
  • For clients operating in the online sector, our teams are structured to meet their commercial, financing, M&A, competition and regulatory, employment and intellectual property legal needs.
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  • The mobile and telecoms sector is fast changing and hugely dependent on technology advances. We help mobile and wireless and fixed telecoms clients to tackle the legal challenges that this evolving sector presents.
  • Whether ERP, Linux or Windows; software or infrastructure as a service in the cloud, in a virtualised environment, or as a mobile or service-oriented architecture, we have the experience to resolve legal issues across the spectrum of commercial computer platforms.
  • Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
  • We have extensive experience of advising customers and suppliers in the retail sector on technology development, licensing and supply projects, and in advising on all aspects of procurement and online operations.
  • Our legal professionals work alongside social media providers and users in relation to the commercial, privacy, data, advertising, intellectual property, employment and corporate issues that arise in this dynamic sector.
  • Our years of working alongside diverse software clients have given us an in-depth understanding of the dynamics of the software marketplace, market practice and alternative negotiating strategies.
  • Working with direct providers of travel services, including aggregators, facilitators and suppliers of transport and technology, our team has developed a unique specialist knowledge of the sector
  • Your life as an entrepreneur is full of daily challenges as you seek to grow your business. One of the key strengths of our firm is that we understand these challenges.
  • Kemp Little is trusted by some of the world’s leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
  • HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
  • FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they don’t give away to get you started.

Exploiting the cloud and mitigating the risk of SaaS supplier failure

The cloud is here to stay and according to a recent survey[i], organisations are going to be investing more in cloud services to support their core business operations.

But have companies properly considered the risks of SaaS supplier failure if the software is supporting their core processes?

The Kemp Little Consulting (KLC) team has been working with NCC Group to identify some of the risks of SaaS supplier failure and to identify the main problems that end user organisations would need to solve to effectively mitigate these risks.

In the on-premise world, the main way of mitigating against software supplier failure is Software Escrow. This was designed as a means of gaining access to source code for an application in the event of supplier failure.  If a supplier goes bust, there is no short term problem as the application and the business processes supported by the application continue to work and the corporate data remains within the control of the end user.  However, the end user company has a  problem as they will not be able to maintain the application long term and this issue is effectively solved by Software Escrow and related services such as verification.

In the cloud arena, however, the situation is different. If the supplier fails there is potentially an immediate problem of the SaaS service being switched off almost straightaway because the software supplier no longer has the cash to continue to pay for its hosting service or to pay its key staff. For the end user, this means that they no longer have access to the application; the business process supported by the application can no longer operate and the end user organisation loses access to their data.

The business impact of this loss will vary depending upon the type of application affected:

  • Business Process Critical (e.g. finance, HR, sales and supply chain)
  • Data Critical (e.g. analytics or document collaboration)
  • Utility (e.g. web filtering, MDM, presentational or derived data)

In our research, we found that both suppliers of cloud solutions and end user organisations had not properly thought through the implications of these new risks, nor the services they would require to mitigate against the risk of supplier failure.

The primary concerns that end user customers had were around their business critical data. They were concerned by lack of access to data; loss of data; the risk of compliance breach by losing control of their data and how they might re-build their data into usable form if they could get it back. There was also concern about access to funding to keep the infrastructure running in the SaaS vendor in order to buy time to make alternative arrangements.

They were much less concerned about access to the application or getting access to the source code.

This is understandable as their primary concern would be getting their data back and porting it to another solution to get the business back up and running.

In a separate part of our study, the Kemp Little commercial team looked at the state of the market of the provisions generally found in SaaS contracts to deal with the event of supplier failure. The team found that even if appropriate clauses were negotiated into the contract at the outset, there may be real difficulties in practically enforcing those terms in an insolvency situation.

End user organisations were more concerned than SaaS suppliers about their capability to deal with all of these problems and were amenable to procuring services from third parties to help them mitigate the risks and solve the problems they could not solve purely by contractual means.

End users were also concerned that many SaaS solutions are initially procured by “Shadow-IT” departments as part of rapid business improvement projects and deployed as pilots where the business risks of failure are low. However, these solutions can often end up being rolled out globally quite quickly and key parts of the business become dependent upon them by stealth.

It is therefore considered important for companies to develop a deep understanding of their SaaS estate and regularly review the risks of supplier failure and put in place appropriate risk mitigation measures.

KLC recently worked with global information assurance specialist NCC Group to help it enhance the service model for its SaaS Assured service.

For more information about how to mitigate the risks of SaaS supplier failure, please contact David Turver (KLC) or Chris Hill (KL Commercial Team).

You can also find more information on NCC Group’s current SaaS Assured offering here.

 

[i] http://www.kpmg.com/us/en/issuesandinsights/articlespublications/press-releases/pages/kpmg-report-global-business-executives-see-cloud-driving-business-transformation-and-improving-customer-alignment.aspx