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MIS Systems Thread, Business continuity in the cloud in Technical; Originally Posted by GREED I feel the biggest concern is not the access to the source code in escrow, because ...
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    Quote Originally Posted by GREED View Post
    I feel the biggest concern is not the access to the source code in escrow, because lets face it in the days, week or even months after an event, what schools or LAs have the technical ability or resource to be able to make legitimate use of that (picture Capita going under 2 weeks prior to Exams Download Day, or before the Autumn Census update is released).
    This is a valid point and the problem exists today with Capita.


    If we take Furlong (Schoolbase) - at random, based on the information they provide in response to your survey - http://eduwareconsulting.co.uk/what_is_the_mis_survey/furlong/ - I know they use Rackspace (UK). I know Rackspace and I know it wouldn't be too difficult to negotiate something to allow the servers to keep running. I know, again, based on the responses from the survey, it wouldn't be too difficult to migrate to a.n.other MIS system. Ideally if you where doing it at scale (ie more then just a few schools) you'd broker a official deal with Rackspace and Furlong so if the dreaded day came, at least Rackspace already knows who you are and there is a proper process in place to follow. Also you'd have maybe a.n.other recommend MIS supplier or at least a backup MIS supplier -someone you know can migrate you quickly if need be.

    Far as I see, they are just as no more risky then Capita.

    PS: Cheers @GREED for pulling the data together - made that really quick and easy!

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    Because of the constant revenue streams that most SaaS applications have, if a SaaS-provider files for bankruptcy the liquidator will keep that revenue stream going because they can use it to pay off creditors. In order to do so they'll have to keep the services online. They'll shut everything else down like support, sales, marketing, but I see no reason that they'd close a revenue stream.

    Obviously that's not the cast iron guarantee that you're after. To achieve such a guarantee I would imagine the SaaS provider would need to have some sort of hosting continuity agreement with their hosting supplier (if not the supplier themselves, then a separate legal entity), that the payment for services will be covered for some duration of time if the worst does happen, so that customers can reasonably find alternatives.

    The most fundamental negation of risk though, is that the customer can acquire data backups on demand to their own servers, and does so periodically.
    Last edited by mikecampbell; 25th June 2014 at 04:22 PM.

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    Not really... because if all they have is the hosting ability would you go with them? Or stay with them? I also wouldn't see it on its own as a revenue stream, we pay capita for their service and support not hosting. Yet that it the biggest loss should this happen.

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    Quote Originally Posted by mikecampbell View Post
    Because of the constant revenue streams that most SaaS applications have, if a SaaS-provider files for bankruptcy the liquidator will keep that revenue stream going because they can use it to pay off creditors. In order to do so they'll have to keep the services online. They'll shut everything else down like support, sales, marketing, but I see no reason that they'd close a revenue stream.
    Presumably a supplier goes into liquidation because their costs are outstripping their income and have been for some time. The liquidators will want to stem the losses and that means that ANY cost will be shut down, from support staff to hosting services. IMO it is extremely unlikely that in a situation of supplier going bust, the liquidators will keep services running.

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    Quote Originally Posted by PhilNeal View Post
    In the perpetual licence on premise world, customers are not immediately affected if their supplier suddenly ceases to operate; the processes and data remain accessible. In the cloud world I have yet to find an established safety net should the unthinkable occur? Whilst I would expect the appointed administrators to try to keep the business going until a buyer could be found, that isnít something that is contractually binding.
    I would expect in teh event of the failure of the supplier as a viable business that :

    A licence to use the software is granted to the end customer.
    The supplier to have insurance in place that would guarantee a third party could operate the service for a limited time but without end user support. That third party would aim within that time to to re-provision service as a standard virtual appliance. The customer can then choose how best to host the service beyond that time, for the time they need to find another MIS and migrate their data.

    I don't think that's a particularly neat solution but it does try to address continuity of the service while a migration plan can be put in place without duplicating the entire supply.

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    Any solution needs to be beyond the grasp of administrators

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    Quote Originally Posted by GREED View Post
    Not really... because if all they have is the hosting ability would you go with them? Or stay with them? I also wouldn't see it on its own as a revenue stream, we pay capita for their service and support not hosting. Yet that it the biggest loss should this happen.
    Uh, I was by no means suggesting it was a long-term thing, obviously the customer would have to find another supplier, but it gives them time.

    Quote Originally Posted by pcstru View Post
    Presumably a supplier goes into liquidation because their costs are outstripping their income and have been for some time. The liquidators will want to stem the losses and that means that ANY cost will be shut down, from support staff to hosting services. IMO it is extremely unlikely that in a situation of supplier going bust, the liquidators will keep services running.
    For SaaS providers, the actual infrastructure costs are a pittance, they couldn't possibly be making a loss on that alone. So my point was, the liquidators will shut down all operations, but they wouldn't necessarily have any reason to shut down the application if they can continue getting revenue from customers for who want to continue using the legacy system until they find an alternative.

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    Quote Originally Posted by mikecampbell View Post
    For SaaS providers, the actual infrastructure costs are a pittance, they couldn't possibly be making a loss on that alone. So my point was, the liquidators will shut down all operations, but they wouldn't necessarily have any reason to shut down the application if they can continue getting revenue from customers for who want to continue using the legacy system until they find an alternative.
    Are they? Actual examples suggest not. With e2e the administrators basically held the customers to ransom - stump up thousands * right now* or lose access to your service. With an MIS, if the administrators can't offer support, how do they offer a service? The income stream is generally from customers on a yearly renewal or conversion of sales leads. Who will be renewing for a year or singing up new customers when the business is in administration? Meanwhile the operational costs are ongoing. If the administrators didn't halt the costs, they would not be doing their job securing the any remaining assets for creditors (the most important of which is the administrators charges!)

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    I can't image cloud service providers run at 100% capacity, I'm pretty sure they could stomach a customer (MIS Supplier) going into liquidation and I'm pretty sure they'd happy renting it out directly for a few months. If the administration went to another MIS supplier and went, hey, fancy being our preferred new MIS supplier? Well just cover the hosting costs for a few months I'll bet you'll have a quite a few jump at the offer. The issue with be those few months of migrating away with little to no support - but this problems exists now with non-cloud products.

    You have to remember 2e2 is a bit different to a MIS supplier. For starts, no cloud provider would want to be all over the news as the ones that shutdown schools because of a bit of cash.

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    Perhaps there is a fundamental misunderstanding of the job of administrators. Generally, it is not the job of the administrators to *operate* the company, it is their job to wind it up. Generally administrators are appointed because the company is a) in debt, b) losing money and c) has exhausted it's lines of credit. The priority for the administrators is not the customers of the company, it is the creditors. When someone calls in the administrators on a supplier, your continuity plan had better not rely on the goodwill of that companies suppliers (who count as creditors) because no one calls in the administrators when they have goodwill (which is just another word for credit).

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    I think you're missing my point @pcstru, if you where the cloud provider, wouldn't you want to be paid something? Also, I'm not sure a MIS supplier would also be looking to sell it's user base either, the administrator would, they'll be cutting up what little is left to pay their creditors. I don't the administrators job has to conflict with doing the right thing, especially when it makes business sense.

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    Administrators are only in the picture when things *didn't* make business sense. It's a bit like saying, "don't worry if there is a fire, the firemen won't ruin the very expensive paintings with their nasty water because that doesn't make business sense". If your supplier goes bust, don't rely on the administrators to put your interests before those of the creditors and don't expect your interests to be the same as the creditors. A BCP that assumes that, frankly it would be rubbish.

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    I don't agree with your fire analogy, it's more like "get everyone out and the fire crew will try and get anyone left behind... [insert disclaimer]". I agree I wouldn't rely on goodwill either, but like I said, I would have a 3-way agreement with the MIS supplier and the cloud provider if it was me.

    Anyway I don't think I'll ever get you to agree. Clearly your happy (with self-hosted), and that's fine. I just don't think we should chop off options without good reason, it's like saying lets not record pupil data on computers because they might crash. You have to admit Capita as upped its game since more solid MIS suppliers have hit the market and that's good for schools and that good for everyone in the long run. It's good @PhilNeal has raised it as it needs to be thought about, even if their is no clear answer. In self-hosting terms its like, what if my server goes up? People will over complicate things but it basically boils down to doing backups and have processes in place to take over whilst the server gets rebuilt - like paper registers, printing the data collection sheets every term. What Phil has done is like when the analysts raised the point about Apple's future and the Apple only developers started to panic when they pointed out that if Apple didn't make enough money they would default on their tax return, despite having large cash reserves, most of their money is offshore to avoid being taxed, so they would have to pull the funds across and get heavily tax which would cause a minor debt into a big debt which ofcourse would cause the stock price to drop which could turn it into a major problem.

    Anyway, for a let's hopefully for everyone's sake we never have any school have to deal with a MIS supplier going under - cloud or otherwise - so we can keep this academic.

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    Many thanks for contributions to this thread; it has helped my thinking a lot.

    I am quite surprised that this issue hasnít been flushed out before as it is so fundamental.

    No one has pointed to an existing scheme that provides protection to end users so I will pursue this with government however I suspect that this will be regarded as an industry issue.

    In the absence of any protection scheme there do appear to be some clear indicators:

    • Under no circumstances should we host the data directly ourselves otherwise an administrator could close things down.
    • We need a contract with the hosting company that guarantees continued access to the data for a specified period.


    This doesn't provide protection should the hosting company go under so perhaps it is necessary to have a second provider mirroring the data? All this puts up the cost of the solution though!

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    Sound like good starting points to me Phil. The second separated setup is vital I think, and still believe a protected financial arrangement to pay for that for a period of time (along with the contract). As has been said above, when the administrators come in they will first look to seal the leaky gaps where money is escaping. Matt, the flaw in your point about they will want 'some' money coming in is void because administrators come in when money isn't coming in quickly enough, otherwise the 'some' money if it were good enough would mean the administrators were less likely to come in.

    It would be great to get an administrator on the line to find out what would happen in given circumstances... Phil you must be able to get hold of one?

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