Software Escrow

The only way to protect your investment in technology you do not own is to use an escrow agreement. If you commission a third party developer to code an application on your behalf that performs a critical business function and you do not own the IP to the completed application and only use it on a license and support basis then you are at risk. If you license a generic application from a software vendor and do not ensure that there is a verified copy of the code held in escrow then you are at risk. If you use an SaaS product that has no escrow in place then you are at risk.

Software escrow agreements are a very simple, cost effective method of protecting your business critical applications and ensuring your continued use in the event of vendor failure. For a relatively small annual fee you can place the source code, associated documentation and IPR in escrow with one of many escrow agent worldwide and should a critical event occur gain access to the contents of the escrow deposit.

This is the ONLY way you can secure your continued use of a 3rd party application.

You may think that the above statement is nonsense and in some cases you may be correct but in most cases you are wrong. You may say "well what good would it do if i did get the code" or "what would anyone do with 5 million lines of code" or even "they'll never go bust" all these statements are valid but if you use one of these excuses then yore missing the whole point of an escrow agreement.

What usually happens when a software owner gets into trouble? do they go bust, maybe? do their clients suffer, sometimes? BUT what always happens is that a competitor or another software owner will step in and purchase the critical assets of the failing software company, FACT?

What does this mean? This means that the users of the failed application will either have to transfer to the new owners replacement application or sign up to the new owners terms of license and maintenance which potential could be significantly more than a user was paying before.

Would it not be useful to have a strong negotiating position with any new owner of an application and not be at the mercy of new owners license fee or maintenance demands?

This is the essence of software escrow.