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What is Software Escrow?
Software Escrow is a service where the Source Code of an application is held by an independent party - the escrow agent. If the Software Company which wrote the application is not able to support it, through for example bankruptcy, the Source Code is released by the Escrow Agent to the Software User. The Software User can then make modifications to the software as they see fit.
Software Escrow Guardians is an Escrow Agent. It holds the source code of the application(s) specified in the escrow agreement.
For three party software escrow agreements, the agreement is signed by:
- the software User,
- the software developer, and
- Software Escrow Guardians
For two party software escrow agreements, the agreement is signed by:
- the software developer, and
- Software Escrow Guardians
Software Escrow Guardians releases the source code to the User when a release event occurs. The release events are listed in the software escrow agreement.
Almost all these events can be summarised in one sentence: the software developer is not longer able to maintain or enhance the software for the User. This may be because:
- the software company is not longer in business
- the software company was taken over by another software company and that company does not wish to support the software any longer
- a key person has left the software company and the software company cannot or does not wish to replace the skills of the person who has left.
Benefits for Developers
For the Software Developer, having an application's source code in escrow has the following benefits:
- improve sales opportunities
- protection of intellectual property
- alternate archive of in-production applications
Are you are exporting software or selling software locally? Having the source code in escrow gives the potential purchaser confidence that their investment risk is mitigated.
Software Escrow Guardians is an Industry Partner
to the Certified for Microsoft Dynamics program.This means that any Microsoft Partner who has written an independent software application for Microsoft Dynamics and who wishes to attain for that application Certified for Microsoft Dynamics status, we are a featured software escrow provider that can be entrusted to hold the source code.
Benefits for Software Users
For the Software User, having an application's source code in escrow has the following benefits:
In both cases the software user obtains access to the source code so that their applications can be updated as required.
When should you consider software escrow?
- When there is a business impacting risk, should the developer cease to able to support the application!
- When the application is business critical!
- When the intellectual property of the application is tied up in a small number of people!
- When the application has built in an uncommon (in today's terms) language!
- When to code libraries are not current!