WHAT IS SOFTWARE ESCROW GUARDIANS?
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 SOFTWARE USERS
For the Software User, having an application's source code in escrow has the following benefits:
01
Business continuity
Software Insurance / Risk Mitigation
The reason for and outcome of having software in escrow is to mitigate risk and reduce costs should the software developer cease to be able to support your business application(s) - that is software insurance.
To do this you must have access to the source code.
If the software developer has not provided you with the source code, or has put restrictions on the use of the source code as part of the license agreement, then you must have the source code in escrow to mitigate that risk.
Should a release event occur, we follow the procedures in the escrow agreement and release the source code libraries to you.
Once you have the source code you can, either
- Use your own staff to maintain the application, or
- Retain another developer to perform the maintenance for you
11
Risk reduction
What happens if the developer fails?
What happens if the Software Developer is not able to maintain your software?
In both of these scenarios, the user is faced with the situation where it wishes to enhance or debug the application, but the software developer is not longer able to give that support because of:
Takeover by another company which does not wish to provide support
Old version of the application
Loss of key development staff
Insufficient resources/time to undertaken the work as promised in the support agreement
What can you do?
Negotiate with the developer to provide the level of service promised
Get hold of the source code for the application and take control yourself.
Prerequisites
Arrange for the source code to be placed in escrow when you are negotiating the development or provision of the software solution
Arrange for the source code to be placed in escrow as soon as possible
Include in your business risk plan, the mitigation strategy of having business critical source code in escrow. Include it in your Disaster Recovery plan, the scenario of developer failure. Periodically simulate the scenario.
BENEFITS FOR DEVELOPERS
For the Software Developer, having an application's source code in escrow has the following benefits:
01
Improve sales opportunities
10
Protection of intellectual property
11
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 for the provision of software escrow services to the Certified for Microsoft Dynamics program