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Frequently Asked Questions

Frequently Asked Questions about Software Escrow Services

About National Software Escrow, Inc.

National Software Escrow, Inc. (NSE) is an independent service provider of software source code protection services for software companies and their end users. With over 35 years of experience, your intellectual property will be safe and secure. Escrow materials will be stored, maintained, secured and preserved in either physical or electronic format, via physical or electronic delivery.

What is a Software Escrow?

Software Escrow Arrangement is an agreement that protects both parties in a License Agreement. Its purpose is to provide a Licensee with access to a Software Vendor’s source code if a release event agreed upon by the Parties occurs. This works by having a Software Vendor deposit their source code with an agent of an escrow account, who will then store it in a secure location. If a release event occurs, the agent will then release the source code to the Licensee. A Software Escrow Arrangement protects a Software Vendor’s interests, while permitting a Licensee to maintain their investment, if for example, the Software Vendor is unable to continue its operations.

As a Licensee, what could happen if I did not establish a Software Escrow Agreement with my Software Vendor?

Services provided by National Software Escrow, Inc. protect the interests of both Software Vendors and their customers. Your organization relies on Software Vendors for technical support and maintenance. This dependency, especially if it involves software related to mission-critical business operations, exposes you to certain risks. If, for instance, a Software Vendor went out of business or stopped supporting the licensed software for other reasons, your organization would likely suffer considerable losses in revenue and productivity. A Software Escrow Agreement gives you, under specific and controlled circumstances, access to the source code needed to maintain the technology.

As a Software Vendor, what could happen if I did not establish a Software Escrow Agreement with my Customer?

As a Software Vendor, you rely on your customers to contact you directly for technical support and maintenance. If source code was provided to your customers, a great deal of maintenance revenue would be lost due to your customers maintaining the software on their own. More importantly, a competent programmer or independent contractor at your customer’s location could potentially modify the existing program and/or develop a competing program.

What Types of Escrow Arrangements are Available?

NSE offers the following Escrow Arrangements:

  • Single Beneficiary – Designed for 1 Software Vendor and 1 Licensee aka (“Beneficiary”).
  • Multi-Beneficiary  – Designed for 1 Software Vendor and multiple Licensees aka (“Beneficiaries”).
  • Multi-Vendor  – Designed for 1 Licensee aka (“Beneficiary”) and multiple Software Vendors.

What Type of Software Escrow Arrangement is Right for me?

The type of Software Escrow Arrangement that is right for you depends on your organization’s business needs. Most Escrow Providers will offer an Escrow Arrangement that meets your needs, including a template Escrow Agreement to get you started. Review the terms and conditions of the Agreement in an effort to make certain that the Agreement protects the rights, interests and investments of both the Software Vendor and Licensee.

Read more about our Escrow Arrangements here.

How secure is NSE’s Storage?

Escrow materials can be stored, maintained, secured and preserved in either Physical or Electronic Format. Escrow Materials deposited in Physical Format will be stored, maintained, secured and preserved offline in an in-house vault. Escrow Materials deposited in Electronic Format will be stored, maintained, secured and preserved with file encryption.

Click here to learn more about NSE’s secure storage options for escrow deposit materials.

Couldn’t I have my Attorney act as Escrow Agent?

You could; however, NSE has retained the services of one of the country’s leading law firms whose specialists in computer related contracts understand completely the technical objectives of these sophisticated transactions. Our Escrow Agreements are carefully researched, sophisticated legal instruments designed to protect your rights, interests and investments, thus, saving you time and money from having an attorney draft one for you. In addition, most organizations want to engage the services of a neutral third party experienced in software source code escrow services that maintains a secure storage facility.

Why should I use National Software Escrow, Inc. as my Software Escrow Agent?

Our professionals have been servicing clients since 1986. With more than 35 years of experience, we are a trusted partner for software source code protection. Contact us today to learn more about the safeguards we have in place to protect your investment.

How Can I Get Additional Information and a Quote?

Call NSE toll free at (877) 628-7638 or email [email protected]