The basics of software license agreements and source code escrow agreements.
The aftermath of COVID-19 saw many employees forced into remote working conditions. With many workers around the globe either working from home or in hybrid environments, a rise in demand for technology and SaaS applications has increased.
Any time a company relies upon proprietary technology for business-critical functions, an escrow agreement should be considered to maintain business continuity and protect critical applications. For example, regarding your data center, it’s vital to ensure your intellectual property is protected through a third-party escrow company.
What is Source Code, and What is a Source Code Escrow agreement?
In computing, “source code” refers to any set of code that was produced using a programming language that is readable by humans. Writing source code is the primary method by which computer programmers identify tasks for a computer to carry out. Because of this, the software’s source code is specifically crafted to make the work of software engineers easier.
A software source code or code escrow agreement is an arrangement between a technology vendor and licensee. Its purpose is to provide a licensee with access to a technology vendor’s executable source code if release conditions are met, and escrow materials need to be released. Utilizing a code escrow service ensures your company’s investment in a software vendor’s solution isn’t impaired. Another reason for the need for source code escrow services might be that the software product or software application is no longer being updated or managed by the vendor or service provider due to insolvency or other unmitigated issues.
This solution works by having a software developer or technology vendor, here known as the licensor, deposit their source code with an agent of an escrow account, who will then store it in a secure location either offline or in-house in a secured cloud environment. In the event of a release, the agent will then release the source code to the licensee based on the previously agreed upon release conditions.
Entering into an agreement with an escrow agent is an excellent way to ensure your deposit materials always remain safe and secure.
What types of Software Escrow Agreements are there?
There are three escrow deposit agreements National Software Escrow offers our clients. Click any of the bolded lines below for more information regarding each type of arrangement from our software escrow services:
- Single Beneficiary Escrow Arrangement – Designed for (1) Software Provider and (1) Licensee
- Multi-Beneficiary Escrow Arrangement – Designed for (1) Software Provider and multiple Licensees
- Multi-Vendor Escrow Arrangement – Designed for (1) Licensee and multiple Software Providers or Software Companies
How do I get started with a Software Escrow Service?
Once you’ve spoken with a software escrow agent and established a software escrow agreement, the next step is deciding which Escrow Storage Option works best for you. Through National Software Escrow, escrow materials can be stored, maintained, secured, and preserved in either physical or electronic format.
If you are not quite ready, we offer a short survey to help determine your need for these services. Check out this short survey to determine if Software Escrow is right for you.
Finally, after all the decisions have been made, you can fill out our Escrow Deposit Upload Form (if planning on depositing via electronic format) and rest easy knowing your technology escrow is in capable hands. For more information, Contact Us through our website, by telephone at 877-628-7638 or [email protected].