The economy has been witnessing a huge growth and most of this development has been taking place in the software industry. Safeguarding your business interests is of utmost importance for the long-term stability of your startup. The major task in that direction can be to protect and safeguard the business and its assets. One of the popular ways of doing this is to get the services of a Software Escrow Agent. We will check out what it is and how it works.
What is a Software Escrow?
Software Escrow is the term used to explain the act of depositing the software source code of an application developed with a third party agent, referred to as Escrow Agent. This is done to ensure that the software is available for a continued use.
The concept is useful for the businesses so that the continuity of software maintenance is ensured over time. It takes care of situations like the software developer going out of business, or it fails to maintain the software for any other inherent reason.
How does Software Escrow Work?
Though this cannot be a perfect platform for discussing the intricacies involved in Software Escrow, we will make an attempt at understanding the basics.
A business always needs software for its operations. During the last stages of the software licensing, a Software Escrow Agent is included in the plan. The agent will store and take care of the source code, associated documentation, and other data. The agent will hold this data until the situation stipulated in the Escrow agreement is reached.
The Software Escrow services ensure that the business continues to be supported by the software even the developer goes out of business.
When should you opt for Software Escrow?
There are several conditions that would make it necessary to have a Software Escrow plan. Some of them can be
- The software in question is quite vital for your business. Such critical software needs software escrow services.
- If you suspect the software developer is likely to go out of business. Bankruptcy can result in a huge loss to your business. These circumstances warrant software escrow.
- Cost of the software also plays a role in deciding for Software escrow. If it too high, it would be advisable to opt for Software escrow.
- If the software has a direct relation to your business revenues, a software escrow is essential.
- If the concerned software is custom made for your business, replacing it may be difficult, time-consuming and expensive. A software Escrow service lets you stay safe from such events.
- If the software vendor violates the licensing agreement, a proper software Escrow agreement helps you safeguard your interests.
You can opt for multiple types of software escrow agreements depending upon the genre and the requirements that you may have. There are several options like Single user agreement, multi-user agreement or a custom made an agreement. You can consult a reputed Software Escrow firm for a better understanding of the concept.
The Concluding Thoughts:
If you are a startup, it would be quite essential to safeguard all the aspects of your business. Software Escrow is a great step in that direction. Always opt for a reputed Software Escrow agent. This will ensure that your startup is safe from the possible vulnerability in the software licensing agreement. A good software escrow agent should help you stay in the business and evolve over a longer period of time.