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Software escrow protects your business application.

November 30, 2011

If you are developing a business application then software escrow may protect your investment.

Many companies contract with software developers to design, build and install a wide range of applications or systems. These applications or systems are crucial to a businesses development and success. The average development cost for an application or system built for an SME organisation is £100,000 and represent a considerable investment in new technology. Through the use of a single user developer software escrow agreement you can protect your investment in new technology, this type of agreement works as follows;

  • Company contracts with developer
  • Escrow agreement is established between Company, Developer and Escrow Agent.
  • Developer deposits all developed code at pre-defined milestones with escrow agent.
  • If all goes smoothly agreement becomes single user upon completion.

If things do not go smoothly and;

  • Developer goes into administration; liquidation, receivership or development contract breaks down.
  • If developer looses key skill programmers and is unable to continue.
  • If the application or system development falls behind schedule

Because the developer has been depositing the source code at agreed intervals you have several options if any of the above events occur. You can take the part build code to another developer to continue the project, you can bring the code in house to complete the development project or you can partner with an organisation that will complete the project for you.

There are many examples of firms getting left with a part developed application and no access to the source code or the IP and having to scrap the project and re-think the companies strategy. This scenario can take its toll on companies and may even jeopardise the survival of an organisation.


written by Total Escrow Solutions

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