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What is Source Code Escrow? Explained

January 9, 2012

What is Source Code Escrow?

Source code escrow (also referred to as software escrow) is the deposit of software source code with a neutral 3rd party software escrow agent.

 

How does Source Code Escrow work?

The software licensor securely deposits the application source code with the escrow agent. In the event that a vendor fails to meet the software license agreement or files for bankruptcy the source code can be released by the escrow agent to the licensee.

A source code escrow agreement is a contractual agreement that is drawn up between; the licensor/s, the licensee/s and the escrow agent. The agreement defines the boundaries of the source code escrow. If the terms of the escrow agreement are upheld then the deposited source code will remain safe and secure with the software escrow agent.

 

Why would I need a Source Code Escrow Agreement?

The advantages of a source code escrow can be viewed from two perspectives; the licensee and the licensor.

Licensee (End-User):

  • The source code escrow protects your vital business applications and software.
  • It lowers the risk of investing in software that you do not own.
  • It is considered an imperative part of your business risk management and business continuity plans.

 

Licensor (Vendor):

  • It adds value to your product and service.
  • It reassures your potential customers that mechanisms are in place in the event that something happens.
  • The source code is kept securely with a 3rd party escrow vendor so it prevents the need of handing over your source code to the licensee.

 

Why use a Source Code Escrow Agent?

The source code escrow agent acts independently from the software licensor and the licensee. The agent will safe-guard the software/source code and will only release it in accordance to the source escrow agreement.

 

What type of industries use Source Code Escrow Agreements?

A full range of industries can benefit from source code escrow agreements. Quite simply it is any industry that makes use of software either directly or indirectly with their daily operations. Total Escrow Solutions has an extensive history of producing source code escrow agreements for:

 

What types of Source Code Escrow Agreement exist?

Total Escrow Solutions can produce bespoke source code escrow agreements to suit the needs of the licensee and licensor. However, we are the source code escrow specialists in:

 

What is the cost of a Source Code Escrow agreement?

Total Escrow Solution fee’s table highlights the low cost of a source code agreement.

 

Contact Total Escrow Solutions to find out more about source code escrow by calling 0845 017 6737 or making an enquiry online by clicking here.



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