Technology has become an essential part of our day to day life. This dependence on technology and software has been one of the driving forces when you are into a business. The software simplifies the day to day operations in any business. However, when the software is quite critical to the functioning of your organization, you would want to ensure that it will be available for a foreseeable future. Software Escrow is exactly what would aid you in that aspect.
What is Software Escrow?
Well, put in simple words, Software Escrow is a service wherein the software source code and the related data are deposited with a software escrow agent. This will help protect the interests of all the parties involved in a software deal.
A business house looking to license a software product will want the assurance that the product will be available for use for a continued period of time. That would be more of a necessity when the software product is more critical to your operations. However, the software vendor will not be ready to part with the source code and the documents associated with it. It forms part of their intellectual property.
This is where a software escrow agreement will be helpful in ensuring that both the parties will be able to satisfy their requirements.
When is it really needed?
That is indeed a good query. Do all software deals need you to have a software escrow agreement? That would be something that we would be able to answer on the basis of individual cases. However, in a broader sense of the topic, it may be safely concluded that it is not necessary for each of your software deals.
If you think it is not needed, then it can be avoided. Some of the circumstances that would warrant the need for a Software Escrow agreement can be summed up as here below –
- If the software licensee considers the software vendor to be financially not stable. The licensee would want the use of software a for a prolonged period of time and would not want to face repercussions of the vendor going out of business.
- There are cases wherein a software vendor may not continue to provide the services as envisaged in the license deal. If licensee has any doubts about such happening s affecting his business, he may press for a software escrow arrangement.
- The software vendor may be having a previous history of not obeying the agreement of license or violating it. This can make software escrow agreement essential.
- The software under question is crucial to the licensee and his business.
Some of the cases that may affect the use of software can be
- The software may crash, or may be incompatible with the other software tools in use.
- The software is outdated and needs updating. Outdated software may not work with new business practices or improved equipment’s or product line up.
It may be beneficial in such cases to have access to the source code and the related documentation so that the tool can be maintained with ease. If this works true for organization, you may have to consider opting for a software escrow agreement.
The Final Thoughts
Software escrow services can lend you a great deal of support in your software license deals. Designed to be helpful for both the vendor and the licensee, a software escrow agreement would let you access the software and put it to an effective use. However, do exercise caution in choosing a software escrow agent for your needs. Conducting an in house research on the possible candidates can be a good idea.
If you can handle it well enough, a software escrow service will always be a helpful proposition for an effective functioning of your business.