Maximising the Advantages of Escrow Services
With the growth of technology, it has become extremely important for companies to take advantage of various software to improve business processes. As a result, companies have been licensing software from different developers. Because of the prohibitive cost of developing application software, licensors and licensees want to ensure that they protect their investments. As such, escrow services have been very critical for software developers because the help protect the interests of both parties. With source code escrow, the developer is able to store the source code with a third party. The third party is identified as the escrow agent and should have no ties to either the licensor or the licensee. Indeed, the source code escrow is a very important part of vendor agreement, and both the licensor and licensee have the right to initiate it.
Software exists in two formats namely the object code format and the source code format. As a licensee, you only get the object code format while the escrow gets the source code for safe keeping. This ensures the continuity of the software maintenance over time. Doing this also guarantees that any business using a particular software is cushioned against possible losses that arise from poor software maintenance. Escrow services are very important because they protect the businesses from the bankruptcy of the developer by ensuring that the source code is available for updates and routine maintenance. With escrow services failure to provide maintenance or support as per the agreement gives the escrow service the right to surrender the source code to the licensee.
Source code escrow also benefits the software developer by protecting their intellectual property rights. There are so many people out there who are out to copy the ideas of different developers, and this makes it hard for the developer to surrender the source code to the licensee. Both the developer and the licensee are bound by various terms and conditions clearly outlined in the escrow agreement. There are also numerous obligations for both parties. When one of the parties fails to meet their obligations as stated in the agreement, various penalties apply. The use and transfer of the source code is clearly discussed under the escrow agreement.
Apart from storing the source code, the escrow agent has to authenticate the source code. The escrow services also verify that the software is working as it should which is also very important. It is always advisable for a licensee to use escrow services if the software supports a vital function of the organization or has a direct impact on the revenue. If the cost of acquiring the software is very high, the licensee is also advised to make sure that they use an escrow agent.