Maximising the Advantages of Escrow Services
Many companies are now taking advantage of the improved technology to maximize the use of various software solutions. This then means that companies have to license software from various developers. The software tends to be very expensive, and it is important for both the licensor and the licensee to protect their investments. For this reason, software vendors use escrow services to protect their interests as well as those of the licensee. Software escrow involves depositing the source code of the particular application with a third party. This third party is known as the escrow agent and should be independent of both the licensor and the licensee. Source code escrow is very important and can be initiated by either buyer or the seller of the software application.
When software is developed, it is available in either the object code format or the source code format. While the licensee gets the object code format, the escrow service providers remain with the source code format. The benefit of doing this is that the licensee is guaranteed the continuity of the software maintenance. Doing this also guarantees that any business using a particular software is cushioned against possible losses that arise from poor software maintenance. In the case of bankruptcy of the developer, the escrow agent makes sure that the software keeps running by providing the source code to the licensee. 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.
Besides protecting the rights of the licensee, the escrow agreement is key to protecting the intellectual property of the developer. 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. The software escrow agreement has various terms and conditions that bind both the developer and the licensee. Both the licensor and the licensee have various obligations which they are required to fulfill. Failure to fulfill these obligations there are serious consequences. These consequences relate to the possible use and transfer of the source code which promotes the rights of both parties.
Besides just storing the source code, escrow agent helps verify the availability of 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. Also, when the price of the software is very high, it is only best to protect the investment with the use of an escrow service.