Benefits of Using Software Escrow Services
Advancement in technology has made it very important for companies to take advantage of information technology solutions to improve business processes. As a result, companies have been licensing software from different developers. Most application software are very expensive, and both the licensor and the licensee want to protect their technology. As such, escrow services have been very critical for software developers because the help protect the interests of both parties. 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. 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. While the licensee gets the object code format, the escrow service providers remain with the source code format. Deposing the source code with the escrow agent ensure that the software is updated and maintained on a regular basis. 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. The escrow agreement ensure that the licensee has the right to the source code in case the developer fails to fulfill his obligations as per the escrow agreement.
Besides protecting the rights of the licensee, the escrow agreement is key to protecting the intellectual property of the developer. The software industry has so many people who lack the creativity to create something new which discourages the developers from sharing their source code with 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. 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. When the licensee will be using the software for an activity that is vital to the company or has a direct impact on the revenue, it is important to use source code escrow services. Some software is also very expensive which makes it prudent for the licensee to use an escrow service to protect their interests.