How Does Software Escrow Work?

Written by Visual Thinker. Posted in Apps, Innovation, New Media, Ventures

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Published on December 08, 2014 with No Comments

How Does Software Escrow Work?

Atla EscrowThe concept of ‘escrow’ is more common in the USA than it is in the UK, but here many people will know it from trading on auction websites.

The basic idea centres around an independent third party acting as a kind of ‘honest broker’ between two other parties and entering the action only when certain conditions are met or circumstances arise.

When it comes to software escrow the approach is used to assure the long-term availability of source code, data and other materials whilst protecting all parties involved in the development, supply and use of critical software applications.

Crashes and failures

Thankfully modern software is designed to minimise crashes and failures, and if they do occur it often has fail safes in place to recover data. Even so, anything from a power grid outage through to disk or other hardware device failure can cause significant problems.

Although the ‘safe practice’ of regular backups, use of RAID setups and other procedures can limit the damage caused by software problems, in some cases there is a more substantial underlying situation that requires drastic action.

You can find out more about potential solutions that are available here.

Software escrow

In terms of software and business activities, escrow is used to make sure that organisations dependent on third party supplied software applications or processes can have a high degree of confidence that a problem need not escalate into a crisis.

Software developers or creators may not always be around themselves to support and maintain business critical software applications, as the reality is that many can, and do, go bust.

This is where a company such as NCC Group enters the picture. As the world’s largest software escrow provider it has strong relationships with over 5,000 software providers and therefore provides escrow and verification services which can assure the long-term availability of business critical software applications for end users.

At the same time, the process protects the intellectual property rights of the software suppliers. An escrow solution is a simple and effective arrangement that can come is several different variations, all of which are specifically designed to minimise risk and protect the interests of all parties involved.

Single and Multi Licensee Escrow Agreements can suit different scenarios to protect companies who may have spent thousands of pounds on purchasing and developing business critical software.

Whilst the source code for the software, the expertise to implement it and the rights to the software continue to belong to the software supplier or developer, having an escrow agreement in place means that mergers, acquisitions, legal disputes or insolvency need never endanger the continued smooth running of a company dependent on it.


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