Escrow agreements are designed to meet a variety of stakeholders’ needs. Everyone from the creative mind designing the software to the person who invests in a software company has good need for an escrow agreement. Here are some considerations for the end users of licensed technology when deciding on an escrow agreement.
First, end users should realize that it is definitely in their best interests to get a software escrow agreement. There are inherent risks associated with depending on software that is basically “mission critical” and not supplied in-house, but rather by an outside, third party. Could you survive a service interruption due to a vendor bankruptcy or acquisition? If not, you need to start your search for the right escrow agreement by considering the kinds of services you actually require.
Is your license locally installed, enterprise software? If so, then a standard software escrow agreement should suit your needs just fine. An escrow agreement will verify the source code, procure an important copy of the code and put a plan in place to monitor regular maintenance and other agreements.
What about cloud –based applications? That should be handled more appropriately with a Software as a Service agreement, which creates a different level of continuation procedures, should the worst happen. People who use cloud-based apps are particularly vulnerable to a shift in operating procedures should a vendor go bankrupt or quit for another, better opportunity.
Do you have a critical application? You should consider having a technical inspection and possible penetration test to determine where the weaknesses of this critical program might be (particularly now as it relates to Big Data capabilities).
Have an expert walk you through the details of what escrow plan is right for the needs of your business.