Some believe they are saving money by not taking on a software escrow. But the reasons why many financial partners give for not taking on a software escrow agreement are actually myths that have long needed busting. So here are a few of the most popular reasons people claim to not need a software escrow agreement – and the realities of the situation.
You can’t be expected to trust an escrow agreement company. The truth is, a reputable escrow agreement is a third party, neutral vendor who has no bias toward either the licensee or the vendor. The goal of a professional escrow firm is an agreement that protects and clearly defines the issues for both parties.
My source code is in jeopardy! Nothing could be further from the truth. In fact, an escrow agreement protects your interest in the source code because it specifies when and how source code can be released. Just because the customer is “entitled to” the source code in some way doesn’t mean that the customer gets the source code whenever and however they want it. There are rules governing intellectual property, and they protect the creator just as much as they protect your customers.
An escrow agreement will prevent your sale of the company. On the contrary, any good investor who has any real knowledge of the volatility of software firms will insist on an escrow agreement before purchase or investment in a Software as a Service company or software firm. An escrow agreement is protection for everyone. It ensures a customer or investor that the maintenance is going to be in place and technical support is always available.
Knowing the whys and hows of your technology and how it works isn’t enough. You need more communication about how escrow agreements really work. Instead of relying on myths or rumors, why not find out yourself just how a software agreement can benefit your company?