Software Escrow

Source Code Escrow is a three-party agreement between a software developer (the depositor or licensor), the end user (beneficiary or licensee) and the source code escrow company (the escrow agent). The objective of a source code escrow agreement is to provide comfort to the beneficiary that if the software developer is unable or unwilling to support the software, the source code and other critical components such as databases, deployment scripts, and documentation can be released to them.

The source code escrow agreement outlines the responsibilities of all the parties and includes the pre-defined release conditions.

The software companies generally request source codes for their protection of intellectual property. Source code contains the instructions that create the software program itself, which can be transformed into an executable program via the object code for the software to run as it should.

Under the software escrow agreement, the Licensor periodically deposits a copy of the software source code and associated materials for secure storage within the agent’s secure physical or virtual vaults, ensuring that the material can be accessed and released should the need arise.

Software Escrow also protects the licensee by giving access to the software vendor’s source code if an unanticipated or catastrophic occurrence happens. For example, suppose the software company or software provider ceases operations, becomes insolvent, or no longer supports the software, or holds to its maintenance obligations and updates. In that case, the licensee can be at significant risk. A simple software license agreement will not suffice in this situation. Providers of software as a service can also face similar business continuity risks and place the licensee in precarious situations.

Having access to software source code through the escrow agent allows the licensee peace of mind. The escrow agent will release the deposited material to the beneficiary if specific pre-defined requirements are satisfied. With the release of the source code, the licensee receives the protection it needs.

To request a copy of the devDept's Software Escrow service agreement, please Contact Us.