Source Code Escrow – It Happens All The Time!

With all of the new applications that are coming out every day now, there is an increasing demand for a balanced and fair way for developers to deal with the customers of the software market. Normally this calls for an agreement of some kind to be drawn up that ensures honesty on both sides of the transaction. Too often one person sees the other as ‘the big bad wolf’ at the end of the day when really there was just a simple misunderstanding that could have been avoided through a source code escrow clause.

Source Code Escrow is an excellent way to achieve this level of honesty and integrity between the developer and the customer. Just like an escrow agent in real estate is appointed to serve the best interests of the buyer and seller of a home, the source code escrow agent also has a very similar role.

Too often in the fast moving modern world of business folks tend to become a tad dishonest in their dealings and fall short of their promises. In this arrangement the chances for this type of scenario are greatly reduced seeing that a third party is in possession of the source code.
Source Code – Software Escrow Companies and Source Code Escrow Agreements

Iron Mountain source code escrow service is well known and okay to use although there are many. You should be sure to look at and check out as many options as you can, but some of the main points you want to explore are the following:

* Does the software source code escrow agreement have a source code escrow audit procedure? This is a procedure that is used to determine whether or not the source code that is in escrow is a valid copy of the original code that is being used by the customer. This is important should the source code escrow be released to the customer in the event the developer could no longer keep on updating the software because of business issues, sickness, or any other trigger that could put the customers use of the software in jeopardy.
* Does the source code escrow agreement contain a clause that deals with possible bankruptcy on the part of the developer? If it doesn’t it should. The reason why is because if for some reason the customers legal representative finds that he/she (the developer) has rights to the code even after they declare bankruptcy, this could leave the customer ‘high and dry’ with no recourse. Not good.
* Does the source code escrow agreement have a clause that allows for third party developers to work on it and update it? Just in case the developer gets lazy and does not provide the needed updates to the application during its use by the customer, this clause will serve as a list of things the customer can do to recover. If this states ‘non-compete’ then the source code would have to be released to the customer in order for them to be able to hire an outside hand to help with its development and needed maintenance and updates.
* Does the agreement allow for the customer to continue the software’s development in the event that the developer loses his shirt and goes out of business? If it doesn’t the customer runs the risk of not being able to carry on using the software and will most likely have to go with someone else. This could mean losing a bunch of money and time (ouch and…ouch).
* What are the fees for the source code escrow agreement? You really want to shop around to get the best price and not necessarily go with the first deal you come across. A good number is 3. Get 3 estimates and contracts/agreements and have your attorney look them over for accuracy. When everything shakes out if there should be a problem, you do not want to be on the receiving end in this case for sure!

Source Code Escrow and Conclusion

Source code escrow is becoming more and more a staple in the online development community and is a necessary regulatory tool for the future. It properly outlines the relationship between the customer and the developer and provides for a stable and honest way to do business online.

It is also important to remember that the risk isn’t just on the side of the customer. If for instance you were a developer and put thousands of man hours into developing an application to serve the best interests of say physicians, you would want every last thing outlined in the agreement and nothing to be left unclear or ambiguous. Absolutely everything is contained in one of these agreements as to prevent an all too common misunderstanding and a possible subsequent lawsuit.

This way, everyone who is a party to the software or source code transaction understands their duties and and is overseen and monitored for compliance. These agreements are becoming more and more standardized as the software market evolves but it is all in the service of keeping everyone on the path to a smooth and satisfying transaction that is good for the customer and the developer.

Software Escrow – The Main Idea

Software Escrow is essentially a process of securing what is commonly referred to as source code. This ‘source code’ is normally the code to an application. The code is what the computers operating system interprets and puts up on your computer screen when you launch an application from your desktop.

Software escrow is usually employed to protect one party in case a developer (the source code creator) should go out of business, declare bankruptcy or some other type of problem that would prevent the applications user from getting proper updates and so on.  There are necessarily 5 things you should know about software escrow and how it works.

Escrow is or means ‘third party’ or someone not parcel to the transaction. That way a conflict of interest can be avoided and a smooth transaction or relationship can be anticipated between the developer and the customer. The software escrow agent or service holds onto the source code to make sure that the developer fulfills his/her end of the agreement and provides the customer with all the necessary updates/patches/bug fixes etc.

The escrow agent also ensures that the customer carries out the terms of the agreement as it applies to them as well. It’s kind of like getting Mom to hold the cookie jar to make sure they are evenly dispersed to your brothers and sisters!
Software Escrow and the 5 Important Things I Promised You.

*  A software escrow agreement is normally between a developer and a customer (ie. A medical practice – medical software). The developer agrees to  provide the customer with all needed updates for the app and patches etc.
* The agreement should indicate EXACTLY what should happen in the even the developer is unable to continue development of the application and whether or not the customer is allowed to hire a third party to continue development.
* The software escrow must (in 99% 0f all cases) also include a non-competition clause that indicates that the customer is not permitted to hire outside developers to come in and service the application. The application is to only be serviced by the company offering the software to the customer only.  In a case where the code is released to the customer, this rule will become void.
* Watch out for bankruptcy laws.  Should the developer declare bankruptcy and the source code released and the developers legal representation find that the developer is still entitled to the source code, this could be the recipe for a VERY unhappy customer so be careful!
* You want to secure the source code with a well know and reputable escrow service. Or you can use an application to do the work for you. Looking to purchase escrow software programs or California escrow software? Be sure to check out RBJ Escrow Software.Software Escrow

Software Escrow and Some Other Areas for Investigation

You may also want to explore and compare software escrow fees, software escrow costs (as applications), the software escrow process, and be sure to pay special attention to the software escrow language contained in the agreement. You can normally find some type of software escrow agreement sample online if you google it.

Secure Software Escrow

Secure Software escrow is a leading website in the arena of source code escrow and software escrow services.

Software creators NEED to be protected.  Don’t trust your code to just anyone.  Read our site to protect yourself and your source code.