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Tips & tricks for happy software development, deployment and licensing.

    Source Code Escrow, saas escrow, data escrow

    The Ultimate Guide to Software and Source Code Escrow - Chapter 7

    Who pays for software escrow services?

    The question of who should pay the escrow fees—the licensor or the licensee—has no right or wrong answer, and there is no established standard practice.

    On the one hand, there are certainly instances when the beneficiary pays the escrow agent directly. For the most part, however, it’s actually the licensor who is responsible for payment of escrow fees. This is something that is often considered an expected cost of running a licensing business.

    But even though the licensor may pay the fees, the licensee ultimately reimburses the licensor, more often than not. In fact, they may even pay a greater fee to the licensor at the outset to cover both escrow fees and the licensor's administrative expenses.

    The main reason that we see the beneficiary covering the cost of the escrow in some way, shape, or form is that the escrow is set up in their best interest. If a licensor were to go out of business for any reason, they wouldn’t be as concerned over what happens to the system that they’ve licensed out to clients. 

    So even if the beneficiary doesn’t directly cover the cost of the escrow by paying the escrow agent, they will still be paying that fee through their licensor’s service charge.

    Tip: To read more about who should pay for source code escrow (and how much), check out this article.

    Source Code Escrow, saas escrow, data escrow

    The Ultimate Guide to Software and Source Code Escrow - Chapter 6

    What are some examples of release conditions?

    So we’ve caught up on Software Escrow and all the ins and outs. But what are some release conditions that can be incorporated in a Software Escrow agreement?

    Parties to the agreement are free to negotiate any release terms that can be validated independently by the escrow agent. Most commonly, however, these terms revolve around the licensor's financial or operational standing. A release may be triggered if, for example, the licensor enters voluntary or involuntary bankruptcy, or if the licensor fails to operate in the ordinary course of business (OCB). 

    Two other very common “custom” release terms that are requested by beneficiaries are that the material in escrow be released in case the vendor is acquired by another company, or if the provider fails to fix an error in the system within a given time frame.

    Source Code Escrow, saas escrow, data escrow

    The Ultimate Guide to Software and Source Code Escrow - Chapter 5

    Why is having access to source code so important?

    In the case of typical, off-the-shelf software, only object code (i.e., executable code) is licensed out to the end-user. In commercial licensing deals, however, the licensee may have a legitimate interest in object code, as well as source code as an assurance that their mission-critical systems will remain functional. Accessing source code allows the licensee to see how the software is processing data or performing functions, and can even allow the licensee to change the operation of the software if necessary.

    In that sense, source code is the DNA of a software application. It is code that is written in a programming language that is readable (and modifiable) by humans, and without it, developers can’t debug or upgrade software applications. In other words, they can’t ensure that the system will continue working as intended.

    So if, for instance, a software vendor goes out of business, without modifiable source code, the software is as good as dead. Depending on how critical the software is to your business, the effects of losing access to the source code could be nothing short of devastating. Later in the ebook, we will examine some of the risks that software escrow helps mitigate, as well as the benefits that it offers to both licensors and licensees.

     

    Source Code Escrow, saas escrow, data escrow

    The Ultimate Guide to Software and Source Code Escrow - Chapter 4

     

    How does software escrow work? 

    Software escrow agreements vary depending on the agent’s scope of services, including verification services & SaaS escrow, but the core responsibilities of the parties are more or less consistent across the board.

    We will tell you about the journeys each party goes through when onboarding software escrow.

     






     
     
    Escrow Process For Beneficiary 

     

     

    For the beneficiary to initiate an escrow on the Codekeeper platform, the first step would be to register their account on our pricing page under the software escrow package which appropriately suits their needs. Once the account is set up, they can move towards initiating the escrow by entering all of the contact information of the relevant parties, inviting their depositor to sync up their source code repositories with our platform, and request custom terms for the escrow contract. Once the beneficiary and depositor have signed on to the agreement, the escrow is active! 

     

    Source Code Escrow, saas escrow, data escrow

    The Ultimate Guide to Software and Source Code Escrow - Chapter 3

     

    What’s the difference between software vs. source code vs. SaaS escrow? 

    Software escrow. Source code escrow. Saas escrow. Technology escrow. Data escrow. Information escrow. Domain escrow. So many escrows!

    If you’ve been researching what a software escrow agreement is—and since you’re reading this article, a wild guess would be that you have. You have  probably come across these and other terms. But what do all of them mean?

     






     
     

    Software Escrow and Source Code Escrow

    “Software escrow” and “source code escrow” are terms that are used interchangeably, and they essentially mean the same thing. 

     

    As described throughout this article, this is the most common type of escrow, designed to store not only source code, but also build instructions and any other important documentation that would allow a licensee to update and maintain a mission-critical software application. Though they are most commonly used for traditional on-site software licenses, software escrow can also be used for development agreements, software acquisition agreements, and any other transactions involving software.

    Source Code Escrow, saas escrow, data escrow

    Your FAQ’s on Data Escrow, SaaS Escrow and Source Code Escrow answered by Codekeeper

    Table of contents:

     

    Data Escrow, Saas Escrow, Source Code Escrow, it can all get a little confusing, this is why we accumulated all the frequently asked questions straight.

     


     
     

    Data Escrow

    What is Data Escrow?

    Without the necessary data, it is immensely hard to bring and keep a software application in a usable and useful state. Data escrow is an effective way of ensuring that any data created and managed by a business-critical software application is never at risk of being lost or inaccessible.

     

    Specifically, by deploying data escrow, the application's end-user (licensee) ensures they are always able to access the most up-to-date copy of the data they need to operate critical functions and ensure business continuity. The data in escrow can only be released to the licensee under predefined (and verified) conditions, such as in the event of a natural disaster or their licensor running out of business.

     

    What does Data Escrow mean?

    Data escrow is a specialized data protection solution designed to maintain the safety and integrity of data essential to the proper functioning of a mission-critical software application.

     

    Who is data escrow for?

    Any company that builds software applications and their clients. While data escrow is not intended to replace operational backups, security-minded companies that commission software use data escrow to bolster their risk mitigation. Software developers, on the other hand, use it to boost sales by strengthening their business case and providing more value to their clients.

     

    Why do people use data escrow?

    When you build and use a software application, you create data. There is no way around it. And this data can be stored in environments where software is deployed and executed, including databases in different physical locations, asset stores like AWS S3 and Microsoft Azure, in-memory databases, and many others. In case critical data suddenly becomes inaccessible for any reason, your software application would lose its normal functionality.

     

    What can cause data loss?

    Data loss occurs when data is accidentally deleted or something causes it to become corrupted. Viruses, physical damage, formatting errors, or a combination of these can render data unreadable by both humans and software, posing a risk to the financial health of businesses of all sizes.

     

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