Introduction to Software Escrow: What It Is and Why You Need It

Written by Jo Rust | Published on April 4, 2023


The protection of digital assets is more critical than ever, and one way to ensure the security of your source code is by using software escrow services. In this article, we will discuss what software escrow is, why you need it, and how it works.


What is Software Escrow?

Software escrow is a legal agreement between three parties: the software owner or licensor, the end-user or licensee, and a third-party escrow agent like Codekeeper. The agreement states that the software owner deposits the source code and other critical materials with us as a neutral third party. In the event that the software owner is unable to support the software due to circumstances ranging from bankruptcy, acquisition, natural disasters, etc., the end user/beneficiary can access the deposited materials.


Why Do You Need Software Escrow?

As a software owner or licensor, you invest significant time and resources in developing your software. It goes without saying that the protection of your intellectual property is critical to your success. There are several reasons why you may need software escrow:

  1. Protect Your Intellectual Property: When you deposit your source code with Codekeeper, you retain ownership of the intellectual property. This ensures that your source code remains secure and accessible in the event of unforeseen circumstances.
  2. Reduce Risk: By using software escrow services, you can reduce the risk of your end-users experiencing downtime or other issues due to your inability to support the software. This can help you maintain customer loyalty and avoid legal disputes.
  3. Increase Customer Confidence: Providing software escrow services to your end-users demonstrates your commitment to customer satisfaction and can help you win new business.
  4. Comply with Regulations: In some industries, such as healthcare and finance, regulations require the use of software escrow services to protect patient and customer data. We provide GDPR and HIPAA compliance solutions.

Codekeeper Software Escrow

How Does Software Escrow Work?

Software escrow works by establishing a legal agreement between the software owner or licensor, the end-user or licensee, and Codekeeper as the third-party escrow agent. The agreement specifies the deposited materials, the release conditions, and the responsibilities of all parties involved.


The Deposited Materials

The agreement stipulates what materials the software owner will deposit with Codekeeper. This typically includes the source code, documentation, and any other critical materials necessary to support the software. The deposited materials must be kept up to date and include all necessary updates and revisions.


The Release Conditions

The agreement also specifies the conditions under which the end-user can access the deposited materials. This typically includes circumstances where the software owner is unable to support the software due to bankruptcy, acquisition, or other unforeseen circumstances like a natural disaster.


The Responsibilities of the Escrow Agent

The escrow agent is responsible for holding the deposited materials in trust and ensuring their security. The escrow agent must have appropriate security measures in place to protect the deposited materials from unauthorized access, theft, or damage. The escrow agent must also maintain accurate records of the deposited materials and any changes or updates.


The Responsibilities of the Beneficiary

The beneficiary, or end-user, is responsible for maintaining their own copy of the software and all related materials. The beneficiary must also ensure that they meet all the requirements for accessing the deposited materials, as specified in the agreement.


Dispute Resolution

The agreement should also include a dispute resolution process. In the event of a dispute between the software owner and the end-user, the dispute resolution process outlines the steps to be taken to resolve the dispute. As the neutral third party, we help resolve any disputes that might arise.



Software escrow is an essential step in protecting your intellectual property and ensuring the security of your source code. By establishing a legal agreement between the software owner, the end-user, and a third-party escrow agent like Codekeeper, you can reduce the risk of downtime, legal disputes, and other issues that can arise from the use of proprietary software.


In this article, we have covered the basics of software escrow, including what it is, why it is important, and how to go about choosing a software escrow agent. It is important to remember that software escrow agreements are not a one-size-fits-all solution, and each agreement must be tailored to meet the specific needs of the parties involved. Our services include custom agreements and our experts are always ready to help curate a solution that fits your specific needs.


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