Maximising the Advantages of Escrow Services
Advancement in technology has made it very important for companies to take advantage of information technology solutions to improve business processes. This has necessitated companies to license different software to meet their technological needs. Most application software are very expensive, and both the licensor and the licensee want to protect their technology. For this reason, software vendors use escrow services to protect their interests as well as those of the licensee. Software escrow involves depositing the source code of the particular application with a third party. This third party is known as the escrow agent and should be independent of both the licensor and the licensee. Either the buyer or software vendor can introduce the escrow agreement to protect their interests.
Software exists in two formats namely the object code format and the source code format. As a licensee, you only get the object code format while the escrow gets the source code for safe keeping. The benefit of doing this is that the licensee is guaranteed the continuity of the software maintenance. This is very important for the licensee since the software may be a key part of their business and this cushions then from possible losses. Source code escrow services protect the business using the application for any event including the bankruptcy of the developer which may terminate some services. The escrow agreement ensure that the licensee has the right to the source code in case the developer fails to fulfill his obligations as per the escrow agreement.
On the other hand, source code escrow is also beneficial to the software developer since it protects their intellectual property rights. The software industry has so many people who lack the creativity to create something new which discourages the developers from sharing their source code with the licensee. The software escrow agreement has various terms and conditions that bind both the developer and the licensee. There are also numerous obligations for both parties. Failure to fulfill these obligations there are serious consequences. The use and transfer of the source code is clearly discussed under the escrow agreement.
Besides just storing the source code, escrow agent helps verify the availability of the source code. It is also the role of the escrow service to ensure that the software is in good shape and that it offers optimal performance to the licensee. While it is advisable to always use escrow services, those licensees who use the software to support a vital function of the company have more to lose and they should make sure they protect their investments. Some software is also very expensive which makes it prudent for the licensee to use an escrow service to protect their interests.
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