Why Software Developers Should Provide Licensees With Software Escrow Services

NCC Group
Contact

This is a special guest post from Michael Davis, Escrow Advisor at Iron Mountain

If you are a software developer, then you know exactly how important it is for your prospects, clients, and business partners to have complete and utter confidence in your organization. That is exactly why so many software developers count on software escrow. Software escrow can be integrated into the buying process for both on-premises software installations and Software as a Service (SaaS) applications. Historically speaking, the software escrow process has been initiated by the licensee or end-user.

However, we are now living through unprecedented times, and many software developers are being squeezed due to economic pressures. In the current business environment, you need to stand out from your competitors in order to survive, let alone thrive. That means you should consider offering software escrow to your customers as a proactive measure. It will not only differentiate your organization from everyone else, but it will also ensure the customer base that you will deliver as promised. So, what exactly is software escrow, why is it important, and how can you truly benefit from it?

In essence, software escrow means that a trusted third party, such as Iron Mountain, will securely store a copy of your software source code in a restricted location for the purpose of recreating the software at some point in the future if needed. The bottom line is that software escrow services mitigate the risk for both you and the software licensee if you are unable to support the product at some point in the future. For example, the software can be released from escrow if there is a bankruptcy, merger or acquisition, or even if you no longer support the product.

Of course, these situations and any other particular circumstances or conditions must be specified in the software escrow agreement. Some of your customers may even require a software escrow due to the fact that they are concerned about such matters. When you go on the offensive and offer the software escrow upfront to your customers, it will not only go a long way in helping your customers calm their fears but will also be greatly appreciated since it is one less thing that they will require from you. If a release condition does occur, the software escrow agreement provides your customer with the ability to access the source code in order to help keep their business operating – either on their own or by hiring another vendor to support the application.

When you offer a software escrow contingency plan upfront, it is certainly an added incentive to work with you instead of your competition. With a streamlined software escrow system, doing business is a whole lot easier for all parties involved in the process. This will help you close deals faster because you will be able to provide the protection that your customers need to make them feel more comfortable at the closing table.

Because specific "use rights" are written into the escrow agreement, the licensee only has the right to use the software for the sole purpose of continuing the benefits afforded to them via the license agreement. This also means the licensee is obligated to maintain the confidentiality of the released software. This is how a properly executed escrow agreement will protect your intellectual property, which is incredibly important from your standpoint. Simply turning your custom code work over to your customers is never smart business.

If you're a software developer looking to gain a competitive edge, think about proactively offering software escrow as the assurance your customer needs to feel comfortable to close the deal and recognize your business as a safe choice. At the same time, you'll be protecting your intellectual property.

Written by:

NCC Group
Contact
more
less

NCC Group on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide