Why Companies Aren’t As Bad As You Think
Maximising the Advantages of Escrow Services
Many companies are now taking advantage of the improved technology to maximize the use of various software solutions. As a result, companies have been licensing software from different developers. The software tends to be very expensive, and it is important for both the licensor and the licensee to protect their investments. Software vendors use escrow agreements to protect both their interests and those of the licensee. With source code escrow, the developer is able to store the source code with a third party. The third party is identified as the escrow agent and should have no ties to either the licensor or the licensee. Indeed, the source code escrow is a very important part of vendor agreement, and both the licensor and licensee have the right to initiate it.
Software is available in two formats, that is, the object code format and source code format. While the licensee gets the object code format, the escrow service providers remain with the source code format. Deposing the source code with the escrow agent ensure that the software is updated and maintained on a regular basis. This allows the business to cushion itself against losses that may arise from poorly maintained software. 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.
Besides protecting the rights of the licensee, the escrow agreement is key to protecting the intellectual property of the developer. 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. Source code escrow is anchored on various terms and condition which bind both parties. Both the licensor and the licensee have various obligations which they are required to fulfill. If any of the parties fails to observe these agreements, there are certain consequences. These consequences relate to the possible use and transfer of the source code which promotes the rights of both parties.
The other function of the escrow agent is to verify the availability of the source code. The escrow services also verify that the software is working as it should which is also very important. 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. If the cost of acquiring the software is very high, the licensee is also advised to make sure that they use an escrow agent.