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The Importance of Software Escrow to Business Companies

One of the most popular and the most useful technologies of all time, is the computer, which is a device that can be instructed by the user to carry out set of logical and arithmetic operations in an automatic manner. The two primary parts of a computer are the hardware which cover all of the parts of the computer that are physical objects such as computer chips, graphic cards, sound cards, memory or RAM, motherboard, displays, cables, keyboards, printers, mouse, power supplies and circuits; and the software which are the parts of the computer that do not have a material form, such as protocols, data, programs, encoded information or computer instructions, and libraries. A source code is basically, an example of a software, and it is defined as any collection of computer instruction written with the use of a human-readable language of programming or ordinary text which can be interpreted only by the people who have the knowledge in programming and software development.

Running a company that produces software can be very demanding and critical to these business owners, especially in times when the licensor or their business partners were unable to do their responsibilities and some of the most common reasons includes merger, obsolescence, acquisition and bankruptcy, and these business companies are using the source code in order to maintain, fix and operate their products to their clients. The desires of these companies to make sure that it continues to operate can be easily achieved by gaining the copy of the updated and recent source code of the software, and one of the solutions for that most of these companies are using the source code escrow, which can help them ensure that they can have access to the source code. Source code escrow is also called as software escrow, and it is a way of lightening or mitigating any risk to happen when two or more parties negotiate for the license of the software application, and once these developer companies will create their contract of software escrow, the source code will be placed in a secured account handled by a trusted escrow agent, who acts as the third party. The various agreements involved during the process of achieving a source code escrow includes specifying the scope and the subject of escrow; circumscribing the rights obtained by the licensee with respect to the source code after the software is released; providing the fees of the escrow agent for his efficient services; providing non-compete clauses in the agreement of license; specifying the services provided by the escrow agent; specifying the conditions that must be met by the agent to release and give the source code to the licensee; and obliging the licensor to place or put updated or the recent versions of the software in escrow in specific period of time. The software developer companies who wants to obtain more accurate information about software escrow and wants to hire the services of the best escrow agent in their local area can look for them through the recommendations and word of mouth of families, colleagues and lawyers, or through the use of the internet.

Source: https://www.businessblogshub.com/2016/12/what-on-earth-is-an-escrow/