
Include a source code scan to your escrow for more Security
Let’s start by considering the following scenario: you're a software company that's been in business for a while now. You've been working on a deal for quite some time and are about to close it. But suddenly, your prospective partner wants you to use a source code escrow service as a part of the deal. You don't want to lose out on closing the deal, so now you need to find a way to keep the contract while also protecting your valuable resources- but you’re not all that familiar with source code escrows.
For any business in the 21st century, understanding source code escrow services is essential. In fact, a recent study by Gartner claims that software spending is expected to grow by more than 11% to almost 755 billion in 2023, - this is from an estimated $675 billion in 2022. But as customer software spending increases, so does their need for reassurance and protection in case of software failure. That's exactly where a source code escrow (also called software escrow) comes in.
Every day, companies around the world license custom software applications that are critical to the operation of their business- the development of which can cost in the millions. Due to the critical nature of these applications, more and more companies are requiring software developers to store their software source code and documentation around its use, in a source code escrow.
The software source code has strategic value to a company and, like anything of value, it’s natural to want to protect it. In this scenario, putting in place a source code escrow agreement is exactly the insurance that companies need.
A source code escrow (or software escrow) works by the supplier (the software developer) depositing the source code (and documentation on how to use it) with a trusted third party (the source code escrow agent). This is then agreed to be released to the beneficiary (the client) upon the occurrence of a “release event” such as the software developer filing bankruptcy, closing up shop or failing certain obligations under the license. Following any of these release events, the insurance premise of a source code escrow is revealed.
In essence, the client can then obtain the software source code to continue to use it, and if agreed in the license, maintain the software without the supplier’s involvement. This enables the business to continue to operate without interruption or impact; whether this means being able to maintain the software by fixing bugs or ensuring compatibility with system upgrades or even just giving the client some breathing room until they can find a new supplier.
While the most commonly talked-about benefits of a source code escrow (or software escrow) are those for the client, it also brings a multitude of advantages for the supplier (software developer, vendor or distributor).
It allows suppliers to stand out from the crowded field of competition and offer more value by:
It is also is a way to frame the access conditions for the source code:
Another key benefit that developers should consider is that depositing your software source code is like taking out an extra security policy , as a backup is always in place. In parallel, they are also securing the copyright in their source code if ever an issue of authorship or unfair competition comes into play, as the deposit serves as legal proof in court that the source code was owned at a specific date and time.
There are three types of classic source code escrow contracts – An access clause, bipartite and tripartite.
This is a valid point that many businesses want to know. How can they be sure that what is being escrowed is indeed what they will need to avoid an interruption to their business? Due to this, it's recommended to check what has been place in the source code escrow by choosing a source code escrow agent that offers a verification check.
At Vaultinum we offer three types of deposit verification levels with our source code escrow service.
However, for each of the software source code options explained above , it involves a Vaultinum agent going on site to perform a functionality test to verify that the source code is operational and to guarantee that it corresponds to that used by the beneficiary.
When entering a source code escrow agreement with Vaultinum, you can be assured that you are doing so with a European trusted third party, with 45 years of experience in the protection of digital assets. Our source code escrow clients benefit from the highest level of security and protection, through our use of asymmetric encryption and ISO 27001 certification standards and implement strict access procedures in all of our escrow agreements.
What’s more, through our online dashboard, we make it easy for you to manage all of your source code escrow agreements in one place. If you’re a software developer looking to meet your client requests or increase your competitive edge, speak to us today to find out how Vaultinum can assist you with your source code escrow (or software escrow) needs.
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