Over the past 15 years, I have protected the data of over 1,000 enterprise companies.
Enterprise companies traditionally put in place software escrow agreements to protect the software that runs their business. The idea is that if the software developer is unwilling or unable to maintain the software, the customer can receive the source code and continue to maintain the software with another developer.
From my experience, many enterprise companies blindly sign a software escrow agreement and then forget about it. Here are 5 tips to ensure that your software escrow agreement actually protects your company.
- Ask yourself these questions ….
- When did our developer last update the escrow deposit with a new version?
- What would happen to our business if we ever needed to use that code and the code was an old version?
- When was the last time our escrow agent contacted us to advise that the deposit was not up to date?
2.One of the biggest risks with a software escrow is ensuring the deposit it up to date. The onus is put on the developer to remember to deposit the updates on a regular basis. In reality, this is not done as often as it should.
When an escrow agreement is put in place, the escrow agent should set in place an agreed schedule with both the developer and the beneficiary of a proposed timeline of updates. If this schedule is not met, it should automatically be escalated until an up to date version is deposited.
- Can anything be done with the source code in the event that it is released?
A full verification is a vital component to ensure that the source code deposited can be built into a working and functioning application. It is also a good idea to have key employees in your organisation be present during the verification to overview the steps required to compile the code.
- Cloud (SaaS) applications can also be protected with a software escrow. This involves a deposit of the run time environment. The risk with SaaS applications is protecting the hosted database and ensuring that you have access to a recent version of this data. Your SaaS vendor will reassure you that they have a backup of your data. This is great, however in the event of a release condition, you will not have any access to this data. In order to protect your company, you need to ensure that the database is deposited on a frequent basis.
- Release conditions need to be carefully negotiated within an escrow agreement. You need to ensure the release events are clearly outlined and that a process of arbitration exists. It is important to have an escrow agent that is flexible with changes to their agreements..
- Treat the software escrow as an integral part of your business continuity plan. If your developer is not around to support your software, you need to determine the resources both hardware and personnel that you need to have in place in order to take over from where the developer left off.
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