What is Software Escrow?
What is Escrow?
The English term Escrow means Escrow or deposit and is used primarily in the IT and legal sectors.
In Old French, the word referred to the object of deposit, the „scroll“(escroe) itself.
Escrow is therefore understood here as the deposit of any item with a neutral third party, the so-called escrow agent.
The escrow agent may only release or pass on the item entrusted to him under certain circumstances.
What is Software Escrow?
Software escrow (also called digital escrow ) focuses on depositing the source code of software or other digital documents.
With software escrow, the software provider does not want to release the source code to its customer, i.e. software user or licensee, but allows it to be made available or viewed when defined events occur (e.g. insolvency).
At ESAG Escrow Services AG, you will be guided through the entire process and benefit from the high level of expertise in fiduciary, finance and IT.
Application areas
Do you use a business-critical application, without which business processes would come to a standstill?
Do you have applications that have been further developed or modules for existing applications?
Do you rely on suppliers who contribute important know-how to your business success?
What do you do if these partners cease their activities or are bought out by large dominant companies and no longer want to take care of your application, design, modules?
Escrow services give you the professional assurance that you will have access to the source code in all scenarios you define, thus preventing a know-how drain. Your business processes as well as your business success will thus be secured.
Software escrow is primarily used in the following use cases:
Failure of the software manufacturer
In the event of a failure of the software manufacturer (e.g. due to insolvency), the source code is required in order to be able to continue to operate, maintain or further develop a software.
In this scenario, the software vendor deposits the source code with the escrow agent, which must hand over the source code to the software user under certain circumstances.
Cessation of further development
Your software partner decides to no longer develop the business-critical application for you, as this is no longer lucrative or timely for your software partner. This scenario happens every day.
With the deposit of the source code and the correct contract details your software partner is obliged to inform you about it as well as to make the source code available to you.
Takeover by another company
There is an increasing tendency for small and medium-sized companies to be taken over by large, dominant companies in the medium term. Mergers of two large companies in order to gain an even stronger market presence have also become a standard process. Often, new strategies are defined which have a significant impact on you as the end customer. Here, too, there is a latent danger that your software will no longer be developed or maintained. Digital Escrow protects you in such cases and gives you the complete source code to continue your activities.
Deposit of share certificates
Shareholders‘ agreements (ABV) generally stipulate that the contracting parties may or must transfer their shares only in accordance with certain rules. In particular, rights of first refusal or rights of first refusal as well as co-sale rights and obligations in favor of or at the expense of the contracting parties are frequently agreed. In practice, the question regularly arises as to the possibilities for securing the enforceability of these rights and obligations. In particular, the aim is to restrict the ability of the contracting parties to dispose of their shares in such a way that they can only do so in accordance with the contract. Their legal ability shall correspond to their contractual may. Breaches of contract are to be prevented as early as possible and not sanctioned retrospectively.
The most efficient means of security for this is the deposit of the share certificates with us as escrow agent with the corresponding protective contract.
Data and document escrow
Data and documents are becoming increasingly important in the digital age. The business-critical know-how of suppliers is decisive for the success or even the existence of individual companies.
Using the data and document escrow of ESAG Escrow Services AG, you can for example
- Construction plans
- Construction plans
- technical documents
- Pattern and
- Patents
safely store and in case of emergency (insolvency, cessation of operations, takeover by another company) access the know-how that is critical for you.
Data transmission
We offer two options for data transmission
Digital
Transmit your data over a highly encrypted connection.
In a simple way, the licensee can provide us with the data in digital form and integrate this immediately into his deployment process.
Decryption of data and verification of data consistency are performed in our high-security environment.
We then copy the data onto a physical storage medium and deposit it directly in a Swiss bank safe deposit box.
In the last step of the transmission, we delete the transmitted data completely and securely, so that there is no possibility of reconstruction.
Analog
The classical way is the provision of the data carrier with the sensitive information by the licensor to the escrow agent.
The latter deposits and stores the data carrier securely in a Swiss bank safe deposit box.
Licensor as well as licensee receive the information about the deposited object including the versioning.
With security to your solution
You are just a phone call away from finding your right escrow solution.
Request a callback by email or contact us by phone now.
A friendly expert will be happy to advise you.
