Developing code for software is time-consuming and intricate work. A developer can spend months or even years tweaking the source so that piece of software does exactly what it is meant to do before releasing it to the masses.
As a company you might have paid a pretty price for software critical to the running of your business through a bespoke software developer. The developer will want his or her intellectual property rights protected and the business owner will want his or her company protected with the continued use of critical business systems.
For both parties to get the peace of mind required for business systems to continue to be written, purchased and developed, software escrow is available. Companies such as NCC offer this service, but what exactly does it do?
Simple three-way contract
The software escrow provider acts as a mutual third party between the software supplier and the end user. The programmer or programming firm will have the IP rights protected as part of the agreement and the company using the software will have the peace of mind that the development of it will be on-going for the long-term.
In essence, the source code is deposited with the escrow company and depending on the terms of the agreement, ensures that the company using the program gets the development, maintenance and explicit use of the software, while the developer will be safe in the knowledge that its code is safe and not being misused.
Types of agreement
There are several types of agreement available and even bespoke ones for unusual circumstances in order to simplify the process and offer software escrow as an easy option. The main ones that NCC Group offers are: single licensee and multi licensee.
In simple terms, the single licensee agreement is for companies who have had software developed explicitly for them and for developers who produce code for just one business. Should the supplier go bankrupt or lose the ability to be able to develop the software for whatever reason, the code will go to the licensed company for in-house development or to give to a new supplier.
The multi licensee agreement is for when a software application is in use by multiple end users. With this agreement, outside organisations can become new licensees with the use of a valid license. When a supplier can no longer develop the software the licensees can apply for the code to be released to them.