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What Happens If You Invest In Escrow To Protect Your Critical Applications & Then Never Need It?

Published on 28/06/2017

CEO to CTO: What happens if we invest in Escrow to protect our critical applications and then never need it?

CTO: What happens if we don’t and our developer is unable to support us or our critical applications?

If you never need to draw on your Escrow protection, is it a wasted opportunity?

In short, no…

Setting up a Software Escrow Agreement between yourself, your software developer and your chosen Escrow agent, protects your business critical applications. A copy of your source code is placed in Escrow, to be accessed in the event that your software developer is unable to support the application.

It is easy to dismiss Escrow as something you’ll never need without fully understanding the risks involved with not protecting your business critical, bespoke, highly customised or revenue generating applications.

The below list includes some of the more common myths surrounding Escrow, enabling you to make informed decisions regarding the protection of your critical applications.

“Our software owner is a global organisation, they have been around for many years, everybody uses them… They are too big to fail”

Unfortunately, no business is too big to fail. Industry, size, market share and turnover are all irrelevant. A prime example of this was Avaya – a multinational technology company specialising in Internet telephony, wireless data communications and customer relationship management software – Avaya filed for bankruptcy in January 2017.

“We wouldn’t be able to use the source code if it was released to us”

As part of your Escrow coverage, SES can provide further validation testing services that demonstrate that the source code deposited in Escrow can be accurately rebuilt into a working application.

These further validation tests involve your software developer rebuilding the application in their own environment, whilst an SES testing consultant witnesses and documents the build process.

The independent build report, necessary for any software developer to swiftly and accurately rebuild the application is then deposited in Escrow alongside the application’s source code.

“We don’t see it as value for money”

To understand the real value an Escrow agreement provides it is important to consider the cost of the agreement VS the cost and impact to your organisation of not having your business critical applications protected and your supplier failing, plus the combined cost, time and effort you would need to invest in procuring a replacement application.

It is also important to note that by definition, having an Escrow agreement in place also reduces the amount of money you would need to set aside to potentially replace a failed application.

You may never need to draw on your Escrow protection, but as I see it, the risks of not having Escrow far outweigh the costs of putting it in place.

To find out more about protecting your business-critical applications with Escrow, please get in touch


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