The importance of escrow for tech firms

escrow paymentsThe importance of escrow for tech firms

The impact that technology advances have on commercial activities is increasing by the day.

Both hardware and software innovations are changing the way customers and clients interact with commercial enterprises of all kinds on a daily basis, and tech firms are at the cutting edge of these developments.

From the largest multinational corporations through to SMEs and home-based sole-traders, the reliance on digital systems for routine activities is now critical.

The flip side of this is that a system’s failure can have dramatic consequences, so guarding against potential problems has to be a priority for all.

Software dangers

The threats of a virus or determined hackers are often in the news but far more mundane occurrences are the cause of most software related problems. Any system can crash for many different reasons no matter how simple or how complex they might be. However, when an application suite or software programme becomes corrupt and unusable the consequences for a business can be devastating.

Using an escrow source code arrangement can safeguard against the worst case scenario, there are a lot of companies willing to provide this service as well as giving free impartial advice. A good place to start would be to get in contact with a trusted provider to discuss the finer details.

Escrow solutions

The idea of using escrow services may be new to many, but in some areas of business the idea of a trusted third party holding onto materials or information to be released under set circumstances is well established.

Today in any situation where complex intellectual property rights are involved, having an independent escrow agent to act as an intermediate between a software provider and customer can be an ideal solution.

There are specialists in the field of software escrow and verification who offer a range of services aimed at making sure both parties’ interests are protected. In the case of a system failure where source code needs to be made available, there are many situations in which the original providers may be unable to comply. In such an event, the client side company would be placed in a damaging situation.

An escrow arrangement makes sure that the long-term availability of source code, data and other materials needed to recover from a catastrophic failure is in place without risking the security of the materials. This means that the creators’ rights and patents are safe and that the client’s continued use of the materials is also assured.

Ultimately a software escrow solution is a simple and effective arrangement which is designed to minimise risk and protect the interests of both sides. For tech firms they can be an excellent way to protect their own ‘crown jewels’ whilst also offering customers the greatest degree of confidence in the long term.

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