Common Software Escrow Misconceptions

Software Escrow is a strategic risk management tool designed to support business continuity. It emerged in the 1980s, a decade marked by the rapid growth of software adoption across all industries. As businesses became increasingly dependent on third-party software vendors, the level of risk attached to such vendors began to grow. In response, Software Escrow (also known as Source Code Escrow) was developed to provide a safety net, ensuring that critical software assets remain accessible, operational, and secure, even in the face of vendor disruption.

For a deeper dive into how Software Escrow has evolved over the years, check out our blog, ‘The Evolution of Software Escrow’.

For those who are unfamiliar with or new to the Escrow space, it can be challenging to identify and grasp the fundamentals of Software Escrow. If this challenge resonates with you, check out our blog, ‘A Beginner’s Guide to Software Escrow’.

This particular blog will explore some of the most common misconceptions surrounding the Software Escrow. Let’s dive straight in!

Debunking Common Software Escrow Misconceptions

There are numerous myths and misconceptions associated with Software Escrow. Here are some of the most common:

1. Software Escrow isn’t needed by smaller companies.

Regardless of a company’s size or stature, they are all susceptible to risk. Alongside safeguarding the software applications that are at the heart of large companies, Software Escrow can also be harnessed as a safety net for smaller companies. For such companies, the failure to manage risk and ensure business continuity can be highly influential towards how they progress and evolve. In addition to providing these companies with confidence and peace of mind, Software Escrow also mitigates against the risks of financial loss and reputational damage.

Through having a proactive Software Escrow Solution in place, smaller companies can also instil confidence in clients and partners through the demonstration of a risk mitigation strategy that places business continuity and stakeholder relationships at the forefront. Ultimately, Software Escrow is incredibly valuable for companies of all sizes.

2. Escrow is just about storing source code.

Designed by programmers, source code is human-readable code that determines the behaviours and functions of a software programme. Now, whilst the secure storage of source code is a fundamental component of the Software Escrow process, it goes way beyond this.

Alongside source code, other materials held in Escrow may include build instructions, third-party dependencies, deployment scripts, and even cloud configurations. A strong Escrow Solution is on that ensures that everything needed to recreate and maintain a software application is included and verified.

In the present day, Software Escrow can also be used to safeguard SaaS applications. For example, SES’s ‘SaaS Continuity’ service involves the SES team taking full responsibility for recovering critical SaaS systems following a disaster event. This is an example of Software Escrow going far beyond simply storing source code.

3. Having a stable vendor (software supplier) removes any need for Software Escrow.

A Software Escrow Solution is typically activated when a vendor encounters a problem, such as becoming insolvent or facing maintenance issues. With this in mind, some may assume that vendor stability eliminates such risks. However, even the most stable and most reputable vendors can be subject to unforeseen disruption. Importantly, Software Escrow is not about mistrust, it’s about risk management. It supports both vendors and their clients through creating a safety net that ensures a business’s ability to continue operations, even in the face of vendor disruption.

4. Software Escrow is complicated and time-consuming to set-up.

An initial concern that we come across a lot here at SES is the level of complexity as well as time that many assume is involved within the Software Escrow set-up process. However, the reality couldn’t be any further away from this. Our team place simplicity at the forefront when it comes to client projects. Our experts are here to break down the Escrow process in a way that’s detailed yet very easy to understand. Through clear, regular communication, any issues regarding the Escrow process are concisely addressed.

Furthermore, despite misconceptions suggesting that the setup of a Software Escrow Solution is a lengthy matter, Escrow Solutions can be set up and in place very swiftly once all parties are happy with the structure of a proposed solution. Software Escrow really is a lot more convenient and simpler than what many perceive.

5. Source code is automatically released to an end-user if something goes wrong.

Following a disruption event, it’s not guaranteed that source code will be released to the application’s end-user. Interestingly, a major benefit of Software Escrow agreements is that they clearly state and detail the specific conditions under which source code and other relevant materials are to be released. This mitigates against the risk of delays and legal hurdles posing issues when an end-user is trying to access source code in the absence of any risk mitigation tools being in place.

Working with SES Secure

Ultimately, Software Escrow isn’t about assuming the worst, it’s about being prepared for whatever situations arise. Through having a strong understanding of what Software Escrow truly entails and dispelling common myths and misconceptions, businesses can make smarter and more secure decisions.

If you’re considering a Software Escrow Solution or want to review an existing one, our team of experts are at hand to help. Our approach to projects is one that ensures that clients understand exactly what’s going on at every step of their journey with us. Furthermore, no two Escrow Solutions are the same – each one is bespoke and tailored to the specific needs, preferences, and specifications of the client.

Did you know? We currently have over 200 verified client reviews on Feefo – check them out here.

To ask a question or to arrange a chat with a member of our team, please don’t hesitate to get in touch.