For What Purpose is Software Escrow Most Commonly Used?
Published on 21/01/2025
For those that are unfamiliar with the concept of Software Escrow, researching the topic may prove to be somewhat overwhelming. A simple search can lead to a plethora of information, with many pieces of information being complex and tricky to grasp.
Based on the numerous conversations we’ve had with clients seeking guidance on Software Escrow, a question that pops up over and over again is ‘what is the most common purpose that Software Escrow is used for?’. Well, this blog will answer that question in a simple and easy-to-follow breakdown.
Before we delve into the purpose of Software Escrow, it’s worth revisiting what it actually is and the main processes that are involved.
Essentially, Software Escrow is a risk mitigation tool that protects critical software applications. A critical software application is an application that an organisation relies on heavily, such as a financial transaction system. Software applications are comprised of ‘source code’ which determines their functionality and behaviour. The Software Escrow process involves an Escrow agent, such as SES Secure, holding and storing a software application’s source code.
Now, if a disruptive situation arises in which an end-user’s access to a critical application is interrupted, an Escrow agent may release the source code that was deposited with them. This enables the end-user to commence business operations despite the occurrence of external disruption. At SES, a common situation that has initiated a source code release event for many of our clients is that of a software vendor going out of business.
Check out our client case study.
The term ‘business continuity’ is synonymous with the Software Escrow space, and this is due to the fact that a business’s ability to maintain continued operations is well and truly optimised by Software Escrow.
Ultimately, in an event in which an end-user loses access to a critical application, Software Escrow offers an end-user a means of accessing the application’s source code and consequently obtaining operational, uninterrupted access to the application. Alongside the great deal of convenience offered by Software Escrow, it also protects an organisation’s reputation and minimises the risk of financial loss following a crisis event.
Let’s put this into an example:
An event company loses access to a ticketing platform, causing their customers to be unable to buy event tickets.
The company’s Escrow agent is informed abut the situation. They then provide the relevant source code to the company. For SES clients, this source code would have been tested beforehand to ensure that it can be accurately redeployed.
As a result of the Software Escrow process, the event company is able to regain the capability to operate the ticketing platform.
Want to learn more about the client cases that we've worked on? Check out our case studies.
When Software Escrow was first developed, it was mainly used to mitigate risk for on-premises software. However, in conjunction with the evolution of technology, Software Escrow evolved into a tool that could also protect SaaS applications through SaaS Escrow services. Interestingly, a common misconception is that Software Escrow does not apply to SaaS/cloud-hosted applications. However, such applications are actually more at risk when a proactive risk mitigation strategy is absent.
In 2020, SES secure innovated a one-of-a-kind SaaS service, SaaS Continuity. SaaS Continuity facilitates the rapid recovery of SaaS applications during unforeseen disruption event. Within this service, the entire disaster recovery responsibility and accountability is taken on by the SES team. Essentially, our team step in and carry the disaster recovery process for the client, saving them time and providing them support during what could be a stressful situation.
To learn more, please get in touch. Our team are always at hand to help!