What is a Source Code Escrow, and when do I need one?
Background Most businesses, even smaller ones, have at least one software license agreement that is mission critical. A source code escrow is an arrangement that can provide protection to the business should the software provider go out of business or discontinue support and/or maintenance for the licensed software. Even though the dot com bubble has burst, it is still very common to find smaller and/or newly formed software companies with valuable and useful software for use in niche areas and otherwise. Source code escrows can reduce or eliminate the risk of doing business with such a small or new company. Source code escrows are generally negotiated as a part of the initial software license agreement. They can also be entered into after the license agreement has been signed, but a licensee has much less leverage at that point to negotiate favorable terms. Typically, a source code agreement is entered into among the software provider, the business licensee and an unrelated third part
