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Escrow Services

Does anybody here use a software escrow service, I have had a couple of customers ask for this and am looking for a recommendation for a relatively low cost service.

Tony Edgecombe
Sunday, August 17, 2003

Sounds a bit suspicious really. I've never heard of anyone doing this.

What's the betting they put some clause in there that lets them grab your source code after six months? It would be easy to put some "reasons" into the agreement.

Sunday, August 17, 2003

It's very common when you are a small company dealing with large corporates.

Generally escrow services are offered by law firms.

Basically, they take a CD of the code as at delivery time and you sign a contract that says if your company goes out of business the client gets the CD.

Sunday, August 17, 2003

I've used them a couple of times.  I used the service the company wanted me to use, they paid for it.

Sunday, August 17, 2003

Often, you can just have your Lawyer hold a copy of the source code on a cd, and have agreement made.

If things such as sudden death, or some health problem prevents the project from being completed, then the source code can be released to company, or even to another software development firm to continue development.

I mean, I would feel bad for some of my clients if I was incapacitated, as thus no further development would be able to occur on many of my applications. This kind of problem could SERIOUSLY hurt some of these companies. It is strange, but the majority of companies DO NOT ask for some type of escrow agreements. In those cases where software development is occurring, but source code is NOT being provided, then the client is REALLY dumb not to insist on this type of agreement.

I will admit that I generally do not offer the source code unless asked. Further, in certain cases, if source is provided, then billing rates and amounts will change.

I care about my clients, and thus I do have code on CD’s at my lawyer with instructions to release that source code to some of my important clients in the case of death, or serious illness. The problem during development cycles is that this code in escrow often is months behind the production version.

IN fact, in some these cases the clients don’t even know that I have instructions for my code to be released. Thus, in effect means some of my clients get escrow for free from me.

Of course, often escrow is often used to protect the developer also. You don’t want to release the source code until the project is completed and MORE IMPORTANTLY YOU ARE PAID! So, once paid, and the project is completed, then source code is delivered. Otherwise, you can be fired at any point, and another developer hired.  You can even relase code after a certanly amount of progress (and money) has been made.

So, the concept of escrow can be used to protect either party, and both developer, and clients can benefit from escrow agreements.

Albert D. Kallal
Edmonton, Alberta Canada

Albert D. Kallal
Sunday, August 17, 2003


We use DSI. I don't know what is cheap, but they are probably not.  If you are dealing with large corporations, they will want a real software escrow agent, not your cousin, the lawyer.  As someone noted above though, you can often get them to pay for it. Certainly you can get them to pay for their "half" of the escrow agreement.

Also, to the extent you get more customers that demand escow, it will be much easier if you only have to make one escrow deposit for all of them. (if you are updating and maintaining code, you will have to make deposits on a regular basis)

Paul Mansour
Sunday, August 17, 2003

There was some tussle about Microsoft having this type of deal with some cell phone company and then tried to put them out of business to get the technology.

Keith Wright
Wednesday, August 20, 2003

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