Software Escrow

Ten years ago, most escrow conversations started with one question: where does the source code live? Today, the more pressing question is where the software runs, who controls that environment, and how quickly a business could keep it running if the vendor behind it suddenly could not. That shift captures the direction of the entire

Ask in-house counsel which part of a software escrow agreement took the longest to negotiate, and the answer is nearly always the release triggers. Insolvency, cessation of trade, failure to support, change of control – these events are debated line by line because they decide when the beneficiary gains access to the source code. Far

When a medical device manufacturer licenses software from a small, innovative developer, it gains a capability it could not easily build on its own. It also takes on a dependency that rarely shows up in a product roadmap: the ongoing ability of that developer to maintain, patch, and support the code. Most of the time,

The clinical champion loves your product. The pilot results are strong, the department head has budget, and the contract is almost ready for signature. Then the hospital’s procurement team sends over its vendor risk assessment, and one item asks something you haven’t planned for: does your company maintain a software escrow agreement, and could the

A procurement leader opens a renewal notice and finds a price increase twice the size of last year’s, along with a short note citing rising component, hosting, and labor costs. The increase itself is manageable. The question it raises is harder to answer: if this vendor is feeling the impact, how stable is the software

Ask in-house counsel which part of a software escrow agreement took the longest to negotiate, and the answer is nearly always the release triggers. Insolvency, cessation of trade, failure to support, change of control – these events are debated line by line because they decide when the beneficiary gains access to the source code. Far

Most enterprise risk registers contain a line that reads something like this: a critical software vendor ceases operations or stops supporting a product the business depends on. The likelihood is rated low. The impact is rated severe. And in the response column, someone has written a single word: transfer. That word carries a lot of

Software vendors rarely fail overnight – the warning signs usually show up months earlier. Release cycles slow down, support tickets take longer to resolve, a familiar account manager leaves and is never quite replaced, and roadmap conversations become less specific. By the time a formal announcement arrives, whether it is a bankruptcy filing, an acquisition

Ask a mature third-party risk program what it knows about a critical software vendor, and the answer is usually impressive. The team can produce the vendor’s SOC 2 report, its cyber insurance certificate, a financial health score, a data processing addendum, and a completed security questionnaire. Each document was requested, reviewed, scored, and filed on

Escrow provisions tend to surface late in a software deal. By the time they reach legal review, the parties have spent weeks on pricing, indemnities, service levels, and liability caps, and the escrow exhibit often arrives as a vendor-supplied template that everyone is eager to approve. That timing works against the licensee. An escrow agreement