As the leading provider of software escrow solutions and secure escrow services, PRAXIS comprehends the vital importance of protecting your business critical software and ensuring uninterrupted business operations in unforeseen circumstances. Leveraging our expertise in software escrow agreements, we offer peace of mind and robust protection for your mission critical software applications.
What is Software Escrow?
At PRAXIS Technology Escrow, we ensure your software investment is secure and protected, for all parties involved.
“Set it and forget it” knowing that your escrow deposit is always updated. Save time and money while improving quality
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SOC 2 Compliance
Our rigorous adherence to SOC 2 standards ensures that your data is handled with the highest level of confidentiality, integrity, and availability. You can trust that at PRAXIS, your data is in safe hands.
The Importance of Escrow Agreements for Software
What is an escrow agreement for software? An escrow agreement for software is a legally binding contract that outlines the terms and conditions of the software escrow arrangement. It establishes the rights and responsibilities of the software vendor, the software licensee, and the escrow agent. This agreement acts as a safety net, providing you with guaranteed access to the source code and related materials, protecting your business interests.
Secure Escrow Services
At PRAXIS, we provide top-notch secure escrow services tailored to meet your specific needs. Our highly skilled escrow agents ensure the safekeeping of your software assets, implementing strict security measures to maintain confidentiality and integrity. You can trust us to handle your software escrow requirements with the utmost professionalism and expertise.
PRAXIS Technology Escrow provides:
PRAXIS Technology Escrow supports both types of development methodology:
Major versioning with new functionality released on specified frequency.
New functionality and releases added much more frequently, often weekly.
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Frequently Asked Questions
Any company that is relying upon software to perform a business-critical application should consider whether or not an escrow agreement would be beneficial if their software vendor were to go out of business or fail to support the application. In addition to the financial strength of the software vendor,our clients commonly consider how other factors such as the potential impact of a natural disaster, an act of War or some other unforeseen circumstance may impact their ability to support the application. In certain competitive environments the mere fact that you are software provider might be acquired by a competitor can also be a troublesome factor worth considering.
Common considerations in deciding if an escrow agreement is warranted include but are not limited to:
- Cost of the application
- Impact of lost revenue / profits
- Impact on brand
- Impact upon customer retention
- Cost / time to replace
- Identification of a suitable replacement
- Access to updated data back up
Generally speaking, the software company should deposit everything that a “reasonably skilled” software engineer would need to build and support the application as licensed in the license agreement. This typically includes a description of the build environment. build instructions, source code, documentation, third-party software tools and more so that the application can be created from the escrow deposit materials.
The best practice is to negotiate and sign the software escrow agreement at the same time that the software license agreement is negotiated and executed. Many of our clients include the escrow agreement as an exhibit to the software license agreement. Taking this approach is helpful because all parties have the opportunity to negotiate and agree upon all material escrow terms and the agreement is in place before significant dollars are spent on the application. In the event that the software project doesn’t go as planned, parties may find it difficult or impossible to agree upon escrow terms at a later date.
The United States offers the most developed laws regarding software escrow and US bankruptcy codes were adjusted in 1986 to allow escrow agents to release escrow deposits in the event of bankruptcy of the software provider. This is not necessarily true in other countries and can lead to difficulty and delays in gaining access to escrow deposit materials. Thus, the greatest majority of software escrow deposits and agreements are subject to US law and as a result the vast majority of all escrow deposits are stored in the United States, whether they are in physical or electronic format.
PRAXIS provides many different software escrow agreement templates to meet many different situations. It is often helpful to consult with your Account Executive to find the agreement template that most closely resembles your needs. The bulk of our clients then modify certain terms to more accurately fit the specific situation they have encountered. Examples of customizations that make significant difference include modifying the escrow release conditions, defining what should be placed into the escrow deposit materials, customizing the time frames related to a release and even changing the governing law for the agreement. While our escrow agreement templates are very thorough, we believe strongly that the customizations that our clients add to these standard contracts help and derive far more value from their escrow agreement with PRAXIS.
Software escrow agreements are crucial for both software vendors and licensees due to the following reasons:
For Software Vendors
Build Trust and Confidence: Offering a software escrow agreement demonstrates the vendor’s commitment to their customers’ interests. It builds trust and confidence in the vendor’s products and services, assuring customers that their investments are protected.
Competitive Advantage: In competitive markets, having a software escrow agreement can give vendors a competitive edge. It showcases their professionalism, responsible approach, and willingness to go the extra mile to ensure customer satisfaction.
Mitigate Legal Risks: A software escrow agreement helps vendors mitigate legal risks. It provides a clear framework for ownership, licensing rights, intellectual property protection, and potential disputes, reducing the likelihood of legal conflicts with customers.
Ensure Revenue Stream: By assuring customers of access to the source code in unforeseen circumstances, vendors can maintain ongoing revenue streams. Customers are more likely to invest in software solutions when they have confidence in their long-term viability.
Protect Investment: Licensees invest significant resources in software solutions. A software escrow agreement ensures that their investment is protected. If a vendor fails to provide updates or support, or goes out of business, the licensee can still access and maintain the software.
Business Continuity: Software escrow agreements provide a safety net for licensees, ensuring business continuity. If unexpected events occur, such as the vendor’s bankruptcy or inability to support the software, the licensee can continue using and maintaining the software with access to the escrowed source code.
Risk Mitigation: Licensees face risks associated with vendor reliability, financial stability, and product longevity. A software escrow agreement mitigates these risks by providing a contingency plan and ensuring access to the source code, reducing dependency on the vendor.
Compliance with Regulations: In certain industries, regulatory compliance requires a secure and auditable process for software procurement. A software escrow agreement demonstrates compliance with these regulations, providing transparency and accountability.
Overall, software escrow agreements benefit both vendors and licensees by fostering trust, mitigating risks, ensuring business continuity, and providing a solid foundation for long-term software usage and maintenance.
Benefits for a Software Vendor:
- Smoother negotiations
- Win more new business
- Establishes confidence by addressing the concerns of the prospective licensees
- Safe storage of source code and other materials with one company instead of scattered across multiple providers
Benefits for a Licensee
- The ability and legal right to maintain, update and enhance mission critical software
- Reduced chance of significant interruption of, or damage to, its business
- Eliminate concerns regarding the software vendor’s capabilities
- Business continuity
How Much Does a Software Escrow Agreement Cost?
We understand that cost is an important consideration for businesses. The cost of our software escrow services depends on various factors, such as the complexity of your software, the escrow agreement terms, and additional customization requirements. Contact us today for a personalized quote tailored to your specific needs.
Choose the Best Escrow Services
When it comes to protecting your business critical software applications trust PRAXIS as your partner of choice. Our extensive experience, exceptional service, and dedication to client satisfaction have made us the preferred provider of escrow services for numerous organizations. Join our satisfied clients and experience the peace of mind that comes with our reliable software escrow solutions.
Secure Your Software Today
Don’t leave your business critical software applications vulnerable to unforeseen circumstances. Secure your software today with our trusted software escrow solutions and secure escrow services. Contact us now to discuss your requirements and get started on safeguarding your valuable software assets.