How Software Escrow Protects Your Client (& Helps You Sell)

Looking for an extra edge to win software clients? Then meet software escrow. It shows your customers your credibility, commitment to security, and allows you to level the playing field with the big players in the software industry.

Not only does it provide an edge, but for many end-users, software escrow will be required for you to even earn consideration. It protects their investment and provides peace of mind.

If you really want to stay on the cutting edge and be a step ahead of your competition, use automated software escrow that is agile enough to keep up with today’s fast-moving developers.

In this post, we’ll show you how automated software escrow can lock things down for you and your customers and help you sell your software to new clients.

What Is Software Escrow?

Software escrow is a service provided by a neutral third-party (the software escrow agent, that’s us!) to a software developer (known as the depositor) and an end-user (the beneficiary). This service protects all parties involved in a software license agreement.

The protection provided by software escrow is essential because it ensures that things like your source code, data, and documentation are completely secure. The agreement provides comfort to the end-user that if the software developer doesn’t meet agreed-upon demands, the source code can be released to the end-user.

The agreement will outline all responsibilities involved for each party and includes pre-defined release conditions. If one of these release conditions occurs, the beneficiary can then apply to the escrow agent to release the software code.

What Is Automated Software Escrow?

PRAXIS took software escrow to a new level of protection when it invented the automated escrow process in 2016.

This represented the largest and most significant innovation in the software escrow industry in recent history. That’s because automated software escrow is the only software escrow agile enough to keep up with today’s rapid software development.

Modern developers push out source code more frequently than ever before. In some cases weekly, some even daily. This rapid development has made traditional software escrow, which is done manually, largely irrelevant. The traditional method typically involves the shipping of CDs and/or DVDs and submitting materials through a secure FTP. This process essentially guarantees that the escrow deposit materials will be outdated by the time they arrive.

The cumbersome traditional method of software escrow is more expensive as someone will have to manually update the deposit materials each week. With automated software escrow, you can remove these costly man-hours and automatically update your deposit materials on a weekly basis. The previous versions are all retained and built-out on an archive.

How Automated Software Escrow Works

Through the PRAXIS automated software escrow method, you can connect directly to most commercially-available source code archival systems, including GitHub, Bitbucket, TFS, and more. This allows the software developer to automatically update their escrow deposit materials.

It’s an incredibly simple process to get started, and no additional software is needed to make the initial connection. Once PRAXIS is connected, it will monitor the system and contact the client directly should an unlikely disconnection to the repositories occur.

This eliminates all administrative burdens to the software company and manually updates all escrow deposit materials each week. Not only are the materials updated, but PRAXIS will also automatically notify the depositor and beneficiary each quarter to give total transparency on their account activity.

The Benefits Of Automated Software Escrow

As you can see, a major benefit of automated software escrow is that it can save you time and money. No longer is updating escrow materials a tedious manual task. PRAXIS automatically updates and backs-up everything, letting your employees work on the actual software.

On top of reduced costs and administrative burden, you’ll also get to enjoy added peace of mind in knowing that your deposit materials are always automatically up-to-date meaning you are in compliance with your escrow requirement. With dramatically improved protection, both the depositor and beneficiary can rest easy knowing their data and source code is safe and secure.

How Software Escrow Helps You Sell

The benefits of software escrow will actually become major selling points to include in your business case.

It can become a new profit center for your business as well as an insurance policy for your client. Your clients may require to be enrolled as a beneficiary in your escrow agreement as part of their license or subscription agreement. Therefore, your software can upsell this service to turn it into an additional revenue stream for your business.

Another major selling point is the safety provided. The software escrow is an insurance policy for your client or partner. It ensures that if things go wrong, their data and source code is protected and will be handed over to them in the instance of a release condition.

In fact, many larger companies and government institutions might require that a software vendor has an escrow in place as part of the license agreement. If your company doesn’t have one in place, you may look illegitimate and/or small. Having automated software escrow in place is an easy way you can step up to the big leagues.

Lastly, since PRAXIS is the first software escrow provider to offer automated software escrow, it gives you a competitive advantage over your peers. In this fast-moving digital age, agile software escrow that can keep up with your development is vital to the safety of your valuable data and source code.


Consider that your software company likely has customers that require software escrow. You currently have to manually update the escrow each year. After five or so years, all of that work updating the escrow deposits really adds up!

Unless your escrow is automated, you’re losing a significant amount of time and money on this administrative task. Give PRAXIS a call today and let us know how we can help!

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