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Frequently Asked Questions
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Frequently Asked Questions

This page contains answers to commonly-asked questions about our software escrow services.
Please Contact us should you require further information.

What is Software Escrow and how does it work?

Our Software Escrow service is an agreement between a Licensee (user of the software), the Vendor (provider of the software) and Trusted Information Services (independent 3rd party escrow service provider) whereby the source code of a licensed software product is lodged by the Vendor with the escrow services provider for deposit in secure storage on behalf of all the parties. The basis of this agreement is all contained in the Escrow Agreement which is signed by all parties.

Software Escrow provides insurance for the Licensee to access the source code in clearly defined circumstances as stated in the Escrow Agreement in order to carry on using and maintaining the software without interruptions in the event of the Vendor being unable to fulfil their obligations as stated in the Escrow Agreement. Please contact us for further information about our standard and customised Software Escrow Agreements.

Can Cloud based software solutions be lodged in Escrow?

Yes. Even with Cloud based computing there is underlying software written by a company or person so this software can still be lodged. One does need to establish who the Licensee is as there are different scenarios depending on arrangements made between the Software Vendor, Cloud hosting provider and companies using the hosted software.

What should I consider as a Licensee using 3rd party software to determine if Software Escrow is appropriate for my requirements?

There are a number of questions you need to consider. Do you use custom or proprietary software/technology in which you have made a substantial investment that is provided by another party? Would you be adversely affected if your Vendor (software provider) were not available to support your licensed software? Do you want to know that if your Vendor went out of business or discontinued support you could still maintain and support your software internally? Are you in a position to redevelop the software internally should the Vendor go out of business or no longer provide enhancements to meet changing business requirements and is the time and cost to do this prohibitive?

If you answered ‘Yes’ to any of these questions, it is worth considering Software Escrow as risk mitigation to ensure on-going continuity for your business.

Why would a Vendor providing software benefit from Software Escrow?

Software Escrow provides a number of tangible benefits to software Vendors and is seen as a valuable marketing tool for generating business as organisations look to mitigate the risks associated with 3rd Party software. There are a number of questions to consider when determining the suitability of a Software Escrow arrangement.

Would your potential customers ask how the software will be supported in the event of product discontinuance or bankruptcy? Do you have investors that require protection of their investment? Are you interested in a way to create ‘added value’ for your product and have the use of Software Escrow as a marketing tool? Are competitors providing Software Escrow as a standard offering to clients? Are you interested in a way to clearly document your Intellectual Property product development? Do you want to protect yourself against an employee or competitor Intellectual Property piracy? Is there a need to have a ‘last resort’ disaster recovery capability to protect your software?

If you answered ‘Yes’ to any of these questions, it is worth considering Software Escrow as a means to protect your interests and at the same time provide a valuable marketing tool for securing new clients.

What are the benefits of using Trusted Information Services as an Escrow Agent?

Trusted Information Services provides legal protection to both Licensees and Vendors via our industrialised Escrow Agreements and services that are straight forward, easy to understand, fair to all parties and have been tried and tested over many years. We also have the flexibility to provide customised Escrow Agreements and services to clients were needed to meet bespoke requirements. Our philosophy is to make the ‘escrow process’ as simple and clean as possible to allow Licensees and Vendors to rapidly set-up escrow arrangements with a minimal administration overhead while still ensuring there are tight controls and management over the end-to-end process. 

We have a flexible pricing model that depends on the service required and are able to offer ‘off the shelf’ Escrow services at very competitive prices. With our experience in providing Escrow Services in Southern Africa since 1996, we believe our knowledge and understanding of the industry, capabilities and storage facilities, flexibility in providing services in accordance with client requirements and our ‘can do’ approach, are strong enablers for a simplified and robust Escrow Service offering to both new and our existing client base. Please contact us for further information about our services.

Are there circumstances when Software Escrow is not appropriate?

Yes. There are a number of situations where software escrow may not be appropriate. Each circumstance needs to be evaluated independently as there is not a definitive ‘one fits all’ answer. The three examples below indicate circumstances where a Software Escrow arrangement might not be suitable:

Where you have a 3rd party hosted service it is complicated to bring this in-house as apart from the software, you would also have to set up the infrastructure internally to move from a hosted to the local system. As access fees for hosted software are generally lower than the licence fees you pay for local software, switching to another 3rd party hosted service provider might be a more cost-effective solution.

Where you have low value or standard package software it would in all likelihood be easier and cheaper to move to an equivalent package versus trying to implement and manage the source code yourself.

Where you have a software solution provider developing and implementing software for you that includes multiple 3rd party software applications, as it would be unlikely that the 3rd parties would place their source code in escrow. In the event, this is the case unless all parties agree to use escrow, the cost and effort to try and maintain the source code internally probably outweigh the benefits of placing in escrow.

If you are unsure whether Software Escrow is appropriate for your particular circumstances and software, please contact us to discuss your requirements.

How easy is it to conclude an Escrow Agreement and what is needed to complete this process?

Trusted Information Services provides standard Escrow Agreements that are easily completed by Licensees and Vendors. The content of the Escrow Agreement clearly outlines what the roles and responsibilities of the various parties are in addition to the lodgement requirements and release event process.

Once completed and signed, the Vendor provides the Software or Intellectual Property to Trusted Information Services for lodgement. The Escrow Agreement becomes ‘active’ once payment for the service has been received by Trusted Information Services. Please contact us for further details regarding our Escrow Agreements.

What are the different types of Software Escrow Agreements provided by Trusted Information Services?

Trusted Information Services has two standard Software Escrow agreements. There is a ‘Single Beneficiary’ agreement which is used when a Licensee and Vendor want to have a dedicated arrangement with themselves and Trusted Information Services. This is called a ‘Tri-Party’ agreement.

There is also a ‘Multiple Beneficiary’ agreement which is used when a Vendor has software that is used by multiple Licensees and requires blanket protection to multiple Licensees under the same agreement. This agreement is between the Vendor and Trusted Information Services and facilitates new Licensees being added as/when they acquire the software without the need to redo the agreement. This is called a ‘Bi-Party’ agreement.

Trusted Information Services also has a standard Intellectual Property Escrow agreement and is able where required, to engage with clients to provide a customised Escrow service agreement. Please contact us for further details of our Escrow Agreements.

Can an Escrow Agreement be customised to suit specific requirements?

Yes. We provide standard Escrow Agreements which are industry standard and meet the majority of our clients’ requirements but where customisation of an Escrow Agreement is required, this can be done. It will require additional legal input from the parties involved and cost more to set up given the customisation. Please contact us for further information about our standard and customised Escrow Agreements.

Can an Escrow Agreement be transferred?

Yes. This can be done providing all parties are in agreement and the content of the Escrow Agreement is still valid with the new arrangement. Where this cannot be achieved, the alternative would be to set up a new Escrow Agreement. Should you require further information regarding the transfer of Escrow Agreements, please contact us.

How and where is Software and Intellectual Property stored?

All Software and Intellectual Property we receive is stored away from our main office at a secure, state-of-the-art storage facility operated by storage experts of many years standing.

This facility is protected by state-of-the-art alarm systems, designed to protect your source code and intellectual property in every eventuality including fire and extreme weather, is air-conditioned to ensure temperature and humidity remains stable, has restricted access to the storage media for essential personnel only and has strong controls and processes in place to manage storage media.

Who pays for the Escrow Agreement and service and how much does it cost?

There are three (3) options when paying for the Escrow Agreement and service, dependent on what the arrangement is between the Licensee and Vendor. In the majority of cases, the fees are split equally between the Licensee and Vendor on an annual basis, although it is also possible for the Licensee or Vendor to pay the full amount should this be the arrangement concluded between them.

If the standard Escrow Agreement and service is used (no customisation), there is no initial setup fee. Where a customised Escrow Agreement and service is required, fees will be agreed upfront between all parties and charged accordingly. There is a fixed annual recurring fee which is charged from the time the Escrow Agreement has been signed by all parties. Our standard fee pricing model is simple and easily understood with no hidden costs (what you see is what you pay). For further detail on pricing, please contact us directly for a quote.

What triggers the release of source code?

Our Software Escrow Agreement clearly defines what triggers a release event and the process adopted in the event of this occurring, with this being mutually agreed and signed by both Licensee and Vendor at the outset. General triggers for a release of source code could include the Vendor ceasing to trade, being wound up, defaulting in any material obligation to provide maintenance or modification, breaching any material terms of the Software Escrow Agreement and failing to remedy. 

Our Software Escrow Agreements place strict limits on how a Licensee may use the source code in the event of a release event. This is clearly defined in the Escrow Agreement and mutually agreed and signed by both Licensee and Vendor. In the main, the Licensee may use the source code only to maintain their software application. The Licensee cannot copy source code, remove copyright notices, sub-licence or use it to offer a new product or service to another company unless this is explicitly agreed as part of the Escrow Agreement between Licensee and Vendor.

Please contact us for full terms and conditions relating to source code release that is contained in our Standard Escrow Contract.

Does Trusted Information Services do any standard checks when receiving Software or Intellectual Property for lodgement?

Yes. This is provided as part of our standard Escrow services and a fee per the Escrow Agreement (one of the responsibilities of the Escrow provider).

Trusted Information Services conducts a visual check of every escrow deposit and update, undertakes a virus scan and confirms that deposited materials are complete for each lodgment in accordance with the Escrow Agreement. Software Verification is not included as part of our standard Escrow Agreement but can be undertaken as a separate arrangement should this be required.

Do Software and Intellectual Property Escrow Agreements allow for updates and how does it work?

Yes. In addition to the initial lodgement of Software Escrow or Intellectual Property Escrow at the time of the agreement being concluded, Trusted Information Services allows a further two (2) lodgements per year as part of the standard service offering.

Lodgements are provided by the Vendor as new versions become available. We actively encourage Vendors to provide regularly updated versions of Software or Intellectual Property on a bi-annual basis and notify Licensees accordingly when the new version is lodged.