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.