Total Escrow Solutions has successfully been awarded the impressive ISO 9001 certification. The certification which is backed by the UK Government and is recognised worldwide has only been achieved by only about 5% of UK businesses.

Following an assessment by an independent body, Total Escrow Solutions Plc was awarded the prestigious award for their high standard of business operations. Wynn Walker, who undertook the assessment for QMS International Plc, paid particular tribute to “the investment in people and training that enables Total Escrow Solutions to provide efficient services to their customers”.

A delighted David Clee, Managing Director, explained;

“We have always been proud of the service that we offer our clients and the way in which we conduct our business. Now with the award of ISO 9001 certification, this has been confirmed by outside experts who are used to judging standards on a daily basis in a wide variety of trades and industries”.

ISO 9001, developed by the International Organization for Standardization (ISO), is the most comprehensive standard in the ISO 9000 series. Registration to the prestigious international standards ensures that the company maintains the proper procedures and processes for a complete quality system. The ISO 9001 certification is awarded to companies that pass a rigorous investigation process in which they demonstrate a unique range of business qualities. Including; a structured approach to business, a customer focused organisation, and a continuous drive for improvement.

The software escrow market shows great growth potential in 2012. David Clee notes;

“A software escrow agreement protects a business most important asset, their software systems. Previously many organisations have been taking risks by not investing in software escrow. Organisations are beginning to understand the necessity of software escrow and are placing a greater emphasis on having it as part of their business continuity plans. Gaining ISO 9001 simply reinforces Total Escrow Solutions creditability as a secure and reliable software escrow agent”.

By committing to the principles of ISO 9001, Total Escrow Solutions has laid the foundations that will enable it to provide world class software escrow services to current and future clients.

Third party software vendors supply a wide range of applications that perform many different functions to many different departments across the whole of UK Public Sector. These applications enable organisations to deliver the level of service required to meet strict government performance targets and ultimately deliver the services that the electorate demand.

Software Escrow agreements enable you to mitigate the risks that are inherent when you rely on a third party software vendor. A software escrow is an arrangement where the owner of the software gives a copy of the application source code to a trusted third party, usually an ‘escrow agent’. The software escrow agent then holds the source code, under the terms of an agreement. This agreement includes a pre-defined set of “trigger events”. When one or more of these events occur, it triggers a “release event” and the “escrow agent” may hand over the source code to the user. So, should your third party software vendor no longer be in a position to perform their duties and warranties as specified in the license agreement or service and maintenance contract you would then have the legal rights to access the source code to enable further development and maintenance of the application to meet your operational requirements, you will also have the option of providing the source code to another developer who would then replace your existing developer for support and maintenance.

There are two main types of escrow agreement:

• Single User

Single user software escrow agreements are used when the application has been written or enhanced specifically for you the client. This is called a bespoke application and must be covered by a set of terms that both licensee and vendor are comfortable with. Only by using a software escrow agreement can you ensure that you business continuity is guaranteed.

• Multiple User

A Multiple User software escrow agreement is used when the application is of a generic nature. This means the same code is supplied by the vendor, to multiple licensees who all run the same application but not necessarily the same version.

When an application is procured by an organisation the type and level of escrow protection should be considered. While this consideration criteria will vary from organisation to organisation there are two core principles that should be adhered too.

• does the application perform a critical business function
• would there be significant financial impact if the application was unavailable

If the answer to these questions is yes then an escrow agreement should be used to minimize the impact of vendor failure.

You may also wish to consider advanced levels of certification testing and these should be discussed with the software escrow provider.

Conclusion

Software Escrow is a very cost effective way of ensuring your business continuity and should be viewed as a very important part of your disaster recovery strategy.

Source code escrow (also referred to as software escrow) is the deposit of software source code with a neutral 3rd party software escrow agent.

How does Source Code Escrow work?

The software licensor securely deposits the application source code with the escrow agent. In the event that a vendor fails to meet the software license agreement or files for bankruptcy the source code can be released by the escrow agent to the licensee.

A source code escrow agreement is a contractual agreement that is drawn up between; the licensor/s, the licensee/s and the escrow agent. The agreement defines the boundaries of the source code escrow. If the terms of the escrow agreement are upheld then the deposited source code will remain safe and secure with the software escrow agent.

Why would I need a Source Code Escrow Agreement?

The advantages of a source code escrow can be viewed from two perspectives; the licensee and the licensor.

Licensee (End-User):

• The source code escrow protects your vital business applications and software.
• It lowers the risk of investing in software that you do not own.
• It is considered an imperative part of your business risk management and business continuity plans.

Licensor (Vendor):

• It adds value to your product and service.
• It reassures your potential customers that mechanisms are in place in the event that something happens.
• The source code is kept securely with a 3^rd party escrow vendor so it prevents the need of handing over your source code to the licensee.

Why use a Source Code Escrow Agent?

The source code escrow agent acts independently from the software licensor and the licensee. The agent will safe-guard the software/source code and will only release it in accordance to the source escrow agreement.

What type of industries use Source Code Escrow Agreements?

A full range of industries can benefit from source code escrow agreements. Quite simply it is any industry that makes use of software either directly or indirectly with their daily operations. Total Escrow Solutions has an extensive history of producing source code escrow agreements for:

• Software Developers
• Software Users
• Local Authorities
• Central Governments
• Blue Light Organisations
• NHS
• Website Developers
• Mobile Application Developers

What types of Source Code Escrow Agreement exist?

Total Escrow Solutions can produce bespoke source code escrow agreements to suit the needs of the licensee and licensor. However, we are the source code escrow specialists in:

• Single licensee agreements – An agreement between the supplier, user and the escrow agent.
• Multi-user agreement – An agreement specialised for the ‘off-the-shelf’ software applications.
• Developer agreement – Designed to protect the technology that you do not own.
• Verification testing – Ensures that the deposited source code is correct and can be built into a working system.
• Enterprise agreements – For organisations that use multiple applications.

What is the cost of a Source Code Escrow agreement?

Total Escrow Solution fee’s table highlights the low cost of a source code agreement.

Contact Total Escrow Solutions to find out more about source code escrow by calling 0845 017 6737 or making an enquiry online by clicking here.

Most organisations in the world use licensed software systems they do not own or control. They use these software systems to enable them to deliver products and services to their clients. In most cases the organisation will be dependent on these software system supplier and without them would most certainly fail. To ensure that an organisation is not compromised by the failure of a software system supplier they can invest in a specialist type of legal agreement, this agreement is called a Software Escrow agreement.

For a relatively small annual fee the user of the licensed system can be confident in the knowledge that if their supplier fails they will not. The Software Escrow agreement provides many benefits;

• Secure storage of source code
• Security of Intellectual Property
• Confidence in supplier relationships
• Assurance of business continuity
• Validation of build and deployment architecture
• Strong customer relationships

Only through the use of Software Escrow agreement can the user of a software system ensure that if their supplier fails they can gain access to the source code, build instructions and most importantly the legal rights to maintain and develop the system to secure their business continuity.

All organisations should consider establishing a Software Escrow agreement for all software systems they do not own.

Many companies contract with software developers to design, build and install a wide range of applications or systems. These applications or systems are crucial to a businesses development and success. The average development cost for an application or system built for an SME organisation is £100,000 and represent a considerable investment in new technology. Through the use of a single user developer software escrow agreement you can protect your investment in new technology, this type of agreement works as follows;

• Company contracts with developer
• Escrow agreement is established between Company, Developer and Escrow Agent.
• Developer deposits all developed code at pre-defined milestones with escrow agent.
• If all goes smoothly agreement becomes single user upon completion.

If things do not go smoothly and;

• Developer goes into administration; liquidation, receivership or development contract breaks down.
• If developer looses key skill programmers and is unable to continue.
• If the application or system development falls behind schedule

Because the developer has been depositing the source code at agreed intervals you have several options if any of the above events occur. You can take the part build code to another developer to continue the project, you can bring the code in house to complete the development project or you can partner with an organisation that will complete the project for you.

There are many examples of firms getting left with a part developed application and no access to the source code or the IP and having to scrap the project and re-think the companies strategy. This scenario can take its toll on companies and may even jeopardise the survival of an organisation.

This type of reliance is very common in todays business world and enables companies to flourish and grow at a faster rate than might have been possible, it enables companies with limited capital to begin trading very quickly.

Imagine for a moment;

• You have a great idea for a business
• You have a team in place to begin running the business
• You need an ERP system to manage the;
  • Stock
  • Production
  • Cash flow
  • Delivery
  • Maintenance
  • Service

If you had to build this ERP system from scratch it would potentially be many years before you could begin trading and the capital investment would be considerable.

In today business world you could source a world class ERP system from a Tier 1 supplier today and begin trading tomorrow.

There is only one way to ensure that the system your business relies on will always be available and that is through the use of software escrow agreement. Only by using software escrow agreement can you be sure your critical technology asset will always be available.

• So 5 years and £450 million later the project fails and the person responsible for the expenditure has been knighted and has moved to the House of Lords.
• The question that stays with me is how did anyone think that spending £450 million on a computer system would ever be recovered through efficiency, it worked out at over £2 million per seat in what is basically a call centre?
• Why does no one seem capable of keeping control of these projects or the suppliers that promise everything and deliver nothing?

Maybe a developer escrow agreement could have managed the risk that is inherent when you rely on a supplier and work to a waterfall development model.

• Unaware of the risks
• Don’t realise that they depend on someone else
• Don’t like to think about other companies success or failure
• Think they can cope without the technology
• Naïve

If any company relies on another company to ensure delivery of services then they should have an escrow agreement to protect the relationship. I think we can safely say that most companies in the world use proprietary software.

If you don’t have an escrow agreement you are taking unnecessary risks and no business can afford to take unnecessary risks. You can of course use open source but this bring its own risks.
Escrow agreements lock away the technology you rely on, and store it with an independent third party. Should a critical event occur to your supplier then you can access their technology to ensure your business continuity.

Escrow agreements are the only way of gaining legal rights to use the IP of another company to maintain your ability to deliver to your clients.