If your business relies on documents and data, Escrow is the best security solution. It is used by numerous companies as a neutral party that stores data and documents. Let’s find out more about the service as well as the advantages of using it.
A brief overview
Escrow arrangement is a case when several parties come together and the service provider deposits a software source code or other confidential data with the escrow agent. The latter is a neutral third party.
As soon as the documents are deposited, the escrow agent may hand them over to the customer. This happens only within the conditions the parties agreed upon beforehand. There are several kinds of objects that can be deposited with escrow services:
- The software sources codes;
- Development documents;
- System documents;
- Other documents and relevant data needed to be kept safe.
What kinds of institutions use escrow services?
Escrow software is often used by banking, pharmaceutical, insurance companies. Federal, cantonal, and municipal institutions implement the software.
The products and the associated escrow agreements must be structured in cooperation with specialized IT-lawyers and have proved their worth in legal challenges to release procedures.
Objects that are placed in escrow are secured by all the measures following the EN3 European standard safety specifications.
Swiss Escrow Services:
The advantages of escrow
- The customer is safe from situations when the service provider ceases to operate;
- Escrow has access to the source code, data, and files in case the service provider ceases to operate;
- Escrow software secures seamless maintenance and development;
- It protects investments and reduces business risk;
- It decreases the dependency on the service provider;
- The manufacturer also gets more trust from the customers due to the neutral storage of the source code;
- Escrow protects intellectual property.
As you see, both customers and manufacturers greatly benefit from using escrow services. What’s more, there are several benefits from system integrators as well. They include the implementation of the IT solution that is not endangered by the non-performance of the service provider.
Other things one should know about escrow services
Let’s take a look at one example. For instance, software source code or other documents are trade secrets of the service provider. Usually, a customer is not allowed to access them.
However, there are cases when the customers may need to access the code or documents to maintain and develop the software they paid for.
When the service provider fails to fulfill the commitments for some reason (like bankruptcy, closing down, etc.), the information can be reached. However, this is only the case when it was deposited with Escrow.
Bottom line
Escrow services are a kind of safekeeping for the source code, data, and files. Several companies offer such safe and neutral storage as well as the release of the deposited objects under certain circumstances. The latter may include the non-performance by a contracting party, inadequate performance of the contractual provisions, and other situations the party agreed on beforehand.