Big Data, Internet 4.0, automated manufacturing processes, analysis of customer data, short product life cycles and innovation cycles are all trends which are causing business success to depend increasingly on bespoke software products and their regular updates. But what happens if software manufacturers are sold, go out of business or discontinue further development of their software in end-of-life situations? How can businesses continue to use and advance their expensive programs in these situations? The solution for closing this gap lies in escrow agreements. Here, both parties – i.e. software users (licensees) and software manufacturers (licensors) – agree on an impartial third party – TÜV SÜD – to store the software source code.
Generally, a software escrow agreement involves three parties: the software manufacturer such as a system vendor, the software user such as a medium-sized machine manufacturer and its digital enterprise resource planning (ERP) system, and last but not least, TÜV SÜD as the escrow agent, acting as a neutral intermediary.
In this role, TÜV SÜD securely stores the software source code during the contractual period and makes it available to the user under contractually stipulated terms, for example in case of bankruptcy. The user can thus continue the use, maintenance and updating of important software programs.
Software escrow procedures offer significant benefits for both contractual parties: Software users can rest assured that the source code has been securely deposited with TÜV SÜD. Software manufacturers use the services of an internationally renowned intermediary for reliable documentation of their intellectual property, thereby offering their customers clear security advantages.
In the current legal situation, too, escrow agreements offer major advantages. Under German law, source codes form part of bankruptcy assets and are thus not available to software users free of charge. However, depositing source code with an independent third party is recommended not only for legal reasons but also out of very practical considerations. The escrow agent subjects the data carrier it receives to incoming tests carried out by a software expert, and offers further optional tests. These tests ensure that all the necessary data stored on the data carrier is complete, up to date and free from faults.
As a third-party service provider with extensive experience in fields including IT, TÜV SÜD's Software Escrow Services comprise a bundle of highly complex activities. These activities extend from incoming tests for completeness and freedom from viruses and malware to special bespoke tests according to individual requirements. To maintain the fault-free condition of the software in updates and further releases, technical documentation and release notes to the escrow agent also form part of the agreement. After all, even where the complete source code is available, clean processing is only possible if the source code does not first have to be analysed in a complex code review.
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