Software · Escrow

Recommend an reliable and affordable software escrow company?

Anonymous

March 7th, 2014

Hello,

One of our prospects is adamant to get a software escrow in place for our on-prem software, but I've found out that IronMountain is pretty expensive (a bit less than $2,000/year per beneficiary/licensee with a standalong agreement).

Does anyone recommend a more affordable and reliable software (source code) escrow company?

Thanks,

Raphael.


Anonymous

March 8th, 2014

Hi Simon and Karl,

Thank you for the advice. I forgot to mention that having the customer pay for the escrow is a pre-requisite he seemed to agree to. However, his cost expectations were much lower than the quotes I got from Iron Mountain and were based on actual fees his company currently pays to... Iron Mountain. I don't understand the discrepancy between what they claim they pay and the quotes I got and I'm afraid that the sizable escrow fees (compared to the license and support costs my company charges) will discourage him from buying from us and will turn him to a competitor (I know we're in a competitive situation, though it looks like we have an edge).

Anyways, I'm surprised there doesn't seem to be significant competition in the escrow market to bring down costs (which look way outsized to me - why does the setup cost $1,500 for instance?) and I thought I'd be proactive and suggest a more affordable service to this prospect.

As far as the agreement itself is concerned, I'm already covered, thanks (my wife is a contract lawyer).

Raphael.

Karl Falconer

March 7th, 2014

Raphael,

I would have your client cover the cost of a software escrow. It is an additional expense that it outside of your standard offering and thus your pricing does not cover it. 

I wouldn't be surprised if they dropped the request. 

Simon Bain CEO SearchYourCloud Inc.

March 8th, 2014

Raphael hi. Just a thought, and I have to be honest I have know idea how practical it is. However your wife may! Could you have your wife draw up a mutual agreement, and then lodge the code in both code (cd) and printed version in a safe depisit box with your bank? This should have a minimal cost, and as long as the agreement was mutual and binding then your customer shoukd be ok with it. Again not sure how practical or acceptable this would be, but to save an order may be worth asking. Simon Sent from Samsung tablet

Anonymous

March 7th, 2014

I obviously meant "a reliable and affordable [...]" in the discussion subject.

Simon Bain CEO SearchYourCloud Inc.

March 7th, 2014

Raphael hi. We had a similar issue. In the end we did use Iron Mountain. But we charged our customer. If this is not an issue you could use a friendly lawyer, who can put into place an agreement for you. Simon Sent from my Windows Phone

Christopher Nguyen Co-Founder & CEO at ADATAO, Inc.

April 8th, 2014

Raphael, you may want to be careful with the terms triggering the escrow clause, and the allowable use of said source code upon that trigger. Many people talk about this event dismissively as something that doesn't matter if your company in this situation would be "dying" anyway. However, your software may have some liquidation/IP value that would be significantly diminished if some third party has complete, unfettered access to use, modify, and/or distribute it.