Technology Escrow: I Get It!

Tweet

 

Blog by: Susan Johnston, Account Specialist

I was a technology neophyte. In the beginning I knew how to turn on my computer; how to withdraw money from an ATM; how to set the timer for my microwave. I knew “someone” wrote a “program” to enable me to do these things. I eventually learned a more modern term for “program” was software. Additionally, I learned most things modern are considered technology, meaning not by hand. Next, I realized technology was run by software and software was available because of technology. It was pretty overwhelming. As I progressed through my timeline of technology discovery I learned of professionals like Chief Information Officer, Vice President of IT, IP attorneys, Software Engineers – they developed, used, managed all of these modern tools of everyday life. It all started to make sense and became part of my everyday vernacular.

My most recent discovery in the overwhelming realm of technology was the existence of technology escrow. I was amazed such a service existed, and yet, it made perfect sense. As a former banker I was well acquainted with the term escrow; i.e., per a formal agreement called the loan agreement, a neutral party, the mortgage servicer, holds cash for a future purpose to protect the interest of two other interested parties, the loan holder and the property owner. The concept is very simple and straightforward – as long as payments are made the mortgage holder knows its investment, the property, is protected – it’s informal insurance against cancelled policies or delinquent taxes.

Technology escrow is no different. The concept is equally simple and straightforward. It just sounds complicated because of the word technology (or maybe that’s just me). The developer deposits its technology, usually in the form of source code, with a neutral third party to protect the interest of another party, the end-user. The escrow arrangement is the result of a formal agreement like a licensing contract. The escrow deposit materials are stored in a secure media vault as informal insurance for two reasons: (1) the developer’s intellectual property (software) is not compromised; and (2) the end user has the assurance their software can be supported and /or replicated from the source code for business continuity. Technology escrow agreements simply give each party peace-of-mind during the entire software licensing process - Simple.

While my journey is nowhere close to being over, my progress through the technology timeline has picked up speed and now has a life of its own; I am no longer a neophyte. Working with the myriad of technology escrow arrangements has given me a deep respect for all the parties we protect, service and counsel. I am well-schooled in the vocabulary of my “new” world – FTP, 2 or 3 party agreement, gigabytes, executables, build documentation, etc. I can help you encrypt, decrypt or zip your files. As a banker, I worked diligently for my customers to gain their confidence and protect their assets. Ironically, I’m still doing the job I love – except, my tools are .com, .dat, or .net – no more dollar signs. I’ve come a long way, baby.