Don't hyperventilate, it's just source code escrow

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Blog by: Angelia Miller, Account Executive

The phone rings and it’s a software developer in a full blown panic stricken voice. His client has just asked him to enter into a source code agreement. Visions of sending this poor soul a brown paper lunch bag to breathe deeply into immediately run through my head. I start my conversions off by saying “hey, it’s going to be just fine and let me tell you the reasons why. . . ”

If your client is asking you to store your source code, it’s a buying signal that they want to purchase your software. This is a good thing!

They simply don’t want to be left begging for their job back, if you fail to facilitate your product(s) or worst case scenario: go out of business. This is a way for you to show you believe in your company and will be around to service the product(s) you just asked them to purchase. You say "oh, yes it is" and I say "no, it’s not and here’s why." You plan to offer them best class of service and have no desire to go out of business any time soon. So breathe deeply and have bigger fish to fry.

Since this request is new to you, your main concern now should be who to engage to store your source code. Are you kicking tires looking for the cheapest prices? If so, you better grab that brown paper bag and start that breathing treatment immediately.

Cheapest will not get you there in the world of escrow source code providers. You are not shopping for a gallon of whole milk where there may be a slight difference in taste or process of manufacturing. You’re looking for reputable IP technology escrow company to store your greatest company asset.

Source code escrow is a non-regulated industry. Just because someone slaps a magnetic sign on their car door that touts they are the best-biggest-greatest doesn’t always make it so. Ever heard the saying “you can put lipstick on a pig; however, at the end of the day you still have a pig?” Do your research and question your providers till they scream "Uncle!" You want to trust the company you hire to offer you services that are reliable and will respond to your needs.

The tier one provider is in business to offer you the level of service you EXPECT. The tier one provider understands all your concerns and will welcome your questions. What are the questions you ask yourself? Here are just a few that will lead you in the path of making an education decision.

• Where is their office located?
• Ask for very specific details of their media vault storage. How is their media vault constructed?
• Should you need to gain access to your source code what is their protocol? Some escrow companies operate from their homes with an employee count as small as 3. If they don’t have an office or trained staff chances are your source code is getting stored in their file cabinet with a P-touch label on a Ziplock bag. You’ll want to continue your search.
• Do they offer industry specific Professional Liability insurance for client protection? 
• Can you download your source code deposit by using a secured FTP credential system that has been set up by your provider to insure safe and secure transfer? Or do you have to head out to the local shipper and pay to package and ship your source code?
• Does your escrow agent have agreements that allow for modifications? Some clients have very specific requirements that may need to be added into an agent’s standard agreement. You and your attorney may need to customize the agreement to suit your specific situation. Can your agent allow for this type of request?
• Do they have quick turnaround for contract reviews and executions?
• Do they have experienced escrow representatives to assist with contracts?

If you have answered "no" to any of the few questions above you will need to continue your search of providers. Do some CSI work on these providers and go with a well-known tier one provider as in: technology industry known (not website stated "tier one provider"). And, if you’re still uncertain ask a leading IP attorney. They’ll certainly be able to refer you.

See, the client asking you to store your source code wasn’t that bad - it was a buying signal. Smile and say, “sure I’ll be happy to start the process of finding us a reputable tier one provider”. In the end, just remember the old sayings “you get what you pay for” and a educated consumer is the best kind of consumer.”