Source Code Escrow

What Does Source Code Escrow Mean?

Source code escrow is a type of "middleman agreement" between software providers and customers to ensure that software applications and platforms are maintained regardless of any changes that may happen to the vendor. It involves the vendor sharing the source code with an escrow agent.

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Techopedia Explains Source Code Escrow

The need for source code escrow arose because customers wanted ironclad guarantees that software services would be maintained, but vendors did not want to hand over copies of the software source code to the customers for obvious reasons, including proprietary development and intellectual property considerations. The use of a source code escrow system is a handy compromise and addresses the vendor’s need to make sure that the source code is not going out to the public.

From the customers’ perspective, source code escrow is a kind of safeguard for their investment in a software program, the same way that a performance bond or other surety bond is a provision for investment in special projects. Source code escrow protects both parties and helps with overall change management, for example, making provisions in case the vendor goes bankrupt.

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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.