Typical Set Up And Ongoing Costs Of Software Escrow Services

If you are a business owner who is looking to create and develop software unique to your business, there is no doubt that you will need to invest in Software Escrow services. We understand that start up fees can be expensive and investing in additional services may not be at the top of your priority list right now, but trust us, we know the importance of protecting your business critical software right from the word go.

Typical Set Up And Ongoing Costs Of Software Escrow Services

So what is the damage you may ask? Software Escrow agreements vary massively in price due to the endless permutations of service available. An agreement can be set up to offer the necessary level of cover to suit your business and your budget, however the old adage ‘you get what you pay for’ may be ringing in your ears if you are unfortunate enough to suffer a software malfunction with minimal cover in place. There is often some confusion as to who should cover the costs of Software Escrow services, as they can hugely benefit both the business, the investor and the end client, however it is usually assumed that the business owner will foot the bill.

The Software Escrow provider will request payment of two separate fees, the first being the set-up fee and the second being the annual fee. The set-up fee is paid to cover the initial costs of arranging the Software Escrow Agreement. This can be anything between £500 – £1500 depending on the level of cover you are looking for. The annual fee is then negotiated between the licensee of the software and the licensor to cover the ongoing costs of protecting and developing this Software Escrow to meet the needs of the evolving software. This is usually less than the start-up fee, but can still extend from £300-£1000.

In addition to the fees paid, the software escrow agent will need to retain information such as the business critical software source code, any specific build instructions or programming data, or any other information that may be deemed necessary to understand, maintain and develop the software in the future. You will also need to take in to consideration that there may be additional media storage fees, release fees or even administration fees for reviewing your software escrow agreement details further down the line.

Software Escrow fees can vary between providers, some will have no set up fees, some will have no storage fees, and others may even offer both incentives. Fees can be paid directly to the Software Escrow provider right from the outset, or they can be factored into the Software Developers fees at their discretion. Whichever software escrow provider you choose, make sure that you shop around to find the right deal for your business needs and budget.

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