Escrow

Escrow in tech refers to a legal arrangement where a third party holds valuable digital assets, such as software source code, cryptographic keys, or sensitive data, on behalf of two other parties involved in a transaction or agreement. The purpose of tech escrow is to ensure that the assets are securely managed and only released under predetermined conditions, typically to protect the interests of a business or client if a software provider fails to meet its obligations.

For example, in software escrow, the source code of proprietary software is deposited with an escrow agent by the software vendor. This protects the licensee (the client) by ensuring that they can access and maintain the software if the vendor goes out of business, discontinues support, or fails to fulfill contractual terms. Software escrow is particularly important for companies relying on mission-critical applications, as it provides a safeguard against business disruptions.

Tech escrow services play a crucial role in mitigating risk, fostering trust, and ensuring business continuity in complex technology agreements. It is commonly used in industries where long-term access to digital assets is essential.