Your Software Vendor Goes Bankrupt — Now What?

Let’s get straight to the point: If your software vendor goes bankrupt and you haven’t considered the consequences beforehand, you’re already too late. It’s a classic case of locking the stable door after the horse has bolted.

When you start using a software application, the smart move is to make arrangements with your supplier in advance. For example, in your SLA. Such agreements typically include what happens if the relationship ends in a controlled, planned way.

Choose Mustard Before the Meal

But an SLA doesn’t cover everything, especially not if your vendor suddenly goes bankrupt. And that always happens unexpectedly. That’s where it begins: the realization that you need to go one step further to protect your continuity.

That extra step? Reaching out to Escrow4All to set up an escrow arrangement.

Escrow as a Key Instrument

An escrow agreement can be an essential tool for ensuring business continuity if your IT supplier goes bankrupt. It acts as a safeguard for your investments.

At its core, escrow is a legal agreement in which the source code, documentation, and other relevant software materials are deposited with an independent third party.
In the case of SaaS, escrow ensures that you can continue using the application. So, if your IT supplier goes under, you’re not left stranded.

Access to the Source Code

A software escrow agreement also ensures that you have access to the source code of the software developed by your IT supplier. This is crucial because it enables you to continue developing, maintaining, or modifying the software — even if the supplier is no longer available.

With the source code in your possession, you can either take over maintenance internally or engage another IT provider to do it for you. This ensures your business processes can continue without disruption, even if your current IT supplier is no longer able to provide their services.

Transition Period

If you decide to switch to a new IT provider, an escrow agreement can support a smooth transition.
It eliminates the pressure of having to make a rushed move.
In short: make sure to start early.

Want to avoid another case of “too little, too late”?
Need more information or a quick consultation? Get in touch with us.