The incredible pace at which our digital technology develops has radically changed modern business practices, ensuring that anyone who doesn’t look to the future and how technology may change will very soon be left behind. It has also altered the way in which we approach risk management and assessment. While the introduction of vast and incredibly complex computing algorithms to work out levels of risk exposure has been a major step forward in terms of risk assessment, we are also seeing new and clever ways of reducing, or removing, the risk of investment in small software developers.
This has largely taken place through the medium of escrow for software. Much like the escrow accounts that have been used for centuries in financial transactions, escrow software agreements insulate organisations from a certain amount of risk when investing in a product. In the case of software, problems traditionally occur when a developer goes out of business or cannot sustain support for a specific piece of software. This often leads to companies finding themselves in the deeply troubling situation whereby a vital piece of software no longer receives the support and development it requires to stay relevant.
Keeping the risk at a minimum
Fortunately, escrow technology reduces these risks by entrusting the source code for software to a third party, who will ensure its safety until the agreement expires or the developer encounters financial problems and releases it to a business or a number of businesses. If this occurs, companies are then able to take on the task of support and development themselves or contract it out to other developers. This helps to prevent businesses from making risky investments and gives them security and peace of mind when it comes to concerns over the future development of their technology.
While you will never completely remove risk from the business world, there are increasingly clever ways to minimise the amount of risk that companies expose themselves to. In economies where profit increasingly depends on the ability of a business to keep up with new developments in software and technology, escrow agreements have become an important aspect of this process.