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'The uniqueness of Escrow Europe, without a doubt, is the completeness of the services provided at the highest quality - especially the extended verification services, tailor-fit legal contracts, and active follow-up for updates and new releases - all provided by a local representative to the doorstep of your business. I am very proud and excited to join this professional and supportive organisation spread throughout Europe and represent them in Israel.'
Ronen Slutzky, managing director, Escrow Europe Israel Ltd

Sarbanes-Oxley, risks, controls, compliance. These are some of the most common terms being used in many boardrooms these days. They join the old favourites of value and performance. The landscape of corporate governance has changed immensely since the emergence of recent corporate failures and resulting legislation and regulations. The sheer volume of new requirements, coupled with responsibilities placed by legislation and stakeholders, is overwhelming C-level executives, board members and audit committees. While it is easier said than done to consistently deliver ROI on IT investments, that is the challenge that faces the person in the CIO's hot seat. And, it is the responsibility of the CEO to support his or her CIO to meet that challenge.'
KPMG, Johannesburg

'Today, company secretaries and compliance officers all need to be able to 'tick off' good governance, as well as contain basic risk exposure such as reliance on the use of intellectual property that they do not own. By entering into an agreement with Escrow Europe, we are demonstrating our commitment to assisting both existing and potential customers meet their corporate governance requirements as well as streamlining the process for them.'
Steve Symes, managing director, Genasys, South Africa


Software source code risk increases in line with M&A


 

Publication: IRMSA website
Publication Date: 22 February 2007
Last Known URL: http://www.irmsa.org.za/library/Escrow.doc

 


 

Publication: IT Online
Publication Date: 05 February 2007
Last Known URL: http://www.it-online.co.za/content/view/12778/


Fear of vendor bankruptcy is no longer the biggest driver in the software escrow market; potential mergers and acquisitions activity within the IT vendor community is the biggest cause for concern.

 

This is the opinion of Escrow Europe director, Andrew Stekhoven. Escrow Europe is one of the leading providers of active escrow services worldwide securing, verifying, updating and retaining deposits of software source code and associated documentation on behalf of users of both licensed and bespoke software products.

 

Stekhoven explained the switch: “For several years during and after the global IT and software development boom, a fair number of users worldwide insisted on protecting the source code used by their software vendors because they were concerned that the software would be ‘orphaned’ if the vendor’s business failed and it was forced to declare bankruptcy.

 

“They realised that, in the case of an ‘orphan event’, the escrow agent would release the source code to them and they would be able to use it to maintain their systems and continue trading.

 

“Bankruptcy was a very real threat during those boom times because many of the vendors – while very proficient at designing and developing software – had few business skills, and seldom knew how to manage their rapid growth. The failure rate was high.

“Today, however, the IT vendor environment is relatively stable with large and small IT houses having survived up until now because they have very good software products, and solid, viable businesses.

 

“But, the pendulum has swung so that the threat is not that the vendor could go bankrupt but that it could be acquired by a competitor that has absolutely no intention of continuing to support two competing software products.

 

“Instead, the purchasing company will select to hitch its wagon to just one of the products and will abandon the other, forcing its users to disregard their prior investment in their systems and cross-over to a new – and possibly not wanted – technology.

“Just imagine. Your company selected software A over software B after a long evaluation process because you believed A best met your business objectives. Company B then acquires company A and simply advises you that it will cease to sell and support software A. Or it will support software A but only at a much-hiked maintenance fee.

 

“If you had insisted on an active escrow agreement between you and company A, the source code for software A could be released to you by the escrow agent and you would be able to continue trading without succumbing to company B’s demands, either maintaining your systems or retiring them in a planned and responsible way.

 

“In our experience, the threat of an event that would trigger the release of the source code to the user community is such that the vendor will immediately return to the negotiating table. On this basis, the end-user at least has a negotiating position and can politely say to the vendor ‘if you don’t remove your gun from my head, I will file for a release of the source code.’”

 

Escrow Europe, a corporate member of the Institute, is one of the leading providers of active escrow services worldwide securing, verifying, updating and retaining deposits of software source code and associated documentation on behalf of users of both licensed and bespoke software products.  

 

Escrow Europe are Corporate members of the Institute of Risk Management

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