What is source code escrow?
Source code escrow is an arrangement where a software vendor deposits its source code, build instructions and related materials with a neutral escrow agent, to be released to the customer only on defined trigger events, typically the vendor’s insolvency, discontinued support or material breach. It answers the customer’s core dependency question: what happens to our critical system if the vendor disappears?
How source code escrow works in practice
Three elements decide whether the arrangement is worth its fee. First, deposit quality: the escrowed material must actually build and run, which is why serious agreements include verification services, from file listing checks to full build tests. Second, update discipline: an escrow of last year’s version protects last year’s system, so deposits should track releases contractually. Third, release triggers and process: insolvency is easy to draft, “inadequate support” is not; defining triggers objectively and setting a fast objection procedure prevents the escrow from becoming litigation. The licence granted on release matters too: the customer needs rights to maintain and modify, not just read.
Source code escrow in Turkish practice
Turkish enterprises and public-sector buyers increasingly require escrow in critical software procurement, using international escrow agents or bank-supported structures; there is no dedicated Turkish escrow-agent regime, so the three-party contract carries the load. For SaaS the classic escrow protects less, because running code needs infrastructure, data and deployment knowledge; modern agreements therefore extend to deployment scripts, container images and data export commitments, or shift entirely to continuity arrangements. Escrow duties also appear in vendor contracts we negotiate for scale-ups selling to banks and telecoms in Türkiye, where the customer’s regulator expects exit plans.
When does a customer actually need source code escrow?
When the software is business-critical, the vendor is small relative to the dependency, and no realistic substitute exists on short notice. For commodity tools the fee rarely pays for the protection.
Does source code escrow work for SaaS?
Only if extended: code alone will not resurrect a hosted service. Effective SaaS continuity packages add infrastructure documentation, deployment automation, data export and sometimes a step-in hosting arrangement.
What should the release licence include?
The right to use, maintain, correct and modify the code for the customer’s internal purposes, plus access to dependencies and build documentation. A release that grants a read-only look at the repository protects nobody.
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