Yes – we’ve seen situations where software escrow has been oversold, especially as awareness of it has grown in the software market.
For instance, software escrow may not be appropriate for:
Low value software where it would be easy and cheap to move to a similar equivalent package. The cost of simply switching suppliers will probably be smaller than trying to work with the source code itself.
Hosted software, including application service providers (ASPs). When software is provided as a service, it can be very complicated to bring that software in-house, because you have to switch from a hosted system to a local system.
This can involve a significant investment in infrastructure (like new computer equipment) and usually requires changes to the software itself.
The access fees for hosted software are generally lower than the licence fees you pay for local software, so the cost of switching suppliers may also be lower.
Complex systems using source code from a range of third parties. For instance, if one software company (the ‘prime contractor’) takes responsibility for developing, implementing, and managing a software solution that includes a number of third party software applications, those third parties are unlikely to want to place their code in escrow.
There is little benefit to the end user unless all parties agree to use escrow, so in this situation the costs will probably outweigh the potential benefits.