Re: Will your chosen CMS vendor go bust?

Escrow is a bad choice in my opinion.

Escrow is more relevant for custom development. Having product code in
escrow is of little use to anyone - it is simply a gesture of risk
management that provides very little practical benefit. If a product dies,
the customer is best placed to get their content out and go through the pain
of migrating to a growing and better performing platform. It is unlikely a
customer can take the code and continue to meet their own needs. It is also
unlikely that they will be able to find suitable development resources for
ensuring their 'self-managed' solution continues to be viable. Any company
that wants to invest so heavily in 'being their own mechanic' should have
considered Open Source, where the Escrow idea is meaningless.

For proprietary relationships, there is more at stake than the code. If your
partner (vendor) goes belly-up, you loose support, product vibrancy,
shared-development experience, and a range of intangibles that simple access
to the code will not address. From the vendor's point of view, having the
code in Escrow also damages the sale of business IP that may return
something to the stakeholders and set up an arrangement where another vendor
can continue to support legacy installations or assist them with transition.

Talking to IP Lawyers, it is clear that code held in escrow is very rarely
accessed and if it is, it seldom leads to positive outcomes (simply more
good money after bad). From the point of view of a vendor, none of the
majors would put their product code in Escrow, so if you make Escrow
arrangements a requirement, you are likely to get the type of product you
deserve and pay a premium for the arrangement.

Escrow is what your lawyers will suggest, not what prudent business practice
would suggest. James, good to see your post and glad you have stirred up
some conversation. No doubt others will disagree with this one.

Cheers,

David Warwick
Komodo CMS



On 6/10/05 10:07 AM, "James Robertson" <[email protected]> wrote:

> At 09:29 PM 5/10/2005, Paul Duthoit wrote:
> 
>> Hi all
>> 
>> This is an obvious and recognised risk. A really good solution for all
>> concerned is to place the source code in escrow under a mutually agreed
>> Escrow Agreement. Read about it here:
> 
> Yes, this is a good solution. I had meant to include it in my article,
> but ran out of space.
> 
> Cheers,
> James
> -------------------------
> James Robertson, Managing Director
> Step Two Designs
> 
> Email: [email protected]
> Web: www.steptwo.com.au
> Phone: +61 2 9319 7901
> 
> 
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