What is Software Escrow? — UK Software Development Guide

4 min readJune 2025ClickMasters Technical TeamReviewed by James Whitmore, CTO
what is software escrow

Direct Answer

Software escrow (also called source code escrow) is an arrangement where a third-party agent holds the source code of a software product, making it available to the licensee (the software's customer) if a defined release event occurs — typically the vendor becoming insolvent, failing to maintain the software, or ceasing to trade.

Software-escrow in the UK

Software escrow is common in UK enterprise software procurement and regulated-sector software supply. Key UK contexts: NHS procurement often requires escrow for clinical software (protecting NHS organisations from vendor failure); FCA-regulated firms must manage operational resilience including key supplier concentration risk (PS21/3) — escrow supports this; G-Cloud contracts for government software may require escrow for critical systems; and large enterprise software procurement typically requires escrow as a standard contract term. ClickMasters supports escrow arrangements — source code can be deposited with UK escrow providers (NCC Group, PRAXIS) at defined intervals.

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