Canary Wharf Case Study

NCC Group constructs sound escrow for Canary Wharf.

Canary Wharf Group is a distinctive, integrated property development focused exclusively on Grade-A office space and high-quality retail facilities at the Canary Wharf estate, a major development which is part of the Central London office market.

The Group owns and manages the estate and is responsible for the development and construction on the Estate. In the last ten years, the Group has constructed more new office space in London than any other property group.

Challenge

To cope with its rapidly expanding development, Canary Wharf has invested time and money in developing IT systems to assist with the organisation's construction and development plans.

This includes Hummingbird, a document management system designed by Bovis Lendlease which handles the extensive paperwork process that is involved with any building project from initial designs to planning permission right through to site instructions.

The system distributes the documents to the relevant parties for review and approval, saving the company huge amounts of time and resource.

Businesses relying on software companies to develop and/or supply and maintain their vital systems traditionally call on their suppliers when a 'software emergency' arises. If the supplier is unable or can no longer meet its contractual obligations to supply, fix or maintain these systems, the business is often left with the problem of accessing software source codes. 

Solution

Following a review of the marketplace, Canary Wharf Group partnered with the world’s largest software escrow provider, NCC Group for a protection solution.

NCC Group’s escrow solutions provide a smart, simple way of protecting both supplier and end-user, by covering every business critical application or third party supplied software-as-a-service with a software escrow solution.

Under the terms of its straightforward software escrow agreements, NCC Group holds a copy of the application source code which Canary Wharf Group depends upon but does not own. The source code is deposited along with all the information, scripts and codes needed to use and maintain the software, by the supplier.

If a ‘trigger event’ should occur that would render a supplier incapable of fulfilling its contractual obligations. This would then enable Canary Wharf Group to maintain and support the application in-house or appoint a qualified contractor to do so.

Mike Beasley, Construction Manager, Canary Wharf Group commented: "We decided to place these applications into escrow as they are vital to our business. Without these applications, the cost, both in terms of lost time and development activity would have a major financial impact on our business. By placing the applications in escrow we will be able to access the source code regardless of what happens to our software suppliers. With the kind of potential losses in question, we can't afford to take chances."

The company also placed three IT systems, linked to Hummingbird, into escrow. These systems deal with more defined functions such as electronic distribution of the document system, software to read multiple file formats and an invoice distribution and tracking system, all integral to Canary Wharf Group.

Results

The decision to place the applications in escrow paid dividends, as two of the three supporting packages of Hummingbird were required to be released from escrow.

Beasley continued: "The process went very smoothly. We provided proof that the software company had gone into liquidation and that we were the licensee. After that my NCC Group account manager sent me instructions on how to obtain the source code, which was very straightforward."

“Businesses need to look to establish an escrow agreement up-front to eliminate the chance of the software company refusing to enter into an agreement later on in the relationship,” commented Jon Leigh, Director of Escrow Solutions, NCC Group. “This is quite easy to do as in many cases there is a section in the initial contract drawn up by the software supplier that gives the licensee the option of placing the application in an escrow agreement. Once the agreement is signed, the software company needs to deposit the code with the escrow agent within thirty days of the agreement being signed.”