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From: Gerald Marisch <gm@xxxxxxxxxxxxx>
Subject: Re: LEARNING. Let's kill all the lawyers ...
quite legal, most of this 'stiffing'
BBC report :-
<UK companies are being forced into paying out tens of
thousands of pounds in a software scam known as
stiffing. The term is used for the sharp practices of
computer companies who overcharge their business
customers.
Unscrupulous software suppliers have
been taking advantage of software
licence agreements to trick
customers out of anything from
£10,000 to £100,000 plus.
There is nothing illegal about it - some
of the world's largest software companies have been
doing it to some of the biggest companies in the world.
Unexpected bills
IT departments are landed with huge and entirely
unforeseen bills from the suppliers of office software for
allegedly infringing the small print in software licence
agreements. Users are told that they must stump up the
cash or forfeit their right to use crucial software.
The problem lies with 'third-party software' or software
which has been sold on to companies who did not write
it. It is further licensed - and not sold - to users under
very specific terms.
When the software supplier
alleges that the customer is
getting use of software above
and beyond the terms under
which it was licensed, they
have been stiffed.
"If it doesn't say in the
licence you can do it, then
you probably can't" explained
managing editor of Computer
Weekly magazine, Karl
Schneider.
The bills may start arriving
when a company restructures or is involved in a merger.
Geoff Petherick, chief executive of UK Computer
Measurement Group (UKCMG) said that he has heard of
one company being charged an incredible £1.6m "just for
changing names."
But it can also fall prey for something as simple as
loading its software onto new hardware, or allowing
contractors access to the software.
'Stamp Out Stiffing'
Computer Weekly has been leading the 'Stamp Out
Stiffing' campaign to draw attention to the practice. Karl
Schneider says that nearly a third of businesses have
been stiffed by a software supplier. A Computer Weekly
survey shows how much money stiffed companies have
been losing:
59% lost less than £10,000
20% lost between £10,000 and £100,000
1% lost between £101,000 and £250,000
2% were stiffed for an incredible £250,000-plus
Geoff Petherick attributes the scams in part to bad
management, but believes companies are being stung
for not examining software licence agreements
thoroughly enough.
"If you badly need that software, frequently a licence is
signed very quickly. It may be particular software that
you need for which that is the only supplier on the
market," he said.
In many cases licences have been drawn up several
years ago and incorporate contracts entirely
inappropriate for today's marketplace.
Those that go to a new software
supplier as a result of stiffing attempts
can expect to incur heavy costs -
some £8m in the case of one major
company according to Karl
Schneider.
John Lister, IT director of the supermarket chain Asda,
explained how some software suppliers have been
making money for fixing the Millennium bug in existing
software.
"They tell you that they're not going to give you a
millennium-compliant version, and then offer you a new
product running into several hundreds of thousands of
pounds." This is despite the company having an existing
contract to maintain software and to ensure that it is
bug-free.
Mr Petherick, along with IT industry parliamentary lobby
group Eurim, has called a special meeting next month to
discuss the problem. In attendance will be
representatives from the DTI and Cabinet Office. An
investigation by the Office of Fair Trading (OFT) may also
be in the offing.>
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