Oracle, ServiceKey End Gray-Market Dispute

  • Tweet  
  • LinkedIn  
  • Facebook  
  • Google plus  
  • Send to Kindle
  • Send to  

Under a proposed settlement, ServiceKey will stop providing support to Oracle customers and submit to regular checks of its systems to end an alleged gray-market scheme that delivered maintenance to end users not under contract with the software vendor.

Under the terms of a proposed legal settlement, ServiceKey soon will be out of the Oracle Corp. hardware maintenance business, bringing to an end allegations that the Georgia-based solution provider engaged in a gray-market scheme to provide unauthorized support services to companies not under contract with the vendor.

The proposed settlement will result in no monetary damages. However, ServiceKey will destroy all information obtained in supporting Oracle hardware customers, surrender access to Oracle’s customer portal, keep detailed records of support interactions with Oracle and remain subject to audits for the next five years.

Related articles

"The proposed settlement represents significant progress toward an understanding between Oracle and ServiceKey, with respect to ServiceKey's appropriate role in the hardware service support market for Sun/Oracle systems," ServiceKey CEO Angela Vines said in a statement to ComputerWorld.

Oracle initiated the lawsuit in February 2012 after discovering ServiceKey was allegedly using its own support service contract to gain access to information and materials and extend value-add services to customers using Oracle/Sun Microsystems hardware.

ServiceKey, according to reports, does have a valid Oracle support contract for a small amount of equipment.

A separate lawsuit continues against DLT Federal Business Systems Corporation, allegedly a party to the ServiceKey support services. The company has no relation to DLT Solutions, a large federal systems integrator.

Oracle is aggressive with regards to unauthorized access to its intellectual property and encroachment on its services business. It’s sued service provider Rimmi Street for offering unauthorized services, and it won a $306 million lawsuit against rival SAP for pilfering software specifications and support documentation.

Oracle isn’t alone when it comes to vendors going after solution providers that buck formal channels for supporting end users. Cisco Systems Inc., IBM Corp. and others have hunted solution providers that independently offer support contracts.

This aggressiveness is not surprising; hardware revenues and margins continue to fall. Maintenance and support contracts are huge sources of revenue for vendors, as they cover the cost of ongoing patching and future development costs. Such contracts are like insurance -- fulfillment rarely exceeds the support capacity or expense.

The phrase “gray market” with regards to these programs has been called “misapplied,” as services and support methodologies and materials may be developed independently by solution providers. In the ServiceKey case, though, Oracle support for the minor contract was funneled and amplified to a broader set of customers.

The larger question: Is there a legitimate market for support contracts that don’t flow through vendors? Many solution providers develop methodologies and capacities for supporting vendor products. Independent support is contentious between solution providers and vendors, as it denies vendors access to lucrative revenues and insights into customer activity.

Perhaps one of the most famous cases of such a dispute is between Cisco and Multiven, an independent provider of support services for Cisco networking gear. Cisco sued Multiven, a California-based company owned by Peter Alfred-Adekeye, for allegedly hacking its partner portal to obtain support documentation. Multiven, which denied wrongdoing, countersued Cisco for antitrust violations.

Solution providers chaff under the restrictive terms of vendor contracts, but believe they have little choice if they don’t want to risk losing the other pieces of their products and services business.

  • Tweet  
  • LinkedIn  
  • Facebook  
  • Google plus  
  • Send to Kindle
  • Send to  
More on Channel Business
hands-dollars

What you give is what you get: Symantec partner program post-split

Firm's impending split may leave some partners better off, but what about the others?

contract-drafting

RackWare signs up to NetApp partner program

Firm integrating technology with NetApp and IBM

data-quality

Value over volume, RackWare says of expanded channel partner program

Aim is to have the right coverage with close relationships, VP says

divorce-pa

The velvet divorce? Options and disruptions to come from HP split

News that Hewlett-Packard is breaking into two companies continues to reverberate through the channel. While the ultimate impact on HP partners and customers remains unclear, the new entities will have plenty of options for plying their futures

Visitor comments
Add comments
blog comments powered by Disqus
In-depth
hands-dollars

What you give is what you get: Symantec partner program post-split

Firm's impending split may leave some partners better off, but what about the others?

steps55

Time to step up: vendors missing the mark on IoT

A new study by AVG Technologies finds that SMBs and MSPs see tremendous potential in the Internet of Things as a driver of business growth – provided IT vendors and solution providers step up their game

wael-aggan-cloudmask

Vendor Q&A Series: Wael Aggan, CloudMask

The latest vendor executive to sit in the Channelnomics hotseat is Wael Aggan, CEO of CloudMask

healthy-heart

Microsoft getting healthy, thanks to consumers

Is it time to take the software giant off the watch list of tech companies in distress, at least on the consumer side, asks Larry Walsh