Does Your Vendor Issue Gag Orders?

Presto Vivace writes to tell us that CIO has an interesting article about customer "gag orders" that some ERP vendors are trying to impose contractually. "The effect: customers will be prevented from working with peers and others in the software company's "ecosystem" to help with technical issues or compare pricing options. 'In addition,' Wang adds, 'the customer now lacks the proper checks and balances in pressuring a vendor to deliver on promised capabilities or address severe security issues, and cannot go to the media as a last resort, if needed.'" What other questionable practices (and potential solutions) have others had to work with?

Comments

All we need now is a homeland security tie-in

[swb]

Since ERP is critical to many organizations, all we need now is a homeland security tie-in and anyone who complains about how shitty their ERP package is gets hauled off for interrogation.

Don't laugh, I'm only about 3% joking about this.

Re:All we need now is a homeland security tie-in

[ShieldW0lf]

If you're a CIO, and you sign something like this, you should lose your job.

Re:All we need now is a homeland security tie-in

[darth dickinson]

There's some cognitive dissonance between your comment and your sig.

Re:All we need now is a homeland security tie-in

[icebike]

ERP - Today's shibboleth for software nobody needs obfuscated by an acronym nobody understands.

Does this mean the CRM and HRM rage is over?

Re:All we need now is a homeland security tie-in

[Lumpy]

Almost ALL Microsoft partners sign this.

So the CIO's of most american comapnies need to be fired.

READ the contract for being a Microsoft partner, it's full of that kind of language.

Re:All we need now is a homeland security tie-in

[rtb61]

I used to get weird contacts with all sorts of idiotic conditions. Best way to handle them, is to put the pressure back on them. Negotiate everything else and leave those until the final second, when the vendors are counting the money in their head and, then take out a large felt pen put a solid line through the conditions your don't like and initial each line with a pen and see if the salesman and in turn the sales manager can walk away from the sale and the commission.

Always remember that the sales staff are fighting to get every cent they can out of their 'own' company, any lost sale is personally bad for them and any future problems with the contract, months or years down track is 'somebody else's problem'. Other interesting things are, give an opportunity to their sales manager to demonstrate how much better they are at negotiating with the customer than the salesmen, even though they give you everything you want, they are still getting the sale when the salesmen failed and, of course simply call their bluff and see if they are truly willing to sue the customer in front of every other potential customer.

Re:All we need now is a homeland security tie-in

[cbiltcliffe]

So the CIO's of most american comapnies need to be fired.

Yeah....now you're getting it....

Let them sue

[Rinisari]

Let them sue you and let them watch gag orders get thrown out as unconscionable.

Right?

Re:Let them sue

[Anonymous Coward]

Maybe they'll be like the credit card companies and the stupid card-charge rules. You can't transfer the charge directly to the customer, offer discounts for cash/check/etc, or have a minimum purchase.

The CC companies are smart on this one, so far, I've not heard of them litigating against an offender. Since their end probably wouldn't hold up, that's about the only way the contract would be honored by anyone.

I hope the companies with these gag orders won't be that smart.

Re:Let them sue

[erroneus]

http://acronyms.thefreedictionary.com/CLM

Which of these meanings of "CLM" did you mean? I presume career limiting move, but please don't do this to readers... making them look up CLM when all you need to do is write a few more characters to make your meaning clear?

Re:Let them sue

[phantomlord]

Buying that candy bar with your credit card likely cost the merchant money. There's a base transaction fee (75 cents at the place I managed), a purchase percentage fee (Master/Visa was 2%, Discover 3% and AmEx 5%) that they keep, a card rejection fee (swipe an expired card and you just cost them another 25 cents to tell you it was expired), etc.

So, at best, your $1 candy bar cost the merchant 77-80 cents in just transaction fees, in addition to the 50 cents or so they paid to actually purchase the bar for you to buy... In other words, he just lose about 30 cents to sell it to you... In addition to that, there are fees just to check your balance for the day, fees to request a payment from your processor, etc. Debit cards are slightly cheaper to process, but overall, the break even point for the restaurant I used to manage was about $5 per transaction. Guess what we set the minimum transaction at?

We only started taking cards because so many people don't carry cash these days, so we were turning customers away. Most are quite understanding about the minimum transaction once we explain why we have it. We do make exceptions for regulars or if someone just bought $30 worth of food and forgot to order some fries or something. You might not like it, however, we can't stay in business long if we're losing money on every transaction, so where are you going to buy your candy bar from then, your high horse?

Re:Let them sue

[Anonymous Coward]

Last I saw, Mastercard had a requirement for merchants that they not set a minimum transaction amount. If a merchant was caught doing this, Mastercard would terminate their business dealings with them.

Re:Let them sue

[nwf]

Wow, the place you worked was being ripped off. We pay much less than that per transaction and nothing if the card is rejected for any reason.

Re:Let them sue

[jjeffers]

We pay 3% flat rate across the board. No transaction fees. I've received a lot of processing fee quotes and never once have I seen one with rates like that.

Re:Let them sue

[AmonTheMetalhead]

Cool, i've seen profitmargins lower than 3%! Seriously, why creditcards are so popular on your side of the pond is beyond me, the only added value of a creditcard is to the company dispatching them. The dealers get sacked, the users get sacked & the fat cats get fatter.

Why would any one?

[olddotter]

Why would any major company agree to such arrangements?

Of course such insane arrangements with respect to investments lead to a portion of the financial meltdown.

Re:Why would any one?

[Anonymous Coward]

Simple. It probably didn't HAVE such a license back when they first went with the software. But through upgrades, license terms change.

They almost got us that way at the library. The company was EOF'ing the version we used of the card catalog system. The new version (besides being a LOT of money) had a license with terms similar to this.

Long story, short, we use an open source KOHA software. It has its warts (though less than you might think considering how "leading edge" we are in number of libraries running the system). But overall, we put a fraction of the upgrade cost for the commercial package into a "features" fund and we pay a company to develop features that we need as we need them. And the beautiful thing is once we pay to develop it, ANY library can use it. And vice versa. Open source feature has already paid off, too, since we found some features essential for our book mobile usage developed already by a library in Pennsylvania.

Re:Why would any one?

[drooling-dog]

Why would any major company agree to such arrangements?

Why indeed. Just the other day I was talking to a guy who works for a large company that forbids any use whatsoever of open source software, on the grounds that it would somehow leave them exposed to some kind of legal repercussions. One can only wonder if any of their lawyers and managers have even looked at the EULA crap they actually do agreed to, or where their odd misconceptions of FOSS alternatives came from.

Re:Why would any one?

[BlueGMan]

Why would any major company agree to such arrangements?

You have been using the vendor for years. All of your data is tied up with them in THEIR proprietary format. Moving to a new system is impossible with new OMB rules for capital investment and you are negotiating a new contract. I have been in this space for 12 years dealing with the ERP vendors (the big THREE) .. let me tell you, they are all rife with bugs, poor performance, $275/hr and up "supporting contractors".. it is a nightmare.. to the tune of 100M a year or more in some cases per AGENCY... fortunately, we can and do talk in the Fed (not as much as one would hope) but sometimes it is a "hogtied" scenario and its that or nothing, and nothing isn't an option.

Good luck

[qoncept]

I just got an email from my boss that our proposal to switch to a new reporting tool, mostly due to the licensing BS the old company tried to pull, has been approved. The moral? Don't pull this shit or you'll get dumped. Rewriting all of our reports in the new environment is going to be expensive, but cheaper, in the long run, than dealing with that sleazy company.

"and cannot go to the media as a last resort, if needed.'"

Is that a joke? What an interesting story that would be.

The blank check is in the mail.

[Ostracus]

"Presto Vivace writes to tell us that CIO has an interesting article about customer "gag orders" that some ERP vendors are trying to impose contractually. "

Contracts aren't blank checks. There are limits.

Intelligence is needed in software companies...

[sanosuke001]

And they wonder why people resort to piracy?

In all seriousness, trying to force the consumer to do anything to save your business will ultimately drive them away. If you want to safeguard your business, stop making a poor product, work with your customers to fix issues, give decent support, and stop trying to legally tie their hands behind their backs.

This is akin to legal DRM. All it does to legitimate customers is push them away; software piracy seems like the only recourse. Companies have to learn that this is the kind of stuff that we won't stand for if it is ever to change.

Re:Intelligence is needed in software companies...

[MrEricSir]

Pirating software can be an effective business strategy. Think about it -- when you pirate software you might be sued for software piracy. When you pay for it, you might be sued for breach of contract.

Which is worse?

Re:Intelligence is needed in software companies...

[houghi]

trying to force the consumer to do anything to save your business will ultimately drive them away.

Ultimately is long term. Most companies think only short term.

A different approach...

[penguinstorm]

My ERP vendor takes an entirely different strategy of providing miserable tech support, denying the existence of obvious bugs, claiming the the 1960s technology on the back end is better than modern day RDMS, and having their tech support staff focus on minute tiny details that aren't relevant to the problem whenever you ask them for a solution.

I'd switch ERPs in a heartbeat, if the economy would recover.

Re:A different approach...

[SaidinUnleashed]

Ah, so you're using Windows too! Do you like the shiny new interface?

Re:fuck the ciO

[eln]

my ass is on fire you dick face

Call customer support for assistance. Depending on your level of support, we may have a technician on site to deal with your ass fire in as little as 24 hours.

Please do not attempt to solicit help extinguishing your ass from any other source, as this would violate your terms of service. Also, you are reminded that comparing notes with other customers regarding the cost, support level, or any other aspect of your ass extinguishing service will likewise be in violation of the terms of your contract.

Thank you for choosing Enterprise Ass Extinguishing Services for all your ass fire extinguishing needs. A sales representative will contact you following the successful extinguishing of your ass fire for your feedback.

Consumer law

[EEPROMS]

Not sure how it works in the USA be here in Australia any legal contract that misrepresents consumer rights as stated in legislated consumer law can leave a company open to a AU$10,000 fine for each infringement found. A few years back I remember a case were someone got hurt by flying debris on a race track and the owner denied responsibility because on the back of the ticket it said the patrons had no rights to claim damages. Well it went to court the track owner not only had to pay the medical bills and damages but was dragged back into court for fraud and misrepresenting consumer law.

Re:Consumer law

[John Hasler]

This is not about "consumer" law. It is about contracts between businesses.

Re:Consumer law

[erroneus]

Usually these agreements contain "void where prohibited" in there somewhere. This, obviously, leaves knowledge and interpretation of the local over-riding laws up to the consumer. It's a problem and a responsibility we shouldn't have to be saddled with.

What sign those contracts?

[DoofusOfDeath]

The software and services fees for an ERP installation often run into the millions on dollars.
And support contracts come up for renegotiation occasionally.

Can't the customer just cross out the relevant lines in the proposed contract and say, "fuck you"? And if they can't, because the vendor has so much control over the relationship, *that* along should be a cause of nightsweats for the CIO, CEO, and the board of directors.

Re:What sign those contracts?

[John Hasler]

> Can't the customer just cross out the relevant lines in the proposed contract and say,
> "fuck you"?

I would think that the fact that a vendor would even attempt to impose such terms would be sufficient reason to look for an alternative.

Re:What sign those contracts?

[CodeBuster]

Get yourself an open source ERP solution. Why be held hostage by a vendor for critical business functions?

Customers force a need for these

[abigsmurf]

I get the impression a lot of people who say that restrictions on what you can say about your service is immoral, even if it isn't illegal, haven't experienced what it's like to be at a very small IT company.

Customers will mess you around big time. They'll get you to spend a lot of time preparing an assessment and quote, get you to travel halfway around the country to have a 45 minute meeting with you which is fair enough. However they'll then take your proposal, show it to another company who spend some time figuring out how they'd provide a similar service and travel up for a meeting. The customer would then say "can you do this £500 cheaper?". If they say yes they go back to the first company to see if they'll go lower.

You can argue this is just being sensible but in truth, you're using up a lot of other people's time and eventually they'll have next to no profit margin but can't give up the contract because so much time has been invested already. Whilst this is going on, the company has to take the focus away from looking for new contracts to work with them.

This can utterly destroy small businesses who need a steady stream of income to keep their head above water. I work for a company who suffers from this but thankfully it's comprised of a lot of small companies in similar situations and they'll warn each other if there's a customer wasting time like this. Not every company is IBM, Microsoft etc. who can absorb the cost of these customers. We were almost driven to administration by one particular religious group who, after stringing us along for a month and having us draw up a complex proposal and organise government assistance for them, decided to show our proposal to a different company and get them to undercut us.

Many companies have no choice but to force NDAs on lots of aspects of proposals because of this.

Re:Customers force a need for these

[Mr. McGibby]

It is not your customer's responsibility to make your business model work. If you can't get business the way you're doing things, then don't do things that way.

Re:Customers force a need for these

[dltaylor]

What pferdmerde!

Getting yanked around on the front end is not what the discussion is about. NDAs during negotiation are meaningless, because the potential customer knows the quotes from all vendors, and can simply say "lower. no, lower", without specifying anything from the proposal.

This is about telling everyone who will listen that "feature X, though documented, doesn't work; the company denies the problem and isn't fixing it. if it's important to you, don't buy this software.", or, "if you buy this software, the price quote doesn't include the 200% additional cost for \"consultants\" to get it to actually run.".

Gag orders

[Captain Spam]

Well, it IS a bit unusual for a company with which you have a vendor relationship to send YOU an order, but if your company makes the best in a variety of gags and other imprisonment equipment and they have a specific use for them, then there could be perfectly reasonable explanations as to why they might want to...

What?

That's not it?

Oh.

Doesn't matter. In fact, makes more sense, really, there's not much business in the gag industry. Might raise some eyebrows, especially with a company acting as a vendor to others. However, everybody needs a good laugh now and then, and if your company makes some decent gags and other tomfoolery to go around, then I can certainly...

What NOW?

It isn't?

Are you serious?

Well, that IS a bit shameful, then. I mean, your company's time and effort is very important, and it can't be stuck wasting both dealing with phony "gag" orders. In fact, there should be laws against it, though I get the feeling these are a bunch of punk kids trying to...

Look, if you're going to keep interrupting me...

What do you MEAN "wrong again"?!?

*sigh* All right, fine, YOU make your own damn comments, all right?

Honestly, can't figure out just what it is you people want from me...

Answer: PHB

[mengel]

Because a Pointy Haired Boss says "I don't care what the end user license agreement says! Install the software!." After five or ten rounds of that, the admin doesn't even ask his/her manager anymore. They just click "I Agree" in the box without asking.

Now if it's an actual paper contract that goes through a legal department, the story might be different; but it rarely is.

Only a complete loon would agree to such terms

[John Hasler]

Of course, if you're locked into their software already and these are the new terms for the next version which you have to have because they are dropping support for your present one, well, you were a complete loon to lock yourself in to begin with.

Why would anyone agree to it?

[chrome]

Where I am, vendors dance to our tune. Maybe it's because we're huge, but compared to the US we're tiny, but none of our vendors try that crap on us.

Jut the mere hint that we might think about going to a competitor, and they're scrabbling around on all fours, asking for forgiveness.

Don't agree to it in your contract and they have nothing on you? *shrug*

Old News!

[Anonymous Coward]

This stuff has been going on for many years. In the mid-90's PeopleSoft had most if not all of the same clauses in their contracts. Highly configurable software and users were not allowed, under the contracts, to share configurations, add-on code, homegrown reports, etc. Any violations of any of the clauses, by contract, would result in termination of support, termination of license for use, and/or lawsuits.

Downloads are needed in software companies...

[Ostracus]

How about option three? Don't use their product at all?

Wikileaks to the rescue.

[Hordeking]

I guess anything that needs to get out will have to be anonymously leaked.

If truth be told

[Linker3000]

Our ERP company is a crock of q14=&$^8 NO CARRIER

Large Enterprises

[Anonymous Coward]

In large enterprises, the "click through license" usually means nothing. Lawyers have gotten together to determine the true agreement.

But, some of those signed agreements are really, really stupid - sorta like the finance guy who would search ebay for better pricing on Cisco $150k switches. Idiot.

The PHB is usually a huge idiot when it comes to software. He/she got where they were by demanding action "install CRM this year", then holding all pay raises for 10,000 people in IT hostage until it is done.

Where I worked, Microsoft gave us a bunch of BPM free software. It turns out they needed some sucker/company to stress test it. What a joke. There software performance was tied to how big/fast your MS-SQL server clusters were since **every** transaction, no matter how short lived, had to be put into the DB. In the end, it couldn't keep up and we wasted 9 months with MS engineering/support. We deployed a few IBM P-series servers with 24 CPUs and switched to a UNIX BPM solution that could scale the way we needed in just a few months. Done.

The 120 windows servers were never fully reused before their warranties ran out. MS hadn't certified anything on VMs at the time.

I'm probably violating an agreement talking about this now. That was under company that was bought out by an even larger company a few years ago.

HRMMMMM! NNNNNNG!

[Aurisor]

*struggles against the duct tape*

URMMMM! HRMMMMM! NNNNNNNG!

*rocks chair*

Well, ?

[FeatherBoa]

Well I work for and we ! Frankly, otherwise. Furthermore , and I really don't see the problem.

CLM explained

[Savantissimo]

CLM may mean:

Cthulhu Love Manouever
Crazed Licentious Muppet
Coccyx Liberating Moose
Custom Lined Meerschaum
Coconut Lapidary Mount
Carnivorous Lemur Molester
Chilton's Lada Manual
Cretaceous Labradorite Mineralology
Chicken Lusting Madmen
Customer Lip Management
Cheeky Little Morons ...or permutations thereof.