Support that is independent of vendors
Larry Walsh looks at independent support offerings in the wake of the US Oracle-ServiceKey grey market stoush
Under the terms of a proposed legal settlement, ServiceKey soon will be out of the Oracle hardware maintenance business, bringing to end allegations the Georgia-based companyengaged in a grey-market scheme to provide unauthorised support services to companies not under contract with the vendor.
The proposed settlement will result in no monetary damages to Oracle. 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.
"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 has reportedly said, in a statement to the media.
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 or Sun 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, 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 unauthorised access to its intellectual property and encroachment on its services business. It has sued services provider Rimmi Street for offering unauthorised services, and it won a big lawsuit against rival SAP for pilfering software specifications and support documentation.
Oracle isn't alone when it comes to vendors going after providers that buck formal channels for supporting end users. Cisco, IBM, and others have hunted downproviders 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 - fulfilment rarely exceeds the support capacity or expense.
Some allege the term 'grey market' with regards to these programmes has been misapplied, as services and support methodologies and materials may be developed independently by providers.
In the ServiceKey case, though, Oracle support for the minor contract was funnelled 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 resellers develop methodologies and capacities for supporting vendor products.
Independent support is a contentious issue between resellers and vendors, as it denies vendors access to lucrative revenues and insights into customer activity.
Perhaps one of the most famous such disputes has been 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 into its partner portal to obtain support documentation. Multiven, which denied wrongdoing, countersued Cisco for antitrust violations.
VARs chafe 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.
Larry Walsh is chief executive officer and president of Channelnomics
As part of our special editorial partnership, CRN is republishing this article from Channelnomics