back to article Different judge, different verdict? Diageo's £54m SAP legal slap could have gone another way

If you use software licensed by SAP, you had better read your licence. If you have not yet acquired SAP software, you should make sure you use an experienced IT licensing lawyer before contracting. If you agree to SAP’s standard licence terms and use the software in a way not expressly permitted by the licence, it could cost …

  1. Hans 1
    Holmes

    >If you are a SAP user, you should check your licence terms and audit how you use the software. Based on this decision, you might well get a call or audit request from SAP.

    If you are a SAP user, migrate aSAP. ®

    TFTFY

  2. Mage Silver badge
    Unhappy

    Appeal

    Can it be appealed?

    I wrote a server service that provided web access to data stored on Sage Accounts. It was not using any Sage feature / api other than the data access. 2003.

    Are users to be charged extra to access the data they put into a package, or do they need to create a separate database and export that data to SAP, Sage, etc.?

    It seems restrictive and greedy.

    1. Aristotles slow and dimwitted horse Silver badge

      Re: Appeal

      Maybe it does seem greedy - but that's a very subjective and emotive response to the defined and legal terms of a contract that Diagio signed up to. It is hardly SAPs fault if Diagio failed to either fully understand those terms, or if they failed to update those terms or agreements when they started adding additional 3rd party connectors into PI, or for the additional chargeable data throughput that those additional connectors into PI imply. Let's not forget that thay probably *cough* forgot to add the licenses for the additional named users to boot.

      At a high level it is very simple, you pay a cost for the throughput through PI, and you also pay the license cost every time that that 3rd party application queries any particular api or mySap application.

      1. Anonymous Coward
        Anonymous Coward

        Re: Appeal

        "It is hardly SAPs fault if Diagio failed to either fully understand those terms"

        Oh come now. We all know IT company contracts are designed to be as unnecessarily opaque as possible - Scott Adams described AT&T as a "confusopoly". And in my limited understanding of contract law, if one side doesn't understand the contract then it is not a contract - the clue is in the "con" part, meaning together. The fact that lawyers can disagree on the meaning of the contract shows a degree of opacity.

        We cannot prove that SAP set out to make the contract more all-encompassing than the customer was led to believe, but we can be sure that their lawyers were not instructed to let the customer avoid paying for anything possible.

        1. Colin Millar

          Re: Appeal

          If one side that is a massive global firm with lawyers coming out of their ears doesn't understand the contract then they shouldn't have signed it - this is not the same as a domestic consumer being faced with 20 pages of legalese.

    2. Anonymous Coward
      Anonymous Coward

      Re: Appeal

      We wanted to use product X to calculate some statistics for clients.

      So XXX wanted 100$ per potential user. Times 1M, they wanted 100 Million.

      So we did it with custom software for 500.000$. They lost plenty of money, as the client would have paid a lot of money, but certainly not 100 Million $.

      Anon, as I dont want to show who spilled the beans... and if I put the name of the company or client, they will probably know that it is me.

  3. Anonymous Coward
    Joke

    I looked hard, but...

    I couldn't find the clause where you are required to give up your first born son to SAP. Everything else seemed to be there...

    1. IHateWearingATie
      Devil

      Re: I looked hard, but...

      You missed it.

      Schedule 6, section 6.6

      Its the bit with a pentagram next to it...

      1. billse10

        Re: I looked hard, but...

        i thought that was the old Windows Server license - the one that calls every DHCP client a Windows User?

  4. Anonymous Coward
    Anonymous Coward

    Nice to see Companies / Corporations....

    ~ Getting hit with a 'game of fine-print' for a change. Its especially nice as these mothers extort unreasonably high-fees for Guinness & Baileys imo.

    ~ Overall, this is like getting hit with sneaky Cloud fees.

    ~ Did Diageo turn off an internal system because some 'bungee cord manager' claimed using SAP would be cheaper...???

    1. tfewster

      Re: 'bungee cord manager'

      More of a "seagull manager" - flies in, shits over everything, flies out.

    2. theblackhand

      Re: Nice to see Companies / Corporations....

      In defence of Guiness pricing, the brewery doesn't get a lot - around 12% by the looks of it...

      http://ale.gd/blog/2014/05/who-gets-how-much-of-your-beer/

    3. Anonymous Coward
      Anonymous Coward

      Re: Nice to see Companies / Corporations....

      Did Diageo turn off an internal system because some 'bungee cord manager' claimed using SAP would be cheaper...???

      It was a bespoke system from an external supplier, (much, much cheaper than SAP) but other than that, yes.

  5. Anonymous Coward
    Anonymous Coward

    Another SAP success story (for SAP)

    If you use software licensed by SAP, you had better read your licence. If you have not yet acquired SAP software, you should make sure you use an experienced IT licensing lawyer before contracting avoid it like the plague.

    FTFY

    1. Hans 1
      Paris Hilton

      Re: Another SAP success story (for SAP)

      If you use software licensed by <insert_proprietary_software_vendor_of_choice>, you had better read THEIR licence. If you have not yet acquired <insert_proprietary_software_vendor_of_choice> software, you should make sure you use an experienced IT licensing lawyer before contracting OR avoid it like the plague.

      TFTFBOY

      PS: SAP are no different to Oracle, IBM, HP, or MS, in this respect ... don't, JUST don't.

      PPS: The software vendor I work for is, obviously, the same ... try to circumvent licensing (that means different things to us and to them), bad luck if you get caught.

      PPPS: Where the licence says "You're free to do whatever provided you ship this text with the software, provide the source code, and contribute your changes back" makes so much, much, much, much more sense ... I know "The world won't listen" but then complains when things get awry ...

  6. Anonymous Coward
    Anonymous Coward

    What I dont understand is

    If you are licencing an API gateway by inference you would be granted "indirect access" for some sort of use.

    What do SAP reasonably expect people to licence the API's for, if not to get access to their own data.

    Seems to me that one interpretation not covered is simply that the contract is incomplete (potentially unenforceable) as regular direct users would not reasonably be anticipated to be the only users of an API gateway.

    I would suggest they may have a point if the external functionality behaves like a function that "could" have been licenced via SAP i.e. simply avoiding licences.

    Either way, it seems a very heavy handed way of dealing with the problem, and a rather excessive fee. For the scale of cash they are now collecting a systems migration may actually be cost effective...

  7. EveryTime

    By that broad definition of "indirect user"...

    That's an extremely broad interpretation of "indirect user".

    If anyone that "indirectly" makes use of the data counts, that could end up being a substantial fraction of the population.

    SAP was the one that provided the API interface. They should have understood the implication of doing so. They want both the lock-in of a closed environment, and the revenue from customers that won't accept a closed environment.

  8. Anonymous Coward
    Anonymous Coward

    A comment

    from an IP lawyer I worksite on a regular basis (Ok its a shame we need them, but...)

    Pathetic.

    The exhibit is abundantly clear… (sorry formatting poor)

    c) Licence and Pricing of mySAP Business Suite

    The Customer has selected only those Named Users for the mySAP Business Suite listed below, and the prices for those Named Users are as follows:

    User Categories

    Price per User in GBP

    Developer Users

    Professional Users

    Limited Professional Users

    Employee Users

    Diageo HR Manager Self Service

    Light User

    Light ESS User

    Named User" is defined in clause 1.1 as:

    "an individual representative (e.g. employee, agent, consultant, contractor) of the Customer, a Group Company, an Outsource Provider or a Supply Chain Third Party who is authorised to access the Software directly or indirectly (e.g. via the Internet or by means of a hand-held or third party device or system). The extent to which a Named User is authorised to use the Software depends upon his user category as set out in the schedule."

    So in a conclusion of staggering banality the author concludes that

    If you use software licensed by SAP, you had better read your licence.

    Oh really?!!! Well there’s some advice for you.

    As an aside I agree it’s an egregious licensing policy and you and I spoke some years ago about how SAP have you over a barrel in that once you’ve signed up the cost of changing is eye watering. But equally, someone somewhere said the contract was OK to sign and then didn’t police it properly. My guess is that Addleshaws said that they’d probably lose but it was worth spending £1M+ trying to win as the licence fees they’d avoid would be significantly greater if they did.

    No sympathy. At all. The problem, for what it’s worth, is that SAP’s suite of documents (along with a load of the large software company brethren) are complex, partly duplicative and need forensic attention to understand; and then someone actually has to care that what is put in the stuff at the end (i.e. the number of named users say) really does relate to what the business wants AND then continue to care after the contract is signed.

    Rant over!

  9. RealBigAl

    I imagine there are some senior heads at Diageo right now setting a strategy to migrate away from SAP asap.

    Or maybe they've already got that in plan which is why SAP decided to sue them for lost revenue.

  10. Herby

    Shakespeare was right...

    In other news, one should only agree to contracts that exist on fewer than (I'm guessing here) 5 pages. If it is any more than that, give up and ask for a re-write.

    I'm sure that the contract mentioned was WAY more than 5 pages, and equally confusing.

    In addition, my understand of contract law (here in the USA) is that ambiguities favor the one who DIDN'T write the contract. I'm sure that Sheldon's roommate agreement is equally as complicated as a SAP contract, and equally confusing to all involved.

    1. EveryTime

      Re: Shakespeare was right...

      The alternate view is that the contract should cover all eventualities, so that both sides know what to expect as the situation changes.

      A contact should not just say "Party A shall not do X" without specifying the consequences if Party A does X.

      For all but the most trivial of transactions that leads to far more than 5 pages.

      The problem comes when one side has unilateral power and fills dozens of pages with every possible way they can escape responsibility and liability. Look at pretty much any cell phone contract for an example.

      In the case of SAP or Oracle, once the company relies on their software, they are completely at its mercy. If they want to keep current they are forced to agree to ever more egregious contract terms. If they attempt to be less than totally dependent on it by using the APIs, they may be severely punished.

      The lesson that growing companies should be learning is that switching over from in-house solutions to the "big boy" enterprise software might seem like the obvious path, but it puts the company at risk. You should look at it as a high-interest mortgage that you can't afford -- it solves the immediate problem but you'll be increasing locked in and can never move away.

      1. Anonymous Coward
        Anonymous Coward

        Re: Shakespeare was right...

        With SAP, and others, it gets even more interesting.

        You sign a draconian contract... and put your data in SAP. Big expense.

        Now, when you have all your eggs there, in one renewal of support, they simply change the terms. And that is it, they will get all the money they want from you,

  11. amanfromMars 1 Silver badge

    The View From Rooms Afar .... Future Control Centres.

    That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the contract, (iii) the overall purpose of the clause and the contract,

    The overall purpose appears to result in the third party stifling of novel first party progress.

    Is that the Intention ... and/or an Almighty Glitch for Fixing?

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