Make Sure Your Software Vendors Can't Lock Up Your Most Important Assets

from the an-important-lesson dept

Two totally separate stories today highlight the importance of recognizing the difference between “owning” a piece of software and just “licensing” it (an issue that’s getting some attention in the courts these days). First comes the story of the parking garage in New Jersey that operates with a giant parking robot that moves the cars around, making more efficient use of the space. There was a contract dispute with the company who runs the parking robot, and its employees were kicked off the premises, taking the intellectual property rights of the software that runs the robot with them — leaving the giant parking robot and the cars it had parked stuck in park. Then, there’s the story of a bunch of doctors offices who used some proprietary patient medical records software called Dr. Notes. The company behind Dr. Notes decided to raise their license fees by a huge amount — and doctors who refused to give in suddenly discovered they could no longer access their patients’ records, presenting a fairly serious problem for those whose well-being depend on their doctor knowing their medical history. In both cases, the companies providing the licenses recognized (correctly) that this allowed them a tremendous amount of leverage in any future contract negotiation, since they could (literally, in some cases) lock up their customers’ most important assets. For companies buying technology products who think things like the details of intellectual property law and licenses don’t matter, perhaps these stories will make them a little more aware of a few of the reasons why it’s important to understand what you license and what you own — and recognizing that you never want to trust your most important assets to an outside vendor.


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Comments on “Make Sure Your Software Vendors Can't Lock Up Your Most Important Assets”

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15 Comments
JM says:

I don’t think corporations should be allowed to bind anyone into a contract that essentially locks them out of their own businesses. Especially those in the healthcare industry – who would be liable if someone was seriously injured due to their physician denied access to needed information because a company decided to revoke licensing over some garbage dispute.

Software licensing these days is just crap.

Ian Holsman (user link) says:

Re: binding contracts

but these binding contracts are good as long as you know what you are getting into. It allows you to bargain a much lower price for the product, due to the lock in. (and also to make the contract for a much longer period of time). you need to factor in the cost of re-entry/re-keying at a later date into the price you are paying.

Then once you are about to renew it (while you are still in contract) you negotiate with them. and be prepared to re-key.

leaving it until the product expires is just stupid.. you’ve lost all your negotiation leverage.

techguy says:

I work for a company that provides software to the healthcare industry. Our company was started based on the idea that people who pay us money should actually own what they pay us for. We sell them the product, they get 90 days free support, then after that they continue to use the product with no additional required fees. If they want us to help them fix anything that might break they have to pay for a support contract.

Unfortunately from what I understand, this is the exception more than the rule when it comes to high-end software.

Anonymous Coward says:

read contract and click "I agree" or find somethin

it seems lately everything requires a contract basically promising not to blame them if anything goes wrong and swearing to go to prison if you try make a copy. also by using their product they have the right to sell any information they can collect about you. this seems like one more instance of someone scrolling to the bottom of the contract and clicking “I agree”

Anonymous Coward says:

read contract and click "I agree" or find somethin

it seems lately everything requires a contract basically promising not to blame them if anything goes wrong and swearing to go to prison if you try make a copy. also by using their product they have the right to sell any information they can collect about you. this seems like one more instance of someone scrolling to the bottom of the contract and clicking “I agree”

Myself says:

I’m surprised a court didn’t force them to fire up the robot and get people’s cars out. If they want to shut down the parking system *after* that, go ahead, but when unrelated third parties’ property is held hostage, it’s time for an injunction.

Or for every car owner involved to charge both other parties with theft.

Or for a surgical strike team of industrial robotics experts, hackers, and ninjas.

Matt Ridings (user link) says:

Overflow into ASP's

Of course this also overlaps with discussions of internet based ASP’s vs. running your own apps inhouse.

Whether it’s at a organization like Google storing your email, or a SalesForce.com storing all of your sales data. At a business level there should be a proportional amount of upfront due diligence as compared to the direct impact the information being stored could have on your business.

Some firms go to great lengths to provide assurances, while others go to great lengths to insure they have flexibility in the future.

But when you are talking about small businesses, whether a doctors office or a parking garage it is rare that they have the resources inhouse that actually understand these issues, therefore the attention paid to this during initial purchase is minimal. All they care about at the point of purchase is features and capabilities. Hard to blame them. Only way I see to improve this is to have it highly publicized.

-Matt

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