Oracle Sues Two VARs over Gray Market Support
Oracle is going after two solution providers and possible more in the future for selling what it calls “gray market” support for Sun Solaris operating system installations and other hardware products.
According to the IDG News Service, Oracle filed federal lawsuits in Virginia against ServiceKey of Norcross, Ga., and DLT Federal Business Systems Corp. (DLT-FBSC) or Wilmington, Del., for allegedly selling unauthorized support for its hardware and software, and improperly accessing account credentials and online resources to facilitate services.
Oracle is charging the solution providers with poising as authorized Oracle partners and representing themselves to end users – including the U.S. Navy and Food and Drug Administration – as authorized to deliver support services.
In the lawsuit, Oracle says the companies used improperly obtained access credentials to online resources to download support materials, patches and other software support. ServiceKey apparently has a valid service contract with Oracle, but it does not cover extension beyond a limited number of internal systems.
The lawsuits harken back to the ongoing legal battle between Oracle and SAP over unauthorized access to copious amounts of support and training material through intermediary TomorrowNow. Oracle won a $1.3 billion judgment against SAP for infringing on its intellectual property. The award was set aside, and Oracle is seeking a new trial to determine damages.
No one is suggesting that the scope of this alleged gray market support scheme rises to the level of the SAP dispute. However, it’s serious enough to prompt Oracle to take legal action. Both ServiceKey and DLT-FBSC represent themselves as services companies that provide technical support and maintenance to solution providers and end users.
ServiceKey and DLT-FBSC did not respond to IDG News’ request for comment.
ServiceKey’s Web site notes its partnerships with and support services for IBM, Hewlett-Packard, Microsoft and Sun Microsystems, among other vendors.
DLT-FBSC, which is unrelated to federal integrator DLT Solutions, lists Symantec, Dell, IBM, Microsoft and Cisco as partners. According to the lawsuit, DLT-FBSC was an Oracle partner until November 2011, but the contract was revoked.
Oracle is seeking injunctions against both companies. Oracle also suspects other “unknown” companies participated in similar activities and hopes to learn the identities of them through the legal discovery process. More lawsuits could follow.
While Oracle is claiming fraud, breach of contract and infringement of its intellectual property, there’s a counterargument to this situation. Gray market services could be the result of overly restrictive support contracts and programs that impose too many conditions on partners, or restrict solution providers from delivering truly valuable professional services. In recent years, partners have challenged the service and support contracts of some vendors, alleging antitrust issues.
Oracle, one of the more litigious vendors in the IT industry, could be getting more aggressive against companies it sees as eroding its value, revenues and competitive positioning. The outcomes of these lawsuits could have broader ramifications for the services channel.
One Response to “Oracle Sues Two VARs over Gray Market Support”
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The term “Gray market” in this case is missapplied and somewhat a concoction of an OEM vendor seeking to limit, or restrain on what they see as a revenue stream for their own hardware service contracts. Ever since the IBM concent decree back in the 50′s there has been a thrieving market in 3rd party service suppliers that have kept the OEM’s on their toes and from chargeing ruinious prices for support. In this case Oracle is attempting to create a “stigma” about such providers when in fact none exists at all.