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Does Your Vendor Issue Gag Orders?

ScuttleMonkey posted more than 5 years ago | from the next-up-charging-protection-fees dept.

IT 210

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?

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210 comments

fuck the ciO (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#26876989)

my ass is on fire you dick face

Re:fuck the ciO (5, Funny)

eln (21727) | more than 5 years ago | (#26877133)

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.

Re:fuck the ciO (1)

von_rick (944421) | more than 5 years ago | (#26877287)

A sales representative will contact you following the successful extinguishing of your ass fire for your feedback.

And we'll also send you a coupon for 50% OFF on fire extinguishing the next time your buttocks are on fire.

Re:fuck the ciO (1)

mschuyler (197441) | more than 5 years ago | (#26879399)

The Fine Print: The 50% off coupon is for one buttock only. There's an extra charge of both buttocks are on fire at once.

Old News! (2, Informative)

Anonymous Coward | more than 5 years ago | (#26877685)

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.

PeopleSoft can extinguish my hairy yellow ass... (1)

Dogtanian (588974) | more than 5 years ago | (#26878789)

my ass is on fire you dick face

Call customer support for assistance. [..] Please do not attempt to solicit help extinguishing your ass from any other source, as this would violate your terms of service.

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.

OMFG!!! PeopleSoft were in the ass-on-fire business? No wonder they didn't want people discussing it!

(Oh yeah, and... naughty boy. That's what you get for posting your comment as a "reply" to an unrelated one in order to get a more favourable position :-P )

Re:fuck the ciO (0)

Anonymous Coward | more than 5 years ago | (#26877787)

So, your expecting "as on fire" to get gagged while giving oral feedback to the sales representive?

Re:fuck the ciO (0)

Anonymous Coward | more than 5 years ago | (#26877793)

I'm tired of reading the self-pitying whining of IT customers here. This is just the age old contest between buyers and sellers. If you don't like a particular contractual condition or price negotiate a better deal or take your business elsewhere. Its as simple as that.

Re:fuck the ciO (1)

LVSlushdat (854194) | more than 5 years ago | (#26878369)

Nobody's forcing you to read this "whining".. I, as an IT professional WANT to know when a company is trying to pull these stunts.. If you don't like reading these articles, DON'T READ THEM!! I for one want to hear all I can about this type of activity by vendors.... STFU!!

All we need now is a homeland security tie-in (3, Interesting)

swb (14022) | more than 5 years ago | (#26877053)

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 (-1, Offtopic)

Fulcrum of Evil (560260) | more than 5 years ago | (#26877601)

Guess you didn't get the memo - Dubya is out of office, and Obama don't roll like that.

Re:All we need now is a homeland security tie-in (1)

Forty Two Tenfold (1134125) | more than 5 years ago | (#26879217)

The President in particular is very much a figurehead - he wields no real power whatsoever. He is apparently chosen by the government, but the qualities he is required to display are not those of leadership but those of finely judged outrage. For this reason the President is always a controversial choice, always an infuriating but fascinating character. His job is not to wield power but to draw attention away from it. On those criteria [...]

From "The Hithchiker's Guide to the Galaxy." Sue me.

Re:All we need now is a homeland security tie-in (5, Insightful)

ShieldW0lf (601553) | more than 5 years ago | (#26877623)

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 (2, Insightful)

Lumpy (12016) | more than 5 years ago | (#26878447)

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 (1)

iminplaya (723125) | more than 5 years ago | (#26879419)

But the proposal still stands. Anybody who agrees to that kind of language should be canned. They get no sympathy from me. This is why we have such crap products on the shelves today. The customer is supposed to be boss. It's about time they assume the role.

Re:All we need now is a homeland security tie-in (4, Funny)

icebike (68054) | more than 5 years ago | (#26878335)

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 (1)

swb (14022) | more than 5 years ago | (#26878575)

No, HRM and CRM are just ERP modules.

Let them sue (3, Insightful)

Rinisari (521266) | more than 5 years ago | (#26877071)

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

Right?

Re:Let them sue (2, Interesting)

Anonymous Coward | more than 5 years ago | (#26877253)

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 (1)

Bryansix (761547) | more than 5 years ago | (#26877361)

(Sarcasm) Because companies should be allowed to make it harder to use a credit card and force cash only transactions because carrying around cash is a good idea. In addition if you want a candy bar you better had the cash or you get to go hungry... serves you right for living in the 21st century! (end sarcasm)

Seriously! What are you smoking. Those Credit Card rules are totally fair and anybody who wants to break them doesn't deserve to get my business.

Re:Let them sue (1)

fmobus (831767) | more than 5 years ago | (#26877821)

Yeah, it's totally fair to have cash-paying people subsidize card charges related to other people's purchases. I really hope your sarcasm mark was around the wrong paragraph.

Re:Let them sue (1)

Bryansix (761547) | more than 5 years ago | (#26879583)

Are you freain' kidding me? It's cost of doing business! Take credit cards or go work in McDonalds. This is 2009 after all. And Cash is NOT free. You have to pay someone to take it to the bank and to drop off spare change of smaller bills. Then there are the security risks it entails. Basically you are telling one side of the argument and being a complete Luddite at the same time.

Re:Let them sue (4, Informative)

phantomlord (38815) | more than 5 years ago | (#26877981)

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 (2, Interesting)

Anonymous Coward | more than 5 years ago | (#26878313)

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 (4, Interesting)

nwf (25607) | more than 5 years ago | (#26878363)

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 (1)

jcrousedotcom (999175) | more than 5 years ago | (#26878539)

I agree - someone was getting taken - or the merchant (read business owner) had sh*t for credit and had to go to whatever merchant bank would take them. I don't think Paypal charges that much for their 'Merchant account' type system (which is pretty high). . . Typically, with most Merchant banks, those charges a lot less.

Re:Let them sue (1, Insightful)

phantomlord (38815) | more than 5 years ago | (#26878603)

Bigger businesses work out better deals with the credit card processing companies (often working directly with the credit network instead of an intermediary) while smaller businesses can't do that, so you get stuck with a middle man making profit for not doing much other than passing your transactions to the merchants.

I wasn't involved in the actual negotiations with credit card processing companies, the owners of the restaurant did that themselves. All I know are the details of the deal they negotiated for us (and knowing how cheap the owners were, I'm sure they got the best deal they had available to them and they took 6 months from the time they decided to take cards until actually having a reader in the restaurant, so I don't think they went with the first processor).

To the AC below, we were charged just the transaction fee on debit cards, not the percentage, so it was a flat 75 cents for all debit transactions. That still puts us a quarter in the hole on a $1 candy bar.

Re:Let them sue (1)

SatanicPuppy (611928) | more than 5 years ago | (#26878687)

It depends 100% on your transaction volume and your history. Where I work we get transactions for pennies, but that's an exceptional deal that we get for being a long-standing, reputable, high-volume customer.

If you get a lot of disputed charges, if you only process a handful of cards...It's a wholly different situation, and the GP is right, it can cost 75 cents or more to process a card.

Re:Let them sue (1)

quasigenx (843945) | more than 5 years ago | (#26878435)

Supposedly using debit instead of credit at the checkout doesn't cost the store anything. Is that true?

Re:Let them sue (3, Informative)

jjeffers (127519) | more than 5 years ago | (#26878477)

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 (0)

Anonymous Coward | more than 5 years ago | (#26879549)

In order to accept credit cards, merchants agree to be bound by the card brand's merchant regulations. Part of these regulations state that (again, this is for CC transactions - Debit transactions are a different beast) for a CC transaction, no minimum transaction amount can be imposed by the merchant, nor can they add a transaction fee. For Mastercard, the URL for complaints is http://www.mastercard.com/us/personal/en/contactus/merchantviolations.html [mastercard.com] . Visa doesn't have a form for it, but if you're curious, the Visa Merchant Regs can be found at http://usa.visa.com/download/merchants/rules_for_visa_merchants.pdf?it=il [visa.com] |/business/accepting_visa/support_center/tips_tools_downloads.html|Rules%20for%20Visa%20Merchants. Personally, I refuse to pay transaction fees or minimum transaction amounts. A business can refuse your business at that point however. Merchants can also offer a discount for cash, but they have to inform you of the discount prior to the initiation of the transaction.

Re:Let them sue (1)

Bryansix (761547) | more than 5 years ago | (#26879659)

Lame and not informative at all. I have actually setup merchant accounts myself so let me explain something basic. All the fees are negotiable. You can in addition ask for a lower transaction fee and in place pay a higher percentage. For a food service merchant account that is the way to go. For high dollar items you want a high transaction fee so you can get a low percentage.

Fees are not that high. For instance Paypal is 1.9% to 2.9% + $0.30 USD See here... https://www.paypal.com/cgi-bin/webscr?cmd=_wp-standard-overview-outside&nav=2.0.0 [paypal.com] So basically you either had a shitty merchant bank or you pulled the numbers out of your ass.

Re:Let them sue (1)

Zerth (26112) | more than 5 years ago | (#26878199)

All of those are true, except for the cash discount. You are not allowed to charge CC customers more, but you are allowed to discounts cash customers.

It's all in how you word the signs.

Also, while I dislike the "no minimum", I only dislike it because of the 20-30 cent base transaction fee. If CC companies would switch to a straight percentage, I'd wouldn't want a minimum fee.

Although I could get along with a 1 penny base transaction fee

Re:Let them sue (1)

FesterDaFelcher (651853) | more than 5 years ago | (#26878879)

Specs liquor has the largest sales volume of any liquor company in Texas, and they have ALWAYS had a 10% discount for cash. Which nanny state are you living in where you CAN'T charge less for cash only transactions?

Re:Let them sue (1, Insightful)

jimicus (737525) | more than 5 years ago | (#26877329)

For those of us who are employees, exposing your employer to legal action is generally a CLM.

Re:Let them sue (3, Informative)

erroneus (253617) | more than 5 years ago | (#26877571)

http://acronyms.thefreedictionary.com/CLM [thefreedictionary.com]

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 (1)

smidget2k4 (847334) | more than 5 years ago | (#26878859)

I am just going to pick my favorite meaning from that list.

Exposing your employer to legal action truly is a Cyber Lady Ministry. Hit that right on the head.

Re:Let them sue (0)

Anonymous Coward | more than 5 years ago | (#26879137)

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?

RTFM. STFU, GBTW!

CLM explained (2, Insightful)

Savantissimo (893682) | more than 5 years ago | (#26879351)

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.

Use of an abbreviation has a connotation (1)

tepples (727027) | more than 5 years ago | (#26879491)

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?

Using an abbreviation without expanding it carries a specific connotation, namely that the concept that the abbreviation represents is so entrenched that anybody who cares about the subject should already know the expansion. For example, entities who favor the expansion of government-granted monopolies on reproduction use "IP" without explaining that it refers to "intellectual property", not Internet Protocol.

Re:Let them sue (0)

Anonymous Coward | more than 5 years ago | (#26877401)

or this 'I would LOVE to talk about them but I am under contract not to say anything bad about them'. Let the reader fill in the lines...

Re:Let them sue (1)

QuantumRiff (120817) | more than 5 years ago | (#26879023)

Your assuming that the lawsuit would be in the court of law. Point me to a single contract nowadays that doesn't force you into "mandatory binding arbitration". Go google that phrase, your screwed if you think you can take it to court.

Why would any one? (4, Insightful)

olddotter (638430) | more than 5 years ago | (#26877073)

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.

Answer: PHB (3, Insightful)

mengel (13619) | more than 5 years ago | (#26877491)

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.

Large Enterprises (4, Interesting)

Anonymous Coward | more than 5 years ago | (#26878079)

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.

Re:Why would any one? (4, Interesting)

Anonymous Coward | more than 5 years ago | (#26877993)

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? (1)

Stultsinator (160564) | more than 5 years ago | (#26878253)

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

Oh no...

This may be a valid analogy, but I can totally see it getting out of hand.

The Pirate Bay Trial, Prosecutor:
"Your honor, what The Pirate Bay is promoting, in essence, is the same thing that caused the meltdown of financial systems worldwide!" (followed by dubious lines of logic.)

Re:Why would any one? (2, Informative)

drooling-dog (189103) | more than 5 years ago | (#26878825)

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.

Good luck (5, Interesting)

qoncept (599709) | more than 5 years ago | (#26877103)

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.

IBI? (0)

Anonymous Coward | more than 5 years ago | (#26878043)

Oh you've dealt with Information Builders, too?

The blank check is in the mail. (2, Insightful)

Ostracus (1354233) | more than 5 years ago | (#26877109)

"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... (4, Insightful)

sanosuke001 (640243) | more than 5 years ago | (#26877111)

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... (3, Interesting)

MrEricSir (398214) | more than 5 years ago | (#26877225)

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?

Downloads are needed in software companies... (2, Insightful)

Ostracus (1354233) | more than 5 years ago | (#26877697)

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

Re:Downloads are needed in software companies... (1)

PitaBred (632671) | more than 5 years ago | (#26877803)

The job still needs done one way or another. Maybe not by that specific company's product, but somehow. If you have the choice of a) Shitty contract that costs a LOT b) Piracy that is reasonably safe or c) Don't get the job done and lose the efficiency gains/cost savings/money making, what do you choose?

Re:Intelligence is needed in software companies... (4, Insightful)

houghi (78078) | more than 5 years ago | (#26878077)

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... (4, Informative)

penguinstorm (575341) | more than 5 years ago | (#26877113)

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.

I could tell you, but then I'd have to kill you (1)

devnullkac (223246) | more than 5 years ago | (#26877261)

Seriously, anyone who's living under a gag order like that and can't go to the "media" won't be able to talk about it on Slashdot, either. It's right there in the first concern listed in TFA:

discussions of contractual details require the vendor's written permission

not ERP per se, but our sales/accounting sys (1)

hurfy (735314) | more than 5 years ago | (#26879141)

Since it wasn't specifically pointed out...and the original vendor has been bought out TWICE....

The thing i hate about this setup is the lack of user help. The only avenue for aid is through a paid support contract. Irrelevent for us as there is also a required yearly license or it shuts itself off (one of them undisclosed at purchase, i wouldn't have bought if both costs known :/) Sometimes it would be nice if people that found a workaround could share it, but since you can't talk about the problem it is tough to share the solution to something that doesn't exist.

There is also nothing to base a purchase decision on :( If more info had been available beforehand we might not have overlooked a MAJOR shortcoming during demo.

I expected a little more polish on a program that has been in use like 20 years....

Consumer law (4, Interesting)

EEPROMS (889169) | more than 5 years ago | (#26877341)

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 (2, Informative)

John Hasler (414242) | more than 5 years ago | (#26877653)

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

Re:Consumer law (1)

jimicus (737525) | more than 5 years ago | (#26878609)

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

Depending on the country, there are still some laws governing contracts between businesses.

Re:Consumer law (2, Insightful)

erroneus (253617) | more than 5 years ago | (#26877667)

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.

Re:Consumer law (0)

Anonymous Coward | more than 5 years ago | (#26878431)

Except that consumer protection laws are exactly that - laws to protect consumers. They explicitly exclude Business-2-Business transactions.

What sign those contracts? (3, Insightful)

DoofusOfDeath (636671) | more than 5 years ago | (#26877385)

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? (2, Insightful)

John Hasler (414242) | more than 5 years ago | (#26878061)

> 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.

Customers force a need for these (3, Interesting)

abigsmurf (919188) | more than 5 years ago | (#26877419)

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 (4, Insightful)

Mr. McGibby (41471) | more than 5 years ago | (#26877583)

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 (1)

abigsmurf (919188) | more than 5 years ago | (#26877751)

That's kind of my point. These NDAs are used because it can be impossible to stop customers trying to get other companies to undercut you and take advantage of the work you've already done.

Re:Customers force a need for these (3, Insightful)

dltaylor (7510) | more than 5 years ago | (#26877679)

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.".

Re:Customers force a need for these (1)

abigsmurf (919188) | more than 5 years ago | (#26878083)

Really? TFA talks about not being able to discuss contracts with third parties.

There's a difference between A company drawing up their own different business plan and then haggling on the price to showing your business plan to them and getting them to provide the exact service you spent ages planning for a slightly lower price.

Re:Customers force a need for these (1, Informative)

Fulcrum of Evil (560260) | more than 5 years ago | (#26877693)

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 is called the sunk costs fallacy; if you're being jerked around by some customer, your best bet is to fire them and go look at other contracts. It's also handy to specialize a bit so your costs for the bid are spread across a number of clients.

Re:Customers force a need for these (0)

Anonymous Coward | more than 5 years ago | (#26877991)

A sunk cost fallacy assumes changing course would result be a preferable action. However by that point you need the slim margin just to survive.

Yes you can fire the customer but that only happens after they've wasted all that time and money. If you have a few customers do that, it'll destroy the business. If you're in an area where you can't have referrals you ultimately need to protect yourself against customers who do this.

So, you don't like the free market? (1)

Moraelin (679338) | more than 5 years ago | (#26879379)

So, basically, you need to pull such BS because you don't like the free market?

Because that's really how it was supposed to work: many perfectly interchangeable products and vendors, perfectly informed customers, and they'll buy from whoever asks the least money for it.

Yes, it drives profit margins down, but that's what it's supposed to do. And it's also the way to weed out the inefficient vendors. If company X can offer the exact same product for $500 less and still make a profit, while company Y would go bankrupt with it, then probably company X is a better use of society's resources.

It's really an optimization algorithm. It matches the available resources (employees, land, ore, electricity, whatever) to who/what can produce more of what everyone needs and less of what we don't.

Seems to me like at least the kind discussed here, wants to get rid of the shopping around _and_ the part about the customers being informed. You know, what with the gag orders and all.

I'm sorry, but I don't think you have some sacred right to make a profit. If your business model doesn't work without turning the whole market model on its head, well, maybe you shouldn't be in that business in the first place. Not said as a flame or anything, but I simply fail to see the point in returning to a fancy form of feudalism.

Don't get me wrong, I'm not saying you must bend over for a customer that's trying to push you to sell below your costs. If you can't make a profit selling to them, fine, don't. That's also part of how the model is supposed to work. But basically "we have to act like a crappy monopolist because we can't compete on price" just fails to impress me.

Gag orders (5, Funny)

Captain Spam (66120) | more than 5 years ago | (#26877443)

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...

Only a complete loon would agree to such terms (3, Informative)

John Hasler (414242) | more than 5 years ago | (#26877587)

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? (2, Informative)

chrome (3506) | more than 5 years ago | (#26877671)

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*

iPhone (0)

Anonymous Coward | more than 5 years ago | (#26877673)

Isn't this exactly what happened with the iPhone SDK?

Yes (1)

PPH (736903) | more than 5 years ago | (#26878181)

Its common in the utility business. Regulated utilities have little incentive to compete for customers in different service territories. So there's a natural tendency to share best practices, lessons learned, which products are crap and which are not among your peers. Because of this, vendors have maintained tight controls over contract terms involving NDAs as well as industry trade groups, where the customers might have a chance to make comparisons.

One interesting aspect of the utility business is that, while better tools and processes might save you some money, they rarely lead you to acquire larger shares of a market. Your market is defined by your assigned territory. The cost of poor software or operating practices is a very small part of your product's price, so your customers don't get a good signal about your efficiencies and modify their consumption accordingly. Because of this, if your vendors can keep you from looking at your neighbor's operations, or competitor's products, you can be kept in the dark, working with crap for a long time, none the wiser. Utility IT departments also tend to be refuges for (what's a nice way to say this?) the lower grades of the profession. Since its not a core competency of the business and metrics are difficult to accumulate across the industry, the poor performers rarely get exposed. And they have a lot to do with selecting the products.

Dark Times (1)

Genda (560240) | more than 5 years ago | (#26878777)

Face it folks, we've entered dark waters. Being a consumer today has become a dangerous and wholly nasty affair. As a society we've become sheep, and allowed our service providers to hold us hostage and hijack our infrastructure to ensure that their imposed dominion receives little or no resistance. Worse we've raised a couple generations of fat stupid people who will gladly give up their rights as long as you give them a Whopper(tm) and American Idol at the properly programmed times periods. This is no subtle form of insanity.

"For Profit Prisons", last year spent $15,000,000,000 a year to ramrod state legislation through, criminalizing everything from publicly passing gas to not using the regulation leash for your lhasa apso (yes that was sarcasm, however as a real example, recently a 17 year old Florida girl, an honor student with scholarships in hand and the brightest of futures, receive a mandatory 13 year prison sentence for the crime of driving her boyfriends mother to a house, which unbeknownst to her just happened to be the place the woman bought her crack.) Those very same "For Profit Prison" turn around and contract prison labor for 50 cents and hour. It's in their interest that it becomes very easy for you to go to prison, and that your stay is a very, very long one. You may want to consider that smell, that aroma of smoldering ham, is your hinny in a very hot place.

We're on the verge of turning 50-100 million people into refugees in this country. Lost jobs, lost homes, lost personal assets and resources, and private companies are building the debtors prisons to house them as we speak. We've allowed things (though ignorance or indifference) to get completely out of hand, particularly over the last 10 years. It is time to put things right, and it begins by telling corporations... you don't get to take away my rights. You don't get to invest in my suffering. You don't get to profit from my heartbreak. Most of all, you don't get plunder my existence or the existence of my posterity. It's time we took our lives back from the small minded, the shrivel hearted, and those among us who seem to have a congenital lack of compassion or conscience. We are responsible for the lives we lead. If ERP companies want to strangle their customers, then someone needs to stand up, and say, I'm building an ERP company that serves, where making good money is important, but second to making satisfies customers, and then lives up to that promise. It might be easier to design businesses that run as little fascist kingdoms, but it's not desirable, and it should be made very expensive for the CEOs and their accountants and lawyers. It should be made so expensive nobody even considers the option.

Where do I start? VMware... thats where.... (0)

Anonymous Coward | more than 5 years ago | (#26878897)

VMware EULA, which expressly forbids the publishing of comparative benchmarking information about their software vs other virtualization products, stinks. Its 2009 and we are still having these kinds of problems with vendors, thought I was back in 1970 again talking to IBM for a moment...

Theres another take on this over at the 360 blog here [blogspot.com] .

That blog makes the point that it is impossible to do proper modeling, performance mgmt, or capacity planning, without such information in the public domain.

AG

Clarification (0)

Anonymous Coward | more than 5 years ago | (#26878905)

Just to clarify, are we talking about Effective radiated power, the European Radio Project, the Economic Report of the President, Effective rate of protection, Enterprise resource planning, Ethernet Ring Protection, Effective refractory period, Event-related potential, Evoked (response) potential, Electronic Road Pricing, the Estonian Reform Party, the European Recovery Program, el Ejército Revolucionario del Pueblo, Exposure and response prevention, or Erotic Role-playing?

If we're talking about gag order, this must be Erotic Role-playing.

Biznez as usual (1)

ArhcAngel (247594) | more than 5 years ago | (#26879017)

Most companies will skirt the law if they can improve/protect their bottom line. I remember "stories" of a large OEM that manufactured PCs who had a super fast bus technology they had patented. A certain large OEM that produced CPUs requested the specs so they could make sure their CPUs were optimized for the new bus. months later the PC OEM discovered motherboards with their bus being sold by CPU OEM in the Asian market. PC OEM threatened to sue. CPU OEM said that if they sued then they could no longer sell their CPUs to them directly and they would have to get them from a reseller agent. PC OEM licensed bus to CPU OEM.

Didn't a AV vendor try this (1)

h2oliu (38090) | more than 5 years ago | (#26879095)

I vaguely remember about 10 years ago one of the anti-virus vendors included in their EULA that you can't say anything bad about their software without getting their approval first? I remember immediately dumping them for all software evaluations for any product.

About 3 years ago I moved out of the software evaluation business, so I don't remember which one any more.

Similarly, a long distance company tried to forcibly move me to their Long Distance service. Even going so far as to saying I had approved in on the phone (they couldn't produce the recording when I demanded it).

Guess who didn't get to bid to be our ISP.

The bean counters don't see these numbers, but they cost these companies real dollars.

That's easy to counter... (1)

GuyverDH (232921) | more than 5 years ago | (#26879331)

Print a mini-contract on the back of the check used to pay the bills with said company.
Essentially state that by cashing this check, the payee agrees to release the payer from any and all contractual gag-orders or other stipulations that would limit the payers ability to counter problems that payee's product / service / support may give.

Then when an issue arises, wave the cashed check as the contract. It's as legal as the hodge podge the vendor tries to shove down the customers throat.

Better yet, photocopy the contract, and release it to the public (before signing it).

Reason: Vendors preparing for war with Open Source (1)

Btrot69 (1479283) | more than 5 years ago | (#26879407)

There are several really high quality open-source ERP systems that have been getting some real traction in the press lately. OpenERP (http://openerp.com) and some of its derivatives come to mind. ERP vendors rake in $Billions. Their technology is old and clunky and their customers are almost universally unhappy. Until now, their customers have been captives to proprietary licenses, FUD, tradition, and even some bribery. Now, with the economy in free-fall, no one can afford to waste money on this ridiculously over-priced trash software. With open-source becoming the "cool buzz-word" and with more open-source friendly IT talent out there, I think we might see more companies take advantage of slow-times to restructure based on open-source software. ERP vendors know that they will eventually face this battle. I see these gag orders by the vendors are a preemptive move in this war. They want to be able to be able to spread FUD about open-source, but they first need to suppress the REAL disaster stories that involve their own software ;-)
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