Be careful about third-party solutions to deployment costs

In many cases, offers from third-party vendors that sound too good to be true really are.

That’s the lesson from this recently settled legal dispute between IBM and Neon Enterprise Software.

Neon created and sold a product called zPrime, which allowed certain IBM mainframe software to be run on specialty processors within the mainframe that didn’t trigger the same capacity-counting rules as a server’s primary processors — that let users avoid paying for software licenses from IBM they would have otherwise needed.

In response, IBM began threatening Neon’s customers with legal action, claiming they were violating their license agreement with IBM. Neon sued IBM to stop the threats, and IBM countersued, claiming the company was interfering with the contractual relationship between IBM and its customers.

Neon recently settled the suit and agreed to pull zPrime from the market. That means many businesses could see an unexpected increase in the money they must pay to IBM for licenses.

Turning to third-party providers for support contracts or other services can be dangerous for businesses. For example, some software and hardware providers limit their customers’ ability to get support from third parties.

To avoid conflicts, here’s some advice from law firm Scott & Scott, LLP:

  1. Closely read license agreements with software providers and make sure you fully understand the requirements when it comes to third parties
  2. Closely read statements of work and service agreements from third parties so you know exactly what they do and see if anything could cause trouble, and
  3. Consult with counsel — even if something seems it could be a problem, that may not necessarily be the case.

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