South Africa's state-owned energy firm to appeal after court rules Oracle does not have to support its software
- Reference: 1617901392
- News link: https://www.theregister.co.uk/2021/04/08/eskom_set_to_appeal_court/
- Source link:
In a case that dates back to 2019, Johannesburg High Court dismissed an attempt by Eskom to compel the global software giant to renew support services until April 2022.
[1]
The decision leaves the state-owned electricity company reliant on an "interim risk mitigating processes... to reduce the risk of its operations being disrupted."
The company, which serves around 6.2 million direct customers, said it had "assessed the risks in the event of Oracle withdrawing technical services support."
[2]
It also said Oracle's services were "quite essential to some of Eskom's crucial operations."
The utility is known and unloved in its home country for its penchant for "load shedding" - planned load reduction by switchoffs in various geographies across South Africa - which it [3]describes as "a controlled option to respond to unplanned events to protect the electricity power system from a total blackout".
Systems supported by Big Red under a five-year agreement signed in 2017 include those for online sales, logging supply faults, managing control grids, and load monitoring.
According to the court application, [4]reported in the South African press , Oracle conducted a software licensing audit of the company in 2019 and concluded it was using more software than it was entitled to.
Oracle first claimed the users had underpaid by around R7.3bn (£370m, $500m), which was disputed by Eskom.
Eskom CEO André de Ruyter reportedly wrote to Oracle describing its claim as a "sharp dispute" and noting that the software firm had subsequently reduced it to R600m (£31m, $41m) and then R400m (£20m, $28m).
Eventually, the amount claimed by Oracle was reduced to just under R400m. As far as Eskom is concerned, the amount due to Oracle is approximately R166m in total.
"The regional and national offices appear to believe that by flexing Oracle's muscles, they are displaying strength. This is not how disputes of this nature ought to be resolved," de Ruyter reportedly said.
[5]In a statement following the court ruling , the company said it offered to pay the R166m and proposed a verification and court process in order to end the dispute.
"When Oracle rejected this approach, threatening to terminate its services to Eskom, Eskom approached the high court to compel Oracle to continue providing the technical support services for the duration of the agreement until April 2022," Eskom said.
Since the court dismissed the application, the company said it planned to launch an application for leave to appeal.
"Eskom finds regrettable the manner in which Oracle has handled the matter, and would like to assure the people of South Africa that as an entity dealing with public funds, Eskom will pursue all legal avenues and will not be bullied into paying any monies outside of the legal processes," the company said.
[6]
Oracle has been approached by The Register for comment. ®
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Sadly most of El Reg's commentards know this is the cost of touching Oracle products.
They don't even give you complementary tubes of KY.
tubes of KY
They're on the invoice somewhere.
e.g. "Acceptance Facilitation" or "Bulk Load Assistance"
R7.3bn down to R400m
The tumbling demand figure is just like that of a ransom/extortion demand from a gang of criminals, going down when the mark refuses to pony up - if the original figure was legitimate, then there is no need to revise down the figure.
Re: R7.3bn down to R400m
It does rather question the credibility and quality of their software audit software. They must be eating their own dog food.
Contract...
I expect that Oracle's duty to maintain was voided when customer breached the contract with the licensing fraud.
Re: Contract...
Was it?
I am legitimately curious.
One one side, you buy a licence and support contract for something, and that support is due.
Then other people install too many copies, unlicenced; you are at fault for sure, and the supplier can seek reparations.
But can they actually refuse to support the bits that you use legitimately, with your paid-for contracts?
Or can they only refuse to support the "extra" licences that are under dispute?
Re: Contract...
Fraud suggests intent. Good luck licensing Oracle software correctly even with the best will in the world.
Disclosure: I've managed to get Oracle to admit they got their own licensing rules wrong, and led negotiations that cut an Oracle bill from around $2bn to "yes, you're already fully licenced, and you won't actually need all of those."
I've managed to get Oracle to admit they got their own licensing rules wrong
Wow. Well I'd treat that knowlege like gold dust. I'm sure there are many (all?) of Oracle's customers that would like to know more. You could make a mint.
I'm... not sure what to think here.
On the one hand, it sure looks like Oracle was trying to shake them down. Absolutely not cool.
On the other hand, imagine being a service provider involved in a billing dispute, and being told you had to keep supporting the product that you might not have been (fully?) paid for.
Maybe Oracle should show the PROOF of how much software Eskom was entitled to, and the proof of how much they were using. Though the dramatic decrease in the supposed difference reminds me of Maxwell Smart - "Would you believe me if I said you owed me R7.3bn? No? Would you believe R400m?"
Lawsuit
What happened with the Chugh vs Oracle lawsuit?
I heard about it here, read the court complaint (well worth the time BTW: https://regmedia.co.uk/2019/02/13/oracle_lawsuit_chugh.pdf - brutal!), and nothing since (that I've found). A brief search for the Case (Case No.: 5:19-cv-764) turns up near-zilch.
Settled out of court? Pending? Anyone heard anything?
Chugh v Oracle
It's still open and stalled since 2019. I hate to speculate why but I suspect the plaintiff ran out of money to bankroll the case, or gave up pursuing it.
C.
Let me guess...
The audit happened right after a nice conversation with Oracle sales about how Eskom should move everything to Oracle cloud.
Don't blame Larry
Blame Covid-19. Larry needs a new island, and with the pandemic raging, the demand for islands is sky high. As anyone who has tried to buy a CPU or GPU lately can tell you, when the demand is high, the prices are even higher. Larry needs all the money he can steal earn. After all, he can't spend every penny on the island, he still needs to eat.
Pity the poor multi-billionaire - so many demands on your wallet, so few Wilsons* to spend.
* $100,000 USA paper bill only printed in 1934. It had a picture of Woodrow Wilson on the front.
Well It's the Minions
So the minions are practicing their thievery again.