The Hindu Business Line : Nissan in row over software access to Satyam

Chennai, Nov. 20 Companies using third party software to build solutions for clients, beware! There could be problems if legal issues are not properly looked at from all directions. An example of this is the ongoing dispute between Nissan America and Software AG, Germany, on whether Satyam Computer Services’ access to the software of the German company constituted a breach by Nissan.

Software AG has demanded that Nissan pay around $3,000,000 for access of its software by Satyam, and additional demands were put forth for use of the software by Nissan Canada and other third parties. The auto major has sought a declaratory judgment from a US District Court that would make Software AG stop demanding compensation.

A senior Satyam official said there was no ‘implication for the company.’ It uses the German company’s software tools to build new solutions and then tests in conjunction with Nissan. Satyam has a huge offshore centre in Chennai doing ‘mission critical solutions’ for Nissan. The Hyderabad-based software company’s access to Software AG software to perform the functions was set forth in an agreement entered into between Nissan and Satyam on February 14, 2006.

“This does not violate the terms of Nissan’s Licence Agreement with Software AG, the auto major told the court in the complaint,” a copy of which is available on the Web.

Nissan develops and implements business applications, while IBM continues to maintain the systems software that runs the applications. A portion of these services over which Nissan resumed control was delegated to Satyam, which assists Nissan in maintaining and enhancing business applications. This includes Nissan’s Order Management Applications.

When asked on implications for Satyam from this controversy, Mr Subu D. Subramanian, Director and Senior Vice-President (Manufacturing and Automotive Business Group), Satyam, said, “This will not have any implication for Satyam.”

Normally, in case of offshore engagements, customer provides access to their computing facility to work remotely from offshore.

Customer will negotiate with the respective software licensing vendor to provide these connections to its partners like Satyam. ‘The details of this contract are purely between our customer and their software licensing vendors. On similar count in this case, the agreement is between Nissan and Software AG,’ he said. With respect to Software AG software in use at Nissan, IBM continues to be Nissan’s Designated Outsource Vendor who can install the product and any updates or changes, maintain the product and perform any systems operations functions necessary to ensure that product can be used by Nissan. Satyam is not permitted to perform ‘systems operations functions,’ Nissan said in the complaint.

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