Gartner: contract gagging clauses cost users dear

Analyst organisation Gartner Group is advising organisations to seek legal advice before they enter into 'gagging' contracts with...

Analyst organisation Gartner Group is advising organisations to seek legal advice before they enter into 'gagging' contracts with software companies.

Businesses should check the small print of their contracts and ensure that they do not sign anything unless a freedom of speech clause is present, Gartner recommended.

The advice has been issued after the New York's attorney general launched legal action against Network Associates in a bid to lift rules that prohibit it from talking about the company's software.

The case highlights a deep-seated problem in the IT industry. Many large software vendors, such as Oracle and Microsoft, make customers sign contracts that stipulate they cannot talk about the performance of the product they have purchased without prior consent.

"The vendors want to protect and control information about their products," commented Tom Austin, a Gartner research fellow. "They claim that they only want to ensure that misleading information isn't published, and they have every right to protect their property. However, Gartner believes performance information that the enterprise gathers isn't their [the vendor's] property."

An Oracle contract states: "You may not disclose results of any program benchmark tests without Oracle's written consent," while a Microsoft contract declares, "You may not disclose the results of any benchmark test to any third party."

However, Ronan Miles, chairman of the Oracle User Group (OUG) thinks that whatever gagging clauses are contained in contracts, information will always get out.

"As part of the user group, we're always sharing information on best practice. I can't possibly envisage any instance where Oracle could or would invoke any such clause," Miles said.

Gartner believes disclosure of such information could have saved organisations from software problems. "Some of the damaging information could have protected prospective buyers from selecting the wrong product," Austin said.

Austin advised companies to check contracts thoroughly before they purchase software, and recommends contract language that declares that the customer is free to discuss the vendor's products.

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