End User Licensing Agreements (EULAs) have always been “sketchy,” according to Info-Tech Research Group Inc. lead analyst Darin Stahl. “If people read the EULA in every piece of software they install, it would scare them to death.”
Early editions of Microsoft Corp.’s Studio Visual Basic development tools, for example, suggested that anything end users created became the property of Microsoft because it was a derivative of their tools.
“If I’m an enterprise and I’m developing something that’s new, unique and startling in the hydrogen fuel space, all of a sudden I have Microsoft as an (intellectual property) party,” he said.
Past licences from strong niche players in the financial services industry that control large administration systems have also made Stahl “choke.” Changes to screens, source code used to run in compile code, any derivative works used internally became their property, he said. The licence agreements also stipulated backing up all code to tape and sending it to them on an annual basis.
Enterprises must spend more time reading EULAs and understanding their restrictions, suggested Stahl, especially in the development space. “It’s important to know what they’re buying,” he said.
“There are things that I do from a coding and building technique where I might need to actually firewall off pieces or code objects from what’s being called or run in the application that I’m assembling to protect myself from the EULA,” he said.
EULA headaches are currently reported by independent trainers and courseware providers for report management software Crystal Reports , who argue the licenses are putting them out of business and end-users may experience higher costs as a result.
Crystal Reports licensing has been a “never-ending source of entertainment” since 2005, said Stahl. “They’ve been doing some strange things with their licensing that is fairly restrictive and something I haven’t seen in other dealings or software licensing in a long, long time.”
The reporting software has seen several owners over the past decade, but was recently acquired by Business Objects S.A. in 2003, which was subsequently acquired by SAP AG in 2007.
In 2005, Business Objects issued cease and desist letters to independent courseware providers for including screen shots in their materials, which the company argued was a violation of copyright. Independent trainers also received letters of warning indicating their need to purchase a licence in order to continue conducting their training programs.
“All the little training companies around the country got cease-and-desist letters saying if they wanted to continue training Crystal Reports, they needed to pay for a licence. It was thousands of dollars and included a bunch of restrictions,’” said independent consultant, trainer and courseware maker Howard Hammerman.
Many community colleges as well as larger training firms including New Horizons Worldwide Inc. and Executrain were affected by the changes, and many also chose to ignore Business Objects, according to Hammerman.
After submitting his manuals to Business Objects for review, Hammerman received an invitation to take part in an authorized program that would allow him to continue to sell the manuals with screen shots, provided he paid a royalty fee of $35 for each manual sold.
“We were selling it on Amazon for $60 a manual. Amazon takes 50 per cent, so that means we were netting $30. The printer costs were about $15, so we had $15 in our pockets. Business Objects wanted $35,” he said.
Hammerman agreed to enter both the authorized trainer and content provider programs. “Of course, my sales fell like a stone. In September 2007, our total sales were four manuals, going down from easily over 100 every month,’” he said.
He left the authorized programs in 2007, but continues to train through Webinars and as a guest at facilities that handle their own licensing.
Mark Myers, president of independent courseware provider Vision Harvest Inc., also received an invitation to join the Business Objects authorized content provider program in 2005. Unlike Hammerman, Myers rejected the company’s offer and continued to sell manuals with screen shots without paying the royalty fees.
Part of the classroom licence agreement stipulated that trainers could only purchase books from authorized content providers, whereas the authorized content provider contract forbid providers from selling books to anyone who did not buy into the classroom agreement, he explained.
“I kind of ignored them and that’s going on four years. Every year, at the end of the year, they tend to send me a legal letter stating to stop selling the books and it doesn’t really go anywhere,” he said.
Myers doesn’t have a problem entering a relationship with Business Objects, but said their offer would “basically put me into bankruptcy if I did it.”
Upcoming changes to the Crystal Reports EULA may end the potential for a relationship. Business Objects recently e-mailed Myers an advanced “snippet” of proposed EULA changes, which will prohibit the use of screen shots in course materials if royalties aren’t paid, he said.
But Business Objects has a history of changing its licensing, Myers pointed out. The 2008 initial release said you couldn’t buy the software and use it to provide training or consulting services, he said. “That’s a whole other issue … that you cannot be a consultant and use their software. It’s a strange deal, but then they took it out.”
Myers plans to shift away from Business Objects and support other reporting tools, such as Microsoft Reporting Services, over the next few months.
According to SAP, the new Crystal Reports EULA will “actually reduce the restrictions and clarify the use of screen shots and word marks.” The company also plans to make changes related to the classroom license agreement.
“We are liberalizing training by enabling a training organization to use a single copy of the licence on a training workstation without having to purchase a classroom license agreement or be out of licence compliance as in the past. There is no need for another licence to run even a commercial training course. This change encourages training on our product and makes it easier for organizations to do so,” said SAP in a statement.
SAP is also “making it easier for companies to understand what ‘external distribution’ means” and how to get a licence for external redistribution. “The new external redistribution licence is a single, fixed-price licence where it used to be a royalty program requiring a contract,” said SAP.
Independent trainer Ken Hamady supports Mark Myers and actively blogs on the Crystal Reports saga. “Before two years ago, there was no requirement you had to do anything. You didn’t even need to ask permission,” he said.
Crystal Reports is making it very difficult for third parties to provide training and materials, ac