SAP settles Waste Management lawsuit
Reports are coming in that SAP has settled the two year old Waste Management lawsuit for an undisclosed sum. Back in March 2008:
The software maker sold Waste Management computer programs that were supposed to be designed to manage tasks unique to U.S. companies that haul waste and handle recycling, with no customization required, the lawsuit said.
Those programs handle tasks including billing, waste logistics, container management, and on-board computing, according to a December 2005 press release from SAP America.
"Unknown to Waste Management, this 'United States' version of the Waste and Recycling Software was undeveloped, untested, and defective," the suit says.
As details of the lawsuit trickled out, it became apparent that the sales people had used a number of well known 'industry tricks' to entice Waste Management into buying what they saw as software unfit for their purpose and at a cost of more than $100 million. In its defense, SAP claimed:
Waste Management didn't "timely and accurately define its business requirements" nor provide "sufficient, knowledgeable, decision-empowered users and managers" to work on the project.
A classic case of project failure? We may never know. Buried inside a regulatory filing by Waste Management, the company said:
In April 2010, we settled the lawsuit, receiving a one-time cash payment, and all parties dismissed their claims with prejudice.
So it's not quite all over but you can be reasonably certain this one has been put to bed. The burning question is how much did SAP fork over? We may never know. SAP did not make an official announcement which would have been required if the amount in question was significant. More important, this is one more piece of SAP's recent legacy past that it can put to bed in advance of its upcoming annual customer conference which starts May 16th.
Much of SAP's credibility going forward depends on how good a show co-CEO's Jim Snabe and Bill McDermott put on, how convincing they are and whether the product roadmap looks sufficiently solid for buyers to continue SAP investments. Taking this problem off the table will be a relief and another example of the company clearing the decks.