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Firm says Epicor wants to 'monopolize' services market for its ERP software

Chris Kanaracus | April 18, 2013
An IT services firm recently sued by Epicor has responded, calling the claims "unwarranted" and part of an attempt on Epicor's part to "monopolize" the services market for its ERP (enterprise resource planning) software.

In December 2012, a former controller of Epicor, Laura Modlin, interviewed for a similar position at Alternative, according to the response.

"Alternative's third party recruiter, unbeknownst to Alternative at the time, shared with Modlin certain aspects of Alternative's overall success, growth, and profitability," it states.

Subsequently, Alternative's profitability "became known to Epicor" and sparked the lawsuit as well as an effort to force Alternative out of the Epicor support business, the response alleges.

After Epicor filed the suit, company officials contacted Alternative employees and offered them jobs, according to Alternative's response. Epicor also reached out to Alternative customers and contractors, telling them that Epicor would not work with Alternative "in any manner," the filing adds.

Epicor has "attempted to coerce its customers into using only Epicor Authorized Partners to provide services for the Epicor 9 platform," despite the fact that customers' contracts allow the use of consultants such as Alternative, "by threatening to void the customer's warranty if the customer chooses to use Alternative," according to the filing.

Epicor also allegedly began requiring independent contractors to stop working for nonauthorized Epicor partners. One independent contractor Alternative had been working with quit an ongoing project as a result, causing Alternative "significant damages" as it searches for a replacement, according to its response.

Ultimately, Epicor has a "stranglehold" on the market for Epicor 9 services and therefore, "a dangerous probability of achieving a monopoly for those services that are otherwise lawfully permitted under the Copyright Act," the filing alleges.

While focused on ERP implementation and development services, the Epicor-Alternative dispute has some echoes of the ongoing debate over third-party software maintenance, in which a customer goes off vendor-provided support and contracts instead with a company such as Rimini Street for bug fixes, regulatory updates and tech support.

Third-party maintenance providers say they charge much less and deliver better service, although customers no longer receive ongoing new releases of the software.

In 2007, Oracle sued SAP and its former subsidiary, TomorrowNow, which provided lower-cost support for Oracle software. SAP admitted liability for wrongdoing on the part of TomorrowNow employees, but the case is still tied up in appeals by both parties.

Oracle is also suing Rimini Street, which has denied wrongdoing and says it acts within the boundaries of customers' license agreements with Oracle. Rimini has countersued Oracle, alleging that it is trying to quash the third-party software support market.



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