Pay-per-usage applications `a legal minefield’, warns Unigraphics

Software suppliers could be heading towards a legal minefield when they try to lease out their products on a pay-per-usage basis, a senior industry executive warned this week. Speaking at the annual conference of engineering software giant Unigraphics Solutions in California, director of product and operations Chuck Grindstaff said Unigraphics was seeking detailed legal advice […]

Software suppliers could be heading towards a legal minefield when they try to lease out their products on a pay-per-usage basis, a senior industry executive warned this week.

Speaking at the annual conference of engineering software giant Unigraphics Solutions in California, director of product and operations Chuck Grindstaff said Unigraphics was seeking detailed legal advice over liability issues that could arise if such arrangements – commonly known as application service provision – went wrong.

The potential problems arise from the involvement of third parties running regional server installations, which may become essential if the bandwidth limitations holding back the most sophisticated ASP offerings are to be overcome.

But if local servers fail or are mismanaged and a customer suffers, the issue of who is liable, and under what country’s jurisdiction remains unexplored legal territory.

`You can dole out licences over the net,’ said Grindstaff, `but if the licence is not served properly by whoever has the power to turn it on and off, what is the legal situation – who sues whom?’

ASP arrangements are popular among software users that experience peaks and troughs in design software requirements. They also can provide more efficient licencing arrangements for multinational companies wishing to use existing licences `overnight’ in design offices in time zones where designers are still at work.

The confusion over who is liable and the question marks over national legal jurisdiction look set to continue to hamper internet service provision.

But Unigraphics said it was also sensitive to the needs of its dealer and distributor networks if ASP services grow.

`We have to make sure that this does not interfere with our distribution network,’ Grindstaff added, predicting that ASP services, probably starting with its iMAN collaborative engineering system, would start within 12-18 months.

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