The Importance of Indemnification
We recently announced indemnification coverage for intellectual property infringement on each of the more than 160 open source products included in the OpenLogic Certified Library. While most media coverage of our announcement has been overwhelmingly positive, a few have questioned the relevance of indemnification. What these individuals don’t understand is that enterprises specifically ask us for indemnification coverage. In fact, eight out of every ten sales opportunities in which we’re involved require indemnification at some level to move ahead.
As more and more Global 2000 companies turn to open source as a viable alternative to all kinds of commercial software products, they examine open source products using a familiar set of ground rules like price, support and indemnification. The fact of the matter is that Global 2000 enterprises are expected—by shareholders as well as executive management—to exercise a reasonable standard of care when it comes to the software tools they acquire, whether open or closed source. Failure to do so can have serious repercussions down the road.
It’s one thing to have a couple of open source products brought into the enterprise by a developer. It’s another thing altogether when an enterprise forms a clear strategy based on the significant cost savings and productivity increases that can be achieved by proactively moving to more open source. And more open source is a good thing as long as the products are right for the job and the benefits outweigh the risks.
When this happens, large enterprises look for the same assurances they’re used to getting from commercial vendors: they want SLA support agreements, confidence that the software will work they way it’s intended to, and indemnification against potential IP risks. This is where OpenLogic bridges the gap. We provide the products and services enterprises expect from commercial vendors, including a library of over 160 certified open source products.
OpenLogic provides a “security blanket” for open source so that enterprises can either adopt open source with confidence or step on the gas with a more aggressive strategy. Dana Blankenhorn raises some interesting questions about indemnification coverage, but our experience with the Global 2000 tells us that it’s in integral part of our solution.
Hi Steve, thanks for leaving a comment on my blog and apologies for not responding until now. I’ve posted a complete response here, but here’s some of the highlights:
Which of these two tires would you rather have on your car:
[Tire Company A] If one of our tires randomly bursts, causing you to lose control and injure a 3rd party and you get sued, we’ll provide you legal counsel during the trial and even pay damages awarded against you for up to 4x what you paid for the tires.
[Tire Company B] We run 190 tests on all our tires to ensure product quality and specifically pay attention to manufacturing issues that could lead to tires bursting.
You said the tires that did both A & B right ;-)
So, what’s more important, legal cover after the fact, or ensuring the OSS product you’re using has gone through a rigorous process to identify and eliminate sticky IP issues.
I couldn’t figure out whether your 42-point certification process actually does IP-related scrubbing or whether it’s mainly focused on technical integration and dependency issues. But if OpenLogic does do scans for IP issues and fixes them, then I say make a bigger deal about it. Get the word out to your customers; educate them on why a CYA approach of requiring indemnification doesn’t really address the problem. (And seriously, if the customer is bigger than OpenLogic, they’ll likely use their own legal team wouldn’t they??)
We’ve done this with WAS CE customers and they absolutely understand and value the rigorous IP-related work we do.
Reconsidering OSS indemnification…
With Microsoft agreeing not to sue Novell SLES Support Subscription customers for patent infringement issues, maybe it’s time to reconsider the value of OSS indemnification?
I’ve stated previously that indemnification is not as valuable as …
Reconsidering OSS indemnification…
With Microsoft agreeing not to sue Novell SLES Support Subscription customers for patent infringement issues, maybe it’s time to reconsider the value of OSS indemnification?
I’ve stated previously that indemnification is not as valuable as …