Unethical vendors becoming a bad joke

In an increasingly competitive market, suppliers with a high social responsibility rating will have the last laugh

Written by Martin Veitch

For journalists, ethics is a county east of London famous for opinionated cabbies and low-rent celebs. Or so the old joke goes, but it’s not just the Fourth Estate that plays fast and loose with moral principles; IT vendors also have plenty to live down to.

The recent brouhaha over SAP’s TomorrowNow third-party maintenance unit and Oracle is a reminder that skulduggery has always gone on. For those that have missed it, in March, Oracle alleged “corporate theft on a grand scale”, claiming SAP had illegally downloaded documentation. In a mea culpa last week, SAP chief Henning Kagermann said, “Even a single inappropriate download is unacceptable from my perspective”.

However, Kagermann rejected the idea that SAP had gained access to Oracle intellectual property and said he had been “surprised and disappointed” by Oracle’s failure to alert him of the problem before pursuing a legal solution.

So far, so normal: when two companies compete head-to-head on a business front, they are often quick to call Messrs Sue, Grabbit & Run at the first whiff of a misdemeanour. Sceptics might feel that, in this case, the War of the Downloaded Documents was preceded, indeed caused, by the Battle for Business Applications.

Before Oracle supporters get too high up on the moral high ground they should look to the firm’s own charge sheet and cast minds back to 2000, when private investigators were authorised to rifle through a pro-Microsoft group’s rubbish in hopes of finding proof of murky connections. Even when caught out, Oracle chief Larry Ellison was not short of bluff. “It’s absolutely true we set out to expose Microsoft’s covert activities,” he said at the time. “I feel very good about what we did.”

Then when the HP pretexting scandal broke last year and it was revealed that the granddaddy of Silicon Valley had authorised spying on board members, journalists – and the families of each – the Oracle garbology project appeared pretty small beer by comparison.

There are many other examples of shady practices among IT suppliers and a common thread running through them is that even the blackest mark on a reputation would appear to have no effect on short-term sales. What is less clear is the long-term effect on reputation caused by these media storms.

As corporate social responsibility starts to become less of a checklist item and more of a desired indicator of ethical conduct, that could change. And as companies come to terms with this new transparency they will, in turn, judge their suppliers by the same codes of conduct and with the same stringent scrutiny.

Those that show a clean record in terms of handling privacy, confidentiality and ethical relations will be favoured, especially in technology markets that are increasingly commoditising.

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