Powerware Lockout Software Locks In Customers

In 2003 the U.S. Air Force held an open bidding for a post-warranty service contract on about $80 million worth of Powerware uninterruptible power supply (UPS) equipment it had purchased in 2001. At that meeting, Air Force officials and the other bidders were surprised when Powerware informed them that proprietary service software is required to fully maintain the UPS equipment and that Powerware would not provi

In 2003 the U.S. Air Force held an open bidding for a post-warranty service contract on about $80 million worth of Powerware uninterruptible power supply (UPS) equipment it had purchased in 2001. At that meeting, Air Force officials and the other bidders were surprised when Powerware informed them that proprietary service software is required to fully maintain the UPS equipment and that Powerware would not provide that software to any of the third-party bidders or to the Air Force itself. As a result, the Air Force had no choice but to award the contract to Powerware, costing U.S. taxpayers more than $20 million over what some of the other firms said they were prepared to bid.

The U.S. Air Force is far from the only Powerware customer who has found itself stuck with a bigger service bill than expected because of this lockout service software. Testimony in a lawsuit brought against third party UPS maintenance JT Packard by Eaton Powerware (Eaton acquired Powerware in 2004) shows that many private sector customers have found out about the service software requirement only after they decided to start servicing their UPS systems themselves or considered a third-party service firm. And it seems clear that the only real purpose of the software is to lock out competition for Eaton Powerware's OEM service business.

The lockout software is essentially a laptop-based replacement for the physical instrumentation and controls that used to come on three-phase UPS equipment. Routine maintenance such as battery servicing can be done without the software, but it is required for getting complete internal readings and calibrating performance settings. By denying that customers have the right to this "proprietary" software, Eaton Powerware guarantees itself the ability to keep charging high prices for post-warranty service.

What makes some customers even madder than Powerware's refusal to provide the software is the total lack of information about it when they purchased the equipment. "Even now you don't see a word about it in their sales literature or on their website," says one reader who encountered the Powerware lockout surprise while working for a financial institution. "How can it be legal for them to hide the fact that they will not let you have this tool that is needed to properly use and maintain the equipment you're buying?"