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Business Objects Reseller Sues Over Unpaid Commissions

A former Business Objects reseller is suing the vendor for allegedly unpaid commissions, an issue the ex-partner calls the "tip of the iceberg" of partner frustrations over Business Objects' competition with its channel.

Creative Technology and Training Solutions, based in Shelby Township, Mich., filed suit against Business Objects in January in Michigan’s Oakland County Circuit Court. The lawsuit seeks $330,000 in product commissions on five deals that Creative Technology said it is contractually owed but for which it was never paid.

Michael Ward, senior partner at Creative Technology, called the commissions issue one of several disputes his consultancy now has with Business Objects. He complains of being undercut in deals by the vendor’s direct sales force and being pressured by the vendor to shut down his training business. “There are many current partners and former partners in the same boat,” he said. “We were all reluctant to rock the boat because if you make any waves at all, they drop you as a partner.”

Business Objects casts Creative Technology as a disgruntled gadfly and filed a countersuit last month claiming licensing breaches and trademark infringements by the consultancy. This case is the only currently pending litigation about commission nonpayment, according to Business Objects. “We believe that this dispute with Creative Technology is an isolated matter,” said Business Objects spokesman Peter Olson.

But a handful of former partners echo Ward’s comments about a contentious relationship with a partner they once valued. One issue fueling the schism is Business Objects’ ongoing crackdown on unaffiliated, third-party training businesses.

“They threatened to put me out of business last summer,” said George Peck, president of The Ablaze Group and the author of a half-dozen reference books on Crystal Reports.

Ablaze, with headquarters in Evergreen, Colo., ended its alliance with Crystal Decisions a year or so before Business Objects’ 2003 acquisition of the vendor. Ablaze renewed talks with Business Objects in the middle of last year about becoming a sanctioned training partner. But Business Objects rejected the training materials Ablaze created and demanded it stop using them.

For now, Ablaze continues using its materials and is waiting to see if Business Objects will take further action.

Ken Hamady, another unaffiliated Crystal Reports trainer, launched a crusade against what he views as Business Objects’ unreasonable attempts to use its software licensing to block all unauthorized third-party training. Hamady’s Web site includes a collection of communications among VARs, user groups and Business Objects detailing the dispute.

Business Objects’ spokesman acknowledged that the company is herding trainers toward its affiliate program, though he stopped short of saying it will take holdouts to court.

“We’re trying as much as possible to make sure that we have all independent trainers certified,” Olson said. “We’re trying to make sure that no one is in violation of their specific contract with Business Objects.”

Of course, plenty of Business Objects’ partners remain happy. B.I. Builders, a services firm in Seattle, said it hasn’t found itself competing for sales and services deals—it concentrates on the midmarket and stays out of the enterprise accounts on which Business Objects focuses its direct attention. “It’s fairly cooperative and has been good for us,” said B.I. Builders President Peter Buckley. “The goal for Business Objects, as I understand it, is that they want their professional services organization to work on long-term deals with enterprise customers.”

Still, Business Objects will need to take care not to alienate partners. One reseller said, “When we joined Business Objects, it was a smaller company. They needed partners. Now that they’ve grown bigger, they want to grow their own services revenue, so they’re stepping on their partners. It’s typical.”

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