End User Bill-of-Rights

This End-User Bill of Rights was adapted by the ASCDI for the benefit of our customer community as a means of establishing equitable industry standards for access to recertification, software revision levels, engineering changes, parts, bug fixes and maintenance services.  

Background

Many end-users find that after they acquire IT equipment, use it for a couple of years and then attempt to sell it on the secondary market, their equipment has a limited value because of policies in effect by the Original Equipment Manufacturer (OEM) of that equipment. These policies act as roadblocks that prevent the effective re-marketing and ownership transfer of used high technology equipment. Some of the tactics employed challenge the very concept of a free market and would not be tolerated in market sectors outside of technology. Blocking the first owner’s ability to transfer equipment by limiting the second buyer’s access to recertification, software, engineering changes, parts, bug fixes and maintenance services precipitates a sharp drop in the residual value of the customer’s investment by limiting the appeal of used equipment. Buyers eventually have to pay higher prices for equipment because used equipment is perceived as too risky to buy on the secondary market. Owners of equipment looking to sell their equipment to offset the cost of new purchases are often disappointed by the lack of interest in their equipment which is brought about by a manufacturer’s refusal to support secondhand equipment. In extreme cases, used equipment will be scrapped because it cannot be re-sold without workable maintenance options.

As high tech markets consolidate, the only effective competition for many OEMs is the older equipment they themselves have made that finds its way into the secondary market. For this reason many OEMs employ policies that limit their customers’ options when it comes to software, engineering changes, parts, bug fixes, maintenance services and upgrades which ultimately drive potential second user customers to buy only new replacement equipment.

These practices inhibit the free movement of equipment from business to businesses, business to third-party hardware dealers, and third-party hardware dealers to end-users. They destroy residual values for lessors. And, they limit access to products and services that are otherwise readily available from these very same manufacturers. In a word these practices are anti-competitive.

The ASCDI has worked behind the scenes for many years to help our customers obtain software engineering changes, parts, bug fixes, maintenance services and upgrades at competitive cost effective prices to foster the growth of secondary markets in an attempt to promote open competition and stable markets. In so doing, we have developed the “End-User Bill of Rights” which we feel every customer should insist on from OEMs that they do business with. It is only when restrictions on access are lifted and markets are allowed to find their own equilibrium that technology markets will truly be free and all end-user customers will be well served.

The ASCDI “End-User Bill of Rights”

  • A Company that owns equipment has the unlimited unrestricted right to do with it sees fit without regard to future use, resale or disposal. 
  • Special purpose software furnished by a manufacturer integral to the operation of a machine (including so called “machine code” as well as Operating Systems), should be granted an “unlimited license to use for the life of the equipment”. This software is not to be copied or re-sold but to be used by the owner and each subsequent owner of a machine for the purpose that the machine was originally intended. Any scenario where a machine is sold but the software is only available with a limited use non-transferable license is inherently anti-competitive because it restricts the movement of equipment that has been legally purchased and for which the manufacturer has already been paid. It must be recognized that hardware without the software that runs it is essentially worthless.
  • Recertification costs and policies for all equipment should be spelled out in detail, posted on a manufacturer’s website and made part of all sales contracts when equipment is originally sold. Customers should not settle for the illusionary “we have a recertification program for used equipment” without having access to the details of that recertification plan.
  • The conditions under which a new software license is necessary should be spelled out up front, prices disclosed and made part of the of the original purchase contract.
  • All diagnostic software required to maintain a machine in accordance with manufacturer’s specifications should be included with the purchase of the machine and should be transferable to any subsequent owner when a machine is sold. This will broaden competition by allowing a secondary end-user to competitively choose a maintenance provider other than the manufacturer.
  • A list of all internal parts and prices for these parts should be listed on a manufacturer’s website. Increases to these prices should be limited to the cost of inflation. Parts prices should not be increased when a manufacturer designates a product End-of-Life. 
  • Provided it is not modified a machine that was under a manufacturer’s maintenance agreement should automatically qualify to be field re-certified for manufacturer’s maintenance at a second user without having to be sent it “back to the plant” or without having to have any of its parts replaced. 
  • Leasing companies should have the same ownership rights as end-users allowing them to move equipment they own along with software licenses that may accompany that equipment so long as the equipment is under a manufacturer’s maintenance agreement, without having to pay re-certification or transfer charges.
  • All manufacturers should adopt a “banding” policy which provides for the manufacturers to band (or seal) equipment which will then allow the equipment to be moved to a second user where the seal may be opened by the manufacturer and thus automatically qualify it for that manufacturer’s maintenance.

     

  • Manufacturers should accept for maintenance without special charges or penalties, at established reasonable prices, any machine that contains only manufacturer’s parts that has not been modified and can satisfactorily run manufacturers diagnostic tests.
  • End-user customers should have the right to resell machines with built in (pre-loaded) machine level code and third-party maintainers should have the right to repair machines and have access to machine level code to reload such code if necessary.

 

Conclusion

Our goal is simple, we wish to promote competition, which will keep prices down and reward quality, innovation and effective service. Second user sales and third-party maintenance extend the useful life of IT equipment and guard against the planned control of IT assets by OEMs. An incalculable amount is being wasted as end-user customers are forced to adhere to policies which bloat manufacturer’s profits while inflating the prices paid by customers.

Moreover restrictive policies are anti-competitive and are the antithesis of free global markets which many of these same OEM’s say they stand for.

The time has come for high tech end-users to demand that OEMs stop blocking access to recertification, software license, engineering changes, parts, bug fixes and maintenance services and help create an environment that will assist in the development of free open competitive secondary markets.