It's a classic. An on-stage software exec confidently gestures toward the demo of newly "announced" software, expounding on its life-changing features before a packed audience. But the software doesn't really work yet; it isn't even shipping until next year. So is this demo an act of fraud? That's an interesting question in light of the lawsuit Waste Management has filed against SAP.

We've all been in those packed audiences at conferences, only half believing what the software exec is promising. Such lightweight demos are generally accepted at those events. But does the situation change when the software exec is sitting in a CIO's office, showing a demo of software that could make or break a multimillion dollar deal, even with both parties understanding it's still months away from implementation? And who is responsible for ensuring the implementation performs exactly as shown in that demo?

There's been many lawsuits filed by angry customers claiming the software from SAP, Oracle, etc., doesn't work. Often the problem was poor implementation. But what's interesting about the Waste Management suit is the charge of fraud dating back to the promises made with the initial demos.

The nation's largest waste hauler alleges in a lawsuit filed March 20 that it was a victim of fraud by SAP, starting in 2005 with demonstrations in both the United States and Germany, involving high-level executives such as SAP Americas President Bill McDermott and former president of technology, Shai Agassi. Waste Management claims SAP said it was demonstrating mature, out-of-the-box, industry-standard software that didn't require customization. Waste Management claims the demos were of "fake, mock-up simulations of software that did not use the software ultimately licensed to Waste Management," and that these demos "were rigged and manipulated to depict false functionality and thereby deceive" Waste Management. It signed the contract and expected its new revenue management system to be fully functional by December 2007, but claims it can't even get past a small pilot project because the software simply does not work.

This is a lawsuit that gets to the heart of the validity, relevance, honesty, and responsibility of software demos. Vendors give them every day. But who holds them responsible for ensuring they perform exactly as shown?