IBM Sued Over Software Licenses

Wynn Las Vegas says Big Blue is guilty of overcharging by $9.7 million for rights to use its Maximo product.

Paul McDougall, Editor At Large, InformationWeek

June 28, 2010

1 Min Read

Casino giant Wynn Las Vegas has filed a lawsuit against IBM, claiming the tech vendor is overcharging it for software used to track maintenance activities and supplies at its Sin City properties.

Wynn claims IBM is wrongly insisting it pay for full licenses for its Maximo software, even for employees who are only casual users of the product. Wynn said IBM is pressing it for about $9.7 million in additional licensing fees to which, the casino operator claims, it's not entitled.

"According to IBM's apparently revised understanding of Wynn's license, every Wynn employee who had been using Maximo—including every housekeeper who merely used the software to report and follow up on guest maintenance requests—was required to have his or her own multi-thousand dollar software license," Wynn said in papers filed last week in federal court in Nevada.

Wynn operates the Wynn and Encore hotels on the Las Vegas strip. All told, it claims IBM is insisting it purchase about 2,000 additional Maximo licenses, ranging in price from about $2,300 to $4,600 each.

"IBM's unwavering demands have created an urgent situation of legal and financial uncertainty for Wynn that calls for judicial intervention," said Wynn, which is suing IBM for deceptive trade practices.

IBM acquired the rights to the Maximo product line through its $740 million buyout of MRO Software in 2006. The company currently sells the software through its Tivoli unit. IBM officials were not immediately available for comment and the company has yet to file a formal court response to Wynn's allegations.

IBM shares were up .83%, to $128.17, in midday trading Monday.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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