IBM was dragged into court on Monday by a Victorian technology company, which has been one of its leading long-time partners, after it said the US tech giant failed to honour an agreement to pay incentives for selling its software.
Kalibrate Asset Management Solutions is claiming IBM owes it over $500,000 in incentive payments for a deal it struck to provide software to a Tasmanian water utility company in 2015.
However, IBM has refused to pay and abruptly terminated its almost decade-long partnership relationship with Kalibrate in December.
It is rare for a small technology partner to pursue legal action against one of the global technology firms, as they tend to rely on such relationships to attract clients and ongoing business.
Kalibrate’s business is largely built around deploying IBM’s Maximo Asset Management software and it was awarded one of IBM’s Beacon global partner awards in 2014 in recognition of its standing among IBM affiliates.
Proceedings commenced in the County Court of Victoria in Melbourne on Monday, with Kalibrate’s claim – seen by The Australian Financial Review – showing it believes it is entitled to money under IBM’s Value Advantage Plus for Government (VAP-G) sales initiative.
The case is based around a contract signed with TasWater in September 2015, which was worth $2.57 million, and which Kalibrate says came after it convinced the utility to deploy the Maximo software following an initial trial and subsequent contract.
The claim says Kalibrate filed its VAP-G claim on IBM’s Global Partner Portal the following month, having had an agreement with IBM since 2012 to be a part of its program.
To qualify for the IBM incentive payment, approved partners need to be fulfilled through an approved distributor, with Kalibrate using Meier Business Systems to prove it was actively involved in selling the software and show the contract was valid for the VAP-G program, all of which Kalibrate claims it did.
However, IBM has refused to pay on the basis it is not convinced that Kalibrate was instrumental in sealing the deal and it could already have been registered as a sales opportunity by IBM itself.
Kalibrate claims IBM’s representations about its incentive scheme were misleading and deceptive, and that it had pitched and sold IBM’s software to TasWater on the basis that it assumed it would receive the incentive payment. It claims it originally introduced the Maximo software to Onstream and Ben Lomand Water in 2013, before the two companies were amalgamated to form TasWater.
It is claiming a debt of $514,000 and legal costs of $20,000 from IBM, having first begun legal proceedings in October 2016.
When contacted about the case, an IBM said it would not comment on ongoing legal matters.
IBM has had a tumultuous few years in Australia, and has been working to restore its reputation after its role in the bungled 2016 census saw it pay over $30 million in damages to the government.
It also fought a protracted, and ultimately successful, legal battle against the Queensland government over its role in a $1.2 billion health payroll debacle, which saw medical workers either underpaid, overpaid or not paid at all.