Oracle NetSuite Lawsuit Says Software Is Nowhere Near ‘Off the Shelf’ Ready as Advertised

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An Ohio IT services and healthcare staffing company alleges Oracle fails to disclose up front that its cloud-based NetSuite business admin software, unbeknownst to buyers, cannot be used without extensive customization. 

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The 13-page proposed class action lawsuit says that although Oracle touts its NetSuite accounting, payroll and human resources management software as ready to use “off the shelf” and requiring minimal implementation time once a customer buys a license, the reality is that small- and medium-sized businesses are forced to spend “countless wasted hours and other resources” integrating the software into their operations without promised help from Oracle. According to the suit, the company’s true aim is to secure lucrative financing commitments from businesses “with no real plan to ensure the functionality of any software provided.”  

Per the case, Oracle knows many small- and medium-sized businesses will be unable to pay up front for its costly licenses and implementation fees, which can cost hundreds of thousands of dollars, and offers to “assist” these companies with financing arrangements. However, Oracle does not disclose off the bat that it intends to sell the financing to third parties while handing off clients to subcontractors outside the U.S., the suit says. Ultimately, this arrangement allows Oracle to be paid fees up front regardless of whether it delivers functional software, the filing states. 

As a result, the suit says, Oracle customers are essentially forced to spend “countless hours” trying to integrate NetSuite into their operations without support from Oracle (and despite being forced to pay its costly fee for “implementation” services), only to learn the software is incapable of performing the promised functions without extensive, time-consuming customization. 

The plaintiff business alleges that Oracle represented that, if the company committed to buying a software license in May 2023, it would ensure that its software would be fully implemented and integrated into the plaintiff’s operations by the following July. Oracle’s representations were material to the plaintiff’s decision to pay $184,000 in software license fees and implementation charges over 24 months, the case states. 

Unbeknownst to the plaintiff, “but clearly known to Oracle,” the lawsuit says, was that NetSuite implementation by July 2023 was “neither possible nor realistic,” or that Oracle “lacked the capability of ensuring implementation by any specified date.” 

Soon after the plaintiff business committed to buying software licenses for Oracle’s accounting, payroll and HR modules, the company was assigned a subcontractor from Latin America to do the job “Oracle had originally committed to performing,” the filing relays. In addition, Oracle sold the financing of the plaintiff’s software to another company without regard for whether the business had received the products they bargained for, the suit claims. 

“Meanwhile, Realogic never received the benefit of the software promised by Oracle, as its products clearly were not ‘off the shelf’ ready, were replete with data errors and had other defects which cost Realogic time and expense attempting to make the software function as intended,” the lawsuit summarizes. 

The case looks to cover all businesses nationwide, with 1,000 or fewer employees, that within the last four years agreed to buy NetSuite software licenses from Oracle and agreed to pay implementation fees but have not obtained fully functioning software. 

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