The SuccessFactors - Softscape Conflict Gets More Disturbing
On April 1, 2008, Success Factors was granted a preliminary injunction against certain sales practices and information dissemination by competitor Softscape. The court also granted an expedited discovery process to allow SuccessFactors an opportunity to learn how its systems were compromised and who exactly was behind the misinformation effort. To read this court order, see: http://www.successfactors.com/docs/PI_order.pdf You may also want to read what Bill Kutik of Human Resources Executive has to say (http://www.hreonline.com/HRE/story.jsp?storyId=85280934) or see Jason Corsello's blog (http://humancapitalist.com/?p=568#comments).
A review of the court documents filed in this evolving litigation brought to light a number of material new discoveries and accusations. The following paragraphs recapped statements filed and declarations by persons friendly to SuccessFactors and may not represent the totality of the story. Readers should not assume these are facts at this time but simply allegations from one side of the courtroom drama.
Anji Webb, HR Systems and Services Director of Game Stop provided one declaration. Game Stop is a business prospect for both Success Factors and Softscape. Anji declared that:
- He received an e-mail on March 4, 2008 from John Anonymous (hcmknowledge2008a@gmail.com) that contained the disputed PowerPoint presentation. (A review of the court document shows that the attachment is actually a pdf file)
- The e-mail said “If you are thinking about purchasing from SuccessFactors, please read the following document; it provides information about Success Factors which they don't want you to know"
- The document alleged that two thirds of SuccessFactors clients have left over a three-year period. It also alleged that long scrolling forums existed in the product even though Game Stop did not witness this.
- The declaration further alleged that the SuccessFactor’s logo and name were used throughout the document and there were no references to Softscape in the deck.
- Anji also stated that the PowerPoint deck introduced additional levels of concern on their part and left the implication that the four months sales process may be extended while claims are investigated.
- Lastly, Anji stated that Softscape sent a letter after this dustup became public. The letter apologized for the distraction the litigation was causing. The letter did not make any requests to have copies of this PowerPoint destroyed or returned.
James Matheson, director of Web operations at SuccessFactors provided a declaration. He stated that:
- He analyzed slides from the subject PowerPoint deck and determined that the slides came from a password-protected sales demo account ACE275. This account was assigned to a SuccessFactor’s regional sales manager for Latin America and the Caribbean. The manager’s name is Jorge Corrales.
- Citrix logs identified that Jorge conducted to demonstrations for prospect named "New Millenium (sic) Shoe".
- There is a website www.newmilleniumshoe.com
- New Millenium (sic) Shoe representative, Ely Valls, had contacted success factors and requested a product demonstration.
- New Millenium (sic) Shoe also requested a second demonstration at a later date with Ely and her consultant, Javier Cruz.
- The IP address for ely@newmilleniumshoe.com pointed to a Comcast cable user in Watertown, Massachusetts. This was the same IP address that had previously accessed the ACE275 count on four separate dates.
- An IP address for a second demo pointed to an Internet user inside the Softscape headquarters in Wayland, Massachusetts.
- In a search on the social network site LinkedIn, Javier Cruz, the technical consultant working with Ely Valls, may be the Javier Cruz with the descriptor "agent at SS" and is based in Montréal, Canada. This is important as the other attendee on that second demo may have accessed the system through a Canadian IP address.
- SuccessFactors demonstration accounts, like ACE275, are password-protected and are unique to each individual salesperson.
Jorge Corrales, the SuccessFactors sales manager, provided a declaration as well. He stated that:
- Ely Valls claimed to be the owner of a 50 person company called New Millenium (sic) Shoe based out of San Juan, Puerto Rico.
- Ely Valls wanted a demo of the SuccessFactors product and said that her firm would make a decision in two days.
- The first demonstration was conducted in Spanish. Immediately after the demonstration, Ely Valls requested a proposal from SuccessFactors.
- The proposal included two flow charts that both showed up in the disputed PowerPoint deck.
- Ely Valls requested a second demonstration to show how the system administration tools within the SuccessFactors product worked. The second demonstration would have both Ely Valls and a consultant of hers attend. This second demonstration was conducted in English.
Patrick Premo, an attorney representing SuccessFactors, submitted a declaration, too. He stated that:
- The phone number on the New Millenium (sic) Shoe website appeared to be a fax line.
- A reverse phone number lookup search showed that the number belonged to Gabriela Villamarzo of San Juan, Puerto Rico.
- Attempts to reach this number failed and the number may be disconnected.
- The CEO of Softscape is Dave Watkins and he may be the Dave Watkins found on the social networking website Facebook. Surprisingly, Ely Anne Valls is listed as one of his friends on Facebook. To see for yourself just follow this link: http://www.facebook.com/people/dave_watkins/544365778
- Ely has a face book account as well and her page is at this link: http://www.facebook.com/people/Ely_Anne_Valls/513027623
- Patrick was concerned over rule 26(f). Apparently, he was concerned that too much time would pass between a temporary restraining order and when full discovery would begin. In particular he wanted no delay in finding evidence, assurances that evidence would not be destroyed and sought help in finding where the security breach occurred within success factors.
There are other filings beyond these. Here are the more troubling areas of concern that are surfacing:
- The level of preparation, planning and effort that went into this competitive intelligence effort is significant. If true, then the following tasks were undertaken to capture data about SuccessFactors:
o A fake storefront company was created obstensibly located in Puerto Rico
o Bogus web demo participants logged in from Massachusetts & California, not Puerto Rico
o Callers posed as prospects to secure not one but two product demonstrations.
o The second demonstration focused on security administration functions (an interesting choice)
o Screen captures and/or materials from a proposal were lifted and incorporated into a document
o This document was constructed to look as if it originated from somewhere other than Softscape which is curious for a document that was supposed to be for internal SuccessFactors distribution only. Why the artifice if it’s an internal only document?
o This document was distributed to over 30 prospects or customers. The exact number is currently unknown
- There still is some ambiguity surrounding the ‘facts’ stated in the disputed document. While one side has claimed the information is based on ‘substantiated facts’, they have either backed down from this claim or have not proved these facts yet. This should be interesting to see.
- Softscape’s CEO may be connected to this action. The linkage between Ely Valls and the CEO must be investigated.
SuccessFactors pursued this preliminary injunction as they feared Softscape would continue to use aspects of the data in the disputed deck in verbal discussions with prospects. That is now off limits. The court also granted SuccessFactors’ motions for speedy discovery.
Court cases are hard to handicap. Originally, this case looked like an overzealous sales person had leaked a modified version of an internal market intelligence document to a few prospects. Now, it appears that the activities may be more expansive, more senior and more coordinated than originally presented. These recent declarations paint a darker scenario and one that warrants continued watching.
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