HP pays £318m to settle BSkyB suit

HP's EDS subsidiary admitted liability in certain areas of the BSkyB CRM implementation

HP has agreed to pay £318m to settle a long-running UK lawsuit over a failed EDS customer relationship management (CRM) system delivered to BSkyB.

BSkyB informed investors of the settlement on Monday, saying that the matter was fully settled with a payment that works out at £50m more than the interim award granted by the High Court earlier this year.

The media company sued EDS six years ago for £700m, claiming that the systems integrator had misrepresented its capabilities in a £48m CRM implementation contract.

HP, which acquired EDS in 2008, had already paid £270m after a ruling by the High Court determined that EDS was liable only in certain areas.

The CRM system, which was intended for use in BSkyB help centres, was completed in-house after the company sacked EDS two years into the contract. BSkyB and HP have stated that the agreed settlement is full and final.

Analysts at Gartner said last month that the BSkyB case confirmed its 2007 prediction that maturing software market forces would increasingly favour end users over vendor claims.

"These rulings are an important sign that the tide is turning for liability in the software industry," said Gartner research vice president French Caldwell.

"Customers can win damages for business failures caused by software that is not fit for purpose and is misrepresented."