Oracle cuts support for South African energy biz Eskom in long-running licensing dispute

'Eskom should pay the pending dues for the Oracle software that they use'


Oracle has pulled the plug on support for software described as "quite essential" to "crucial operations" at South African energy firm Eskom as part of an ongoing licensing dispute.

Eskom spokesman Sikonathi Mantshantsha said Big Red had withdrawn support for multiple software systems after the electricity provider failed to have the courts compel Oracle to continue while the dispute was settled. Eskom had also offered to pay what it thought it owed upfront until the figure was agreed in court.

Mantshantsha confirmed that Oracle had withdrawn some of its technical support services. "Eskom has contingency plans in place to reduce the risk of disruption resulting from the dispute with Oracle," he said.

The spokesman told media that the firm was conducting an "urgent procurement tender" to find third-party support for its Oracle software.

An Oracle spokeswoman said: "We are of the view that Eskom should pay the pending dues for the Oracle software that they use."

The electricity firm, which serves around 6.2 million direct customers, is known and unloved in SA for "load shedding" – planned load reduction by switching off power for hours at a time across South Africa – which it describes as "a controlled option to respond to unplanned events to protect the electricity power system from a total blackout." This practice is so loathed that locals have nicknamed the firm's CEO, Andre de Ruyter, "the Prince of Darkness."

In a case dating back to 2019, Johannesburg High Court earlier this month dismissed an attempt by Eskom to compel Oracle to renew support services until April 2022.

According to the court application, reported in the South African press, Oracle conducted a software licensing audit of the company in 2019 and concluded it was using more software than it was entitled to.

Oracle first claimed the user had underpaid by around R7.3bn (£370m, $500m), which was disputed by Eskom. The firm's CEO, André de Ruyter, reportedly wrote to Oracle describing its claim as a "sharp dispute" and noting that the software firm had subsequently reduced it to R600m (£31m, $41m).

Eventually, the amount claimed by Oracle was reduced to just under R400m (£20.17m, $28m). As far as Eskom is concerned, the amount due to Oracle is approximately R166m (£8.37m, $11.65m) in total.

In a statement following the court ruling, the company said it offered to pay the R166m and proposed a verification and court process in order to end the dispute.

When Oracle rejected this approach, threatening to terminate its services to Eskom, "Eskom approached the high court to compel Oracle to continue providing the technical support services for the duration of the agreement until April 2022," the company said.

Since the court dismissed the application, Eskom has lodged leave for appeal. ®

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