Software poses hard questions

News Story
- 29 Jul 2010 ( #472 ) - United States
8 min read
Some feel strongly about the issue of keeping software or passwords proprietary.<br />PHOTO: SHUTTERSTOCK
Some feel strongly about the issue of keeping software or passwords proprietary.
PHOTO: SHUTTERSTOCK
By Roger Renstrom

There are growing concerns in North America about the rise of proprietary software for forklifts which make life more difficult for repairers and potentially prevent some from servicing brands to which they are not affiliated.

In good economic times, an industry participant could afford not to be concerned about this situation, but the downturn has applied pressure to those firms and others employing knowledge-based in-house repair talent. The softer economy may slow the need for shop services, and an employer faces the prospect of losing talented technicians through idleness, layoffs or a competitor's offer.

Often, an operator of a large fleet of forklifts builds a staff to handle maintenance. Those large customers want to have the capability to troubleshoot their forklifts without the need for proprietary diagnostic software, handsets or passwords, but OEM limitations may restrict that access.

Dealers can find themselves in the middle on this issue, and end-users may feel alienated or get angry about the limitations. Some suggest the practice may violate antitrust provisions of the Sherman Act of 1890 limiting monopolies in the US. So far, no-one is known to have filed litigation on this matter, but the possibility is suggested.

Two forklift truck dealers and service organisations in Utah are among those with openly rising levels of concern.

From an open market perspective, "I feel very strongly about this issue of keeping software or passwords proprietary," says Mark Williams, president of Intermountain Lift Truck Inc (ILT) in West Valley, City, Utah. Intermountain represents the manufacturers of Heli, Hyundai, JLG, Komatsu and Donkey materials handling equipment.

Williams adds: "I understand the hesitation of the manufacturers and some dealers to release this information because, truth be known, it breaks up their monopoly . . . and who would willingly give up a monopoly."

Some OEMs are "changing codes so a customer or anyone else is locked out," says Tom King, president of TEK Equipment Co, also in West Valley City. Primarily, TEK Equipment serves customers in the northern Utah communities of Salt Lake City, Ogden and Provo.

"Being independent, it is very difficult" for TEK to serve its customers under proprietary limitations, and "it can put me out of business eventually", King notes. "A customer has to call an original manufacturer because he cannot get into the system."

Heli Americas, one of two distributors for Anhui Heli Co Ltd equipment in the US, has a different perspective.

"Heli Americas does not utilise any proprietary diagnostic software for its spark-ignited engines," says Bruce Pelynio. "We believe that the availability of diagnostic software to the end-user enhances the ease of maintenance of the Heli product." Pelynio is president and chief executive officer of Dobbs Imports LLC of Memphis, Tennessee, trading as distributor Heli Americas in 31 states.

"The availability of this type of software has become the exception in our industry as most OEMs have moved to proprietary software on their units," Pelynio notes. "We believe that this is a significant detriment to the acceptance of their product, especially for the growing number of end users who have chosen to move their forklift repair service in-house whenever possible."

ILT's Williams wonders about the proprietary practice limiting a dealer's earning potential, causing product liability issues and impeding individuals from establishing a separate business.

"Does anyone have the right to limit one's earning potential?" Williams asks. "If we are all on a level playing field, then those who offer superior service at a fair price will not only succeed but will excel. . . . It is not right to restrict a free and open market."

Regarding product liability, "I have worked on forklifts for over 30 years and, to the best of my knowledge, there is nothing that I can do with software or passwords that would permit the equipment to harm someone or damage itself," Williams says. "You cannot make the lift do something it is not designed to do. Also, if product liability was a problem, why would manufacturers who use IMPCO fuel systems allow IMPCO to offer free software to anyone who wants to troubleshoot their fuel systems?"

Regarding entrepreneurship and pursuing the American dream, Williams notes: "We see technicians going on their own all the time. Sadly, most of them give it a try and, in a short time, realise just how hard it is to own your own company. They end up working for a dealer again . . . and, in the end, become a much better employee with an appreciation for what it takes to run a business."

Williams says: "The biggest problem involves national accounts that ship all over the country and then learn they have no say in how to fix the equipment."

Forkliftaction.com News has obtained comments from other unidentified forklift dealers across the US with observations about the existence of proprietary software or passwords. Here are some extracts:

* "We perform service on all makes and models of forklifts. Competitors' brands represent about 45% of our service work. In order to properly serve our customers, we need to have access to the diagnostic software. This is a growing problem as the computer diagnostics is a fairly recent phenomenon. In order to perform these services, we are required to have our customers contact the dealers for trucks we do not distribute to obtain the software, work around the diagnostic software issue or have another dealer work on that portion of the system. The software should be available to all dealers. We believe it is a legal issue and that, at some point, the manufacturers will be compelled to open up the software."

* "Proprietary software has become more prevalent in our industry for diagnostics of all types. It is certainly limiting the consumer's choices regarding service, and it is my humble opinion that, yes, like in auto, the government will need to put some sort of regulation in place to prevent you or I as lift truck owners having to deal with local OE monopolies on service."

* "If a technician who is not trained on how to use the links has them available and makes a mistake, the manufacturer is liable. There is a basis for the supplier position. The less proprietary information a dealer has with their brand, the greater access they wish. As a Yale dealer, we do not have Hyster access. There are ways around it but not simple ones. The compromise we offer is that much of the diagnostics can be obtained by using the dash displays to work to a fix, but it takes some time. Others are even more complicated."

* "This is a real double-edged sword. Dealers that provide great service to the customer will continue to be leaders in their market. Average service organisations cannot continue to hide behind their proprietary service tooling to keep their charges high. From my chair, one of the largest liabilities of making the diagnostic software available on the open market is that the good dealers that have trained their technicians will see an exodus of techs trying to go out on their own thinking they can do better as an independent. Provisions for being trained and authorised to have the software could mitigate some of this issue. We must all realise that the North American lift truck market runs at about 1% of the unit volume that the North American car and light truck market does. This does not mean that the same business model and parameters apply to our industry."


* "If you are an independent or have the opportunity to service a customer with a large fleet manufactured by a competitor, you see the issue as restricting your ability to do business, and it does. If you are a distributor or a manufacturer, it makes sense to limit your product liability by allowing only trained, authorised technicians to perform service on your equipment, and the proprietary programming will help you achieve these limits. Both are valid concerns and, yet, my concern is for the customer. Does proprietary programming serve the needs, both present and future, of the customer? It has become more important than ever to provide value for every dollar spent by our customers. The customer has chosen your new equipment to replace their old for a variety of reasons, and your product quality and sales force are to be commended! The issue becomes the limiting of the customer's choice for service providers or their ability to maintain their own fleet. I think that the customers' needs will have to drive the resolution of this issue for the industry. Hopefully, a compromise can be reached that will keep our distributors, manufacturers, independents and customers' businesses healthy and profitable."

ILT's Williams concludes: "I would love to see the lift truck industry willingly offer the technology, but I don't foresee that happening without the courts demanding it. Probably, if we can inform customers about these proprietary practices ─ if the consumers are educated ─ they may refuse to purchase equipment from manufacturers with proprietary software. If consumers drive the change, the practices may go away."

A spokeswoman for Raymond Corp declined to comment on this subject, and inquiries to manufacturers of the Toyota, Yale, Hyster, Crown, Mitsubishi, Caterpillar, Nissan brands and others were not answered in a timely manner.
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