Barracuda sneakwrap has a nasty bite

Can hardware be licensed? More specifically, can a hardware vendor validly bury usage restrictions like resale prohibitions deep in hidden sneakwrap licenses? And what if that hardware comes with a hefty helping of open source software – do the transfer prohibitions apply to that too? I don’t know, but Barracuda Networks thinks it does, because that’s what it doing with its anti-spam firewall products.

A reader was recently evaluating a batch of second-hand networking equipment available from a local dealer, most of it he believes from a now-defunct mortgage institution that sold off its data center inventory. “He had a Barracuda Model 300 antispam firewall that he wanted $600 for,” the reader wrote about a device that Barracuda sells for $2,000 new, plus a very necessary “Energize Update” subscription at $500 per year. “I chatted with Barracuda about it online and they told me that the subscription on that serial number had expired in March. Barracuda would not support it, he told me – that is their policy. I told him I thought this is dishonest and sleazy. What do they expect their customers to do, buy an extra plot at Forest Lawn and have their equipment buried with them when they go?”

The reader understood that the Barracuda antispam appliance is pretty much useless without the Energize Update service, and Barracuda wouldn’t let him subscribe unless he bought a new machine. “The value is in their service,” the reader wrote. “The device is a doodad, really — just a 1U computer with Linux and Spam Assassin, it proxies your mail server with mostly Open Source software they wrote a Perl front-end for. So I found their attitude about refusing to support it interesting, and probably illegal.”

Well, I’m not sure if it’s illegal, although certainly hardware manufacturers are held to a higher standard in regards to offering long-term warranty support than has so far been required of software vendors. I searched the Barracuda website diligently – including going as far as I could to buy from them directly online short of giving them a credit card number — but could not find even a whisper about a resale prohibition. But when I contacted Barracuda PR, I was told that – yes, indeed – all resale of their equipment is prohibited. Section 15 of the Barracuda ToS says this:

“Not For Resale. Customer agrees and represents that it is buying for its own internal use only and not for resale unless Customer is a legal and authorized reseller of Barracuda Products as demonstrable by a contract executed by both parties stating Customer is a Reseller or Partner. Customer agrees and understands that the License for the software included in the Products is non-transferable and may not be sold or transferred in any way except by an authorized reseller or partner.”

OK, but I think that raises more questions than it answers. What are customers supposed to do with a Barracuda spam appliance they no longer want? Does the company always enforce this prohibition, or can a spam appliance be sold if it’s still under warranty and has time remaining on the Energize Update subscription?

“No, our resale policy is very clear — the license on the hardware and the software is non-transferable,” the Barracuda spokesperson told me. “Customers that require assistance in disposing of any Barracuda Networks products or materials that are no longer in use are welcome to contact us directly.” As for how and why the company enforces the policy, the spokesperson sent me this sample of a letter sent by Barracuda sales executives whenever they are made aware of a seller on eBay elsewhere offering used device for sale:

“Please know that any resale of used Barracuda Networks equipment is unauthorized and your customer will be unable to receive Energize Updates or even use the products. Further, because the unit may contain sensitive information from individuals, companies, organizations or other entities, you/your company may be liable for any issues regarding improper use and transfer of information.”

Frankly, I find using this “may contain sensitive information” threat as a justification for this policy to be rather ludicrous. Any used computer equipment could possibly contain sensitive information that the original owner failed to remove – does that mean HP or Dell could start prohibiting resale of their computers?

For his part, our reader has decided that his company will find other ways of fighting spam. “My feeling is that equipment, even software, are often expensive company assets and should have residual value,” the reader wrote. “So I would never recommend we buy something where the company is trying to eliminate that residual value by refusing to support subsequent owners. In wanting to force everyone to buy new boxes, Barracuda is treating its former customers as if they are pariahs.”

There is one more issue I have to raise here, particularly since Barracuda is presenting itself as the defender of Open Source against stupid software patents in a legal tussle with Trend Micro. Barracuda may well be on the right side in that case, but take another look at that ToS where it talks about “the software included in the products” not being transferable. Much of that software is Open Source. I don’t know if that’s a violation of the letter of the GPL, but it sure is a violation of the spirit.

I’ll leave it up to those who know a lot more about the GPL, warranties, and the law to parse Barracuda’s position here. But in my less-than-humble opinion, Barracuda is biting the hand of the free software movement to which it owes its existence. And in hiding the true value of what’s it offering deep in the sneakwrap, Barracuda is definitely guilty of treating its paying customers with the baddest of faith.

Post your comments about this story below or write Ed Foster at Foster@gripe2ed.com.