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Indian IT firm secures early win against HP Enterprise in cloud billing case

Hyderabad-based Pi Data took US-based HP Enterprises to court, claiming that HPE's Indian representatives gave an inflated estimate of AP govt's cloud computing needs to generate higher bills A Hyderabad-based cloud computing company has secured a key win against global enterprise IT services provider Hewlett Packard Enterprises or HPE after the Indian firm took the global giant to court over alleged overbilling and failure to adhere to processes. The US District Court for the Southern District of Texas has ruled that HPE cannot wriggle out of its responsibility to investigate the actions of its associates and vendors in India, and has allowed a case filed by Hyderabad-based Pi Data Centers to proceed. The case relates to a contract entered by Pi Data in 2018 for HP India to provide cloud computing infrastructure to the Andhra Pradesh government. Later, Pi Data felt that HP India and associates had given an inflated estimate of Andhra Pradesh government's cloud computing requirements, and therefore, the capacity contracted under the deal was excessive and utilization extremely low. At this point, the Hyderabad-based company approached HP India with a request to have a relook at the contract. However, according to Pi Data, HP India initially agreed to review the contract, but "later back-tracked with no valid reason".

Soon after these developments, one of HP India's local partners took Pi Data to court, claiming unpaid arrears. This forced the Hyderabad-based company to settle the demands under protest. After settling the dues, the Hyderabad-based company sent a request to the US-based HPE, alleging that HP India had misled it about the quantum of computing resources needed by AP Government. The Indian company said that this was a violation of HPE's Code of Conduct. HPE responded saying that it had conducted an investigation, but refused to give further details.

This forced Pi Data to approach the Texas court. According to the case documents, the petition alleges that HPE and its affiliates in India deliberately provided false information about the AP Government's cloud computing needs, failed to maintain accurate books and records, failed to invoice properly or overcharged for their services, and made false demands and claims. Broadly, the petition alleged negligence, breach of fiduciary duty and negligent misrepresentation. 'Not merely aspirational' HPE then filed a motion to dismiss the petition in front of the same court using several arguments, including that the HPE's global code of conduct was only aspirational and only for employees.

The US court has dismissed most of HPE's objections, including the one that the code of conduct was merely aspirational and not legally enforceable. "..the language in the Partner Code of Conduct..is not merely aspirational," the court observed in its order, "it sets specific requirements that must be followed, or the parnter will be in breach of contract...the issue is Hewlett Packard's failure to investigate (after saying ti would do so).." the court observed. While allowing Pi Data to continue to seek legal remedy, the court struck down one charge from the list of charges -- that of negligent misrepresentation. The court has, therefore, allowed Pi Data to file an amended complaint against HP Enterprise on or before Oct 25. (THE NEW INDIAN EXPRESS)