HP pays Sky £318 million over CRM cock-up

HP has agreed to pay BSkyB some £318 million to settle a lawsuit over a failed CRM implementation undertaken by EDS a decade ago.

The total settlement includes £230 million in damages, as well as £40 million in interest and tax. HP said it won't be appealing the ruling.

In a judgement delivered in January, EDS was found to have deliberately lied about the time required to complete the customer relationship management (CRM) software project. As a result of its peddled falsehoods, EDS won BSkyB's £48 million contract ahead of rival bidder PricewaterhouseCoopers, the judge found.

HP has already paid BSkyB £270 million in respect of the case and will now hand over a final £48 million - a sum that brings startling symmetry to the whole affair.

In a statement to investors, BSkyB said: "On 7 June 2010, EDS and Sky fully and finally settled the litigation between them and all related claims (including for damages, costs and interest) for a total amount of £318 million.

"This amount includes the interim payments of £270 million that EDS has already made to Sky in February 2010."

HP said: "This matter is now closed, having been settled fully and finally on mutually agreed terms."

The lawsuit came to court in 2007, aftermuch mud-slinging between EDS and BSkyB over the failed project.

Finally, this January, the judge found that EDS had "failed properly to resource the project". When BSkyB finally sacked EDS in March 2002, it had done "little work", the judge said. In his opinion, EDS had "failed to exercise reasonable skill and care or conform to good industry practice".

When BSkyB finally finished the project in March 2006 it had spent some £265 million sorting out the mess EDS had left behind it.

When HP acquired EDS in 2008, the case was already underway.