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The Enterprise System Spectator

Tuesday, November 20, 2007

SAP considering sale of TomorrowNow

TomorrowNow, which offers third-party support for several of Oracle's products (PeopleSoft, J.D. Edwards, and Siebel) has been under much scrutiny since Oracle sued SAP and TomorrowNow for massive theft of Oracle's intellectual property.

Back in July, as part of its response to the suit, SAP appointed former SAP Americas COO Mark White to oversee TN, with founder and CEO Andrew Nelson reporting to White. The news this week is that Andrew Nelson is leaving TomorrowNow altogether.

In a press release, SAP said that it is "considering several options for the future of the TomorrowNow business, including possible sale."

What's going on? It would appear that SAP is coming to the conclusion that acquisition of TomorrowNow was a mistake in the first place. Taking maintenance and support business away from Oracle, getting involved so closely with Oracle's customers, and handling Oracle's intellectual property--even if all done within the law--is simply too difficult for Oracle's main competitor to manage. Whatever benefits SAP might gain by facilitating customers' migration away from Oracle are probably not worth the difficulty in avoiding the potential legal risk.

It's too bad, because the nascent third-party support model has a lot to offer as an alternative to direct vendor support. It gives customers choices and puts the primary vendor on notice that it cannot take its maintenance and support business for granted. Unfortunately, SAP's misstep with TomorrowNow has been a setback for the model.

Update, Nov. 23. The Financial Times is reporting that Rimini Street may be interested in taking Tomorrownow off the hands of SAP. Rimini Street is the main competitor to Tomorrownow as a third-party support provider to Oracle clients. If a deal materializes, it would be full circle for Seth Ravin, CEO of Rimini Street. Seth was co-founder of Tomorrownow and was with the firm until it was sold to SAP.

Seth is quoted, "We are interested, but we are proceeding cautiously and need to analyse it first." He also declined to say whether he was talking to SAP about a deal.

Update, Nov. 27. Datamation has more on the possibility of Rimini Street taking Tomorrownow off the hands of SAP. It reports that Rimini Street's business has "quadrupled" since Oracle filed suit against SAP, according to Dave Rowe at Rimini Street.

Related posts
SAP admits wrongdoing in Oracle lawsuit
Oracle now charges SAP with copyright violation
Latest on the Oracle/SAP lawsuit
Oracle/SAP lawsuit: view from Rimini Street
SAP subject to criminal charges?
Oracle sues SAP and its TomorrowNow unit

by Frank Scavo, 11/20/2007 06:36:00 AM | permalink | e-mail this!

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