SAP lists TomorrowNow as a discontinued operation

Buried in a footnote in an SAP press release last week is this tidbit: SAP is now accounting for its TomorrowNow business as a "discontinued operation."

Under US GAAP SAP is required to present its results of discontinued operations (TomorrowNow) separately from its results from continuing operations. The preliminary figures contained in this release include results of both continuing and discontinued operations as a single line item.

From an accounting standpoint, what this means is that SAP no longer considers TomorrowNow as part of its business in the future. SAP already announced back in November that it was considering sale of TomorrowNow. The footnote in its recent press release just makes it official. No word on whether a buyer has been identified.

The handwriting has been on the wall for TomorrowNow ever since Oracle sued SAP and TomorrowNow for theft of its intellectual property. The case is many months away from going to trial, but SAP isn't waiting for a resolution.

While SAP is shutting the doors on its ill-fated foray into third-party Oracle support, its main competitor, Rimini Street, is enjoying a windfall in new business. It just announced that revenue for 2007 quadrupled.

To get more insight on these developments, I called David Rowe, Rimini Street's VP, Global Marketing and Alliances. David confirmed that some of Rimini Street's increase in sales has come from TomorrowNow customers jumping ship. But, in fact, they are only a small percentage of the firm's increased sales. He pointed out that SAP only announced it was looking to sell TomorrowNow recently, so the impact of that announcement will be greater in the future.

Would Rimini Street consider purchase of TomorrowNow from SAP? Rowe was careful in his answer. "We would certainly be interested," he said. "But if those customers are going to come to us anyway, we would need to evaluate exactly what it is we would be buying" in an acquisition of TomorrowNow.

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