Wednesday, May 30, 2007

Latest on the Oracle/SAP lawsuit

It's time for an update on Oracle's lawsuit against SAP alleging theft of intellectual property by SAP's TomorrowNow unit, which provides third-party support for some Oracle products.
Here's the latest:
  1. On April 30, Oracle asked for a court order to force SAP to preserve electronic records that Oracle might want as evidence. In its filing, Oracle complained that SAP has not responded to a proposed "stipulation order" concerning such records, such as server logs. (As a side note, this is a good example of how new federal eDiscovery rules are coming into play in litigation.)

  2. On May 9, the judge in the case resigned after finding herself disqualified and requested that the case be reassigned to a different judge. She did not give a reason for her resignation. The news means that a trial will be delayed, however. Her filing noted that "all pending dates of motions, pretrial conferences and trial are hereby vacated and are to be reset by the newly assigned judge."

  3. On May 10, SAP CEO Henning Kagermann said in a speech to shareholders that SAP would put up a "massive fight against the accusations" that Oracle has made. "SAP respects the protection of intellectual property," he said. "At the moment we are investigating every single claim in the lawsuit and composing the defense that we will file with the court."

    He also positioned the lawsuit as an attempt to kill the third-party Oracle support business. "Even if Oracle portrays it differently in its petition, we believe what this is about is an attempt to make it more difficult for third parties to provide service and support for Oracle software," he said.

  4. One week later, Oracle and SAP agreed to extend the deadline to June 1 for Oracle to file an amended complaint, with SAP's response now pushed back to July 2.

  5. Then, yesterday, TomorrowNow CEO Andrew Nelson began to speak up, not so much about the lawsuit directly, but about the value of his firm's services relative to Oracle's. In an interview with CNET's, he questioned the value to customers of paying maintenance fees so Oracle could invest in future products, such as Fusion. He said,
    Oracle customers no longer value pre-funding a Fusion application that they no longer understand, that's uncertain to them and that they're not sure they will ever use.

    Oracle has to respond to that. The challenges they've created through their M&A strategy... they've really dug a hole for themselves.
In the meantime, TomorrowNow continues to sell new business, though it's not clear how much of it is for Oracle support. Last week it announced that it expects to sell support contracts for 10 clients of Baan (now Infor's ERP ln).

Not to be left out of the action, TomorrowNow competitor Rimini Street sends word that it has picked up a new deal to support a Siebel implementation at medical products manufacturer Beekley Corporation. Rimini Street claims a savings for Beekley of 50% in support costs, while stabilizing the system and improving Beekley's service to its customers.

Expect more news next week when Oracle amends its complaint, and then July 2 when SAP is due to respond.

Update, Jun. 2: Oracle has amended its complaint to include copyright infringement. Read more in my post for June 2.

Related posts
Oracle/SAP lawsuit: view from Rimini Street
SAP subject to criminal charges?
Oracle sues SAP and its TomorrowNow unit

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