Cultural obstacles hindering SAP growth

The Wall Street Journal has a long page one story today on SAP, highlighting cultural issues hindering the firm's progress as a worldwide software vendor. It begins, "Five years ago, Germany's largest software company decided it had to become less German."

An interesting statistic: in 2000, SAP employed 3,900 software developers, 75% of whom were based in Germany. In 2006, the software development headcount increased to 8,500, but only 60% were German.

SAP also made other changes to become less "German." It adopted English as its language for corporate meetings. In place of its traditionally methodical approach to software engineering. , and it began to use a rapid product development approach to bring new products to market, under the leadership of Shai Agassi.

Predictably, these changes have created quite a bit of conflict within SAP's organization, especially in Germany. The WSJ article describes the impact on SAP's German staff:

In August 2005, a German employee complained to a local newspaper that Mr. Agassi's "boys come in at very high levels, without even being seen by the staff here." Five months later, Germany's national Handelsblatt newspaper published an article headlined "SAP and Globalization -- March of the Americans." One German manager was quoted saying, "It's clear Agassi would like to get as many functions as possible to the U.S." Mr. Agassi says his mission was "to bring the best talent we could find anywhere into SAP, regardless of location."

In April 2006, SAP executives hosted a town-hall meeting in Walldorf on the "Americanization of SAP," where workers aired concerns over the increasing use of English and the hiring of engineers overseas. A few months later, a handful of SAP workers, including Mr. Schick, won enough support to start a workers' council, roughly equivalent to a labor union.

This explains much behind the departure of Agassi, who grew impatient with the pace of change, especially when it became clear he would not get the top job at SAP until at least 2009.

It also provides insight into why SAP's growth has trailed that of Oracle's, a fact which Oracle is trumpeting these days in full page ads in major newspapers.

Read the WSJ story for much more.

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Transportation Security Administration has a problem with security

The folks entrusted with ensuring the security of U.S. air travel seem to have a problem with their own information security.

The Transportation Security Administration, a department within U.S. Homeland Security, revealed that it "lost" a computer hard drive containing Social Security numbers, bank data, and payroll information for about 100,000 of its employees. They are not sure if they just misplaced it or if it was stolen.

Here's the part that baffles me: the data was stored on a portable, external, disk drive.

Why on earth would TSA write confidential employee information to a portable disk drive? It brings to mind a similar incident last year where a laptop computer was stolen with confidential information on millions of military personnel. A Veterans Administration employee had take taken the laptop home with him, where it was stolen.

The Associated Press has the full story on TSA's information security incident.

Maybe the problem is that many IT security professionals are not taking this threat seriously. A recent study we did at Computer Economics found that a significant percentage of IT security staff surveyed think that physical loss or theft of computer hardware or storage is only a minor threat. This is somewhat surprising in light of the number of respondents who reported such incidents in the past year.

An executive summary of our study, Trends in IT Security Threats, is on the Computer Economics website.

Salesforce.com unbundling its platform from its apps

Over the past few years, salesforce.com has been gradually morphing itself from an on-demand CRM vendor to a platform for software-as-a-service (SaaS) generally. It started by first allowing extensive customer-specific customization of its CRM applications and integration with legacy or third-party systems. Then it provided a complete development environment, including test capabilities separate from production. Then it opened up its SaaS platform to third-party developers to write complementary applications. This week it announced the next logical step: it is allowing customers to buy access to its platform without buying its CRM application.

Salesforce.com Platform Edition allows customers to take advantage of other applications in its AppExchange marketplace, or, it allows customers to start from scratch and write their own custom applications. Details on Platform Edition are on the salesforce.com website.

The evolution of salesforce.com further enhances software-as-a-service as a viable alternative to traditional on-premise software. The only drawback to this approach I see is that it ties the entire IT infrastructure of the customer to salesforce.com. If you think vendor lock-in is a problem today with traditional vendors, such as Microsoft, Oracle, and SAP, imagine what it will be like when your entire technology stack--from hardware, OS, database, and application--is tied to a single provider.

I'm a big fan of SaaS, but I still haven't figured out how to get around the vendor lock-in problem.

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IT services in a SaaS world

Chris Barbin makes the case for a new kind of systems integrator, uniquely focused on implementation and support of software-as-a-service (SaaS) solutions. In his article on Sandhill.com, he writes about these "Services 2.0" providers that are "dramatically altering the system integrator (SI) landscape."

This new breed of specialized firms fully embrace SaaS with complementary business and technology consulting, productized intellectual property, and support services via flexible social networks will be disruptive to traditional Global Systems Integrators (GSI)- such as Accenture, IBM, Cap Gemini, and Infosys – who are just as addicted as the ISVs themselves to revenue streams based on the on-premise install base.

Now, Barbin is CEO of Appirio, which just happens to be an implementation services provider for SaaS vendor Salesforce.com, so it's not as if he is a neutral observer. Nevertheless, his argument is persuasive. Large global implementations of major on-premise systems such as SAP and Oracle, supported by large global service providers, such as IBM, Accenture, Cap Gemini, Infosys, and others, are notoriously expensive, difficult, time-consuming, and risky. If SaaS solutions, such as Salesforce.com, Omniture, and SuccessFactors offer to diminish the pain associated with on-premise solutions, then by extension, there must be a service-provider approach that diminishes the pain of the traditional implementation effort.

Drivers of Services 2.0
Although SaaS as an viable alternative to on-premise software has been around for at least seven to ten years, it is only recently that this new breed of service providers have sprung up to provide an alternative to the traditional system integration approach.

For early adopters of SaaS ISVs like salesforce.com, initial services requirements were limited to basic configuration, end user training and minor customizations. In the last few years, services requirements have become more substantial because the increased flexibility of platforms like Salesforce have allowed enterprises to move from single-department SaaS "experiments" to global rollouts of thousands of users.

In other words, as platforms such as Salesforce.com's have become more powerful, allowing customization and easy integration with third-party solutions, the opportunity for additional value-added services has grown. These include creation of "mash-ups" that combine SaaS-system functionality with Web 2.0 services, such as Google Maps and other web-services in unique combinations. The sheer scale of some Salesforce.com implementations, reaching tens of thousands of seats, has also increased the need for extensive system integration services around SaaS.

Customers benefit greatly from the combination of SaaS with Services 2.0: faster implementation, more customized solutions, and much lower costs. Barbin says,

The pendulum has swung from the early ERP days ($10-$15 for every dollar in licenses), to the SMB days of SaaS (10 cents for every dollar in subscription) - and will settle for enterprise customers at $2-4 for every dollar of subscription license revenue.

Threat to the Big System Integrators?
Barbin makes the case that the large IT service providers will not be able to make the transition to Services 2.0. "The reliance on mega-transactions, considerable corporate overhead, and inability to move quickly will hamper these firms’ ability to lead in the Services 2.0 world," he writes. "These firms are fully dependent upon the services revenue generated their customers’ lock-in on on-premise software."

In this respect, Services 2.0 is a disruptive innovation to the big system integration firms, just as SaaS is disruptive to the major on-premise software providers. I doubt it will be the death of IBM, Accenture, and Infosys, but watch for growth in system integrator deals to be elsewhere in the coming years.

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The economics of open source

Dirk Riehle has written an interesting paper for IEEE on the economic motivations of stakeholders in open source software. Riehle leads the open source research group at SAP Research, a research organization within SAP that identifies emerging IT trends and conducts R&D activities for new technologies. As such, Riehle's insights are interesting in that they may reflect the view toward open source within SAP.

There are a wide range of business models within open source. Reihle points out that there are actually two main forms of open source: community open source (products that are owned and developed by a community of developers) and commercial open source (products that are owned by a single commercial organization). The Apache web server is an example of community open source, while MySQL is an example of commercial open source.

Three stakeholders
He then goes on to analyze the economic incentives of open source from the perspective of three groups of stakeholders: system integrators, software vendors (closed source and open source), and individual developers/employees.

Of the three groups, system integrators stand the most to gain from open source. Open source takes out a large part of the system integrator's cost structure, the part that goes toward software. This frees up money for the client to spend on additional services, or allows the system integrator to lower its price-point, making its services more affordable and increasing volume. System integrators prefer community open source, because its cost is lower than commercial open source, and there is no "vendor lock-in" to the owner of the software.

There's a lot more in Reihle's paper, including an analysis of the impact of open source on the software developer profession. In short, open source "makes life more complicated for employees." On the one hand, a developer supporting an open source product can be more easily replaced by an outsider that has similar experience with the same product. On the other hand, a good open source developer can build expertise that has value to other employers, increasing his or her marketability. He writes,

A developer who chooses the right project can gain and maintain a position that will increase salary-negotiation power and job prospects. The developer will enjoy those benefits as long as the project is of significance to potential employers.

Open source reinforces the trend toward employees becoming "free agents."

Winners and losers
Reihle's article does a good job in explaining the economic incentives by open source. To me, it makes it easy to understand why IBM--which is today largely a services firm--is one of the strongest proponent of open source, especially community open source.

It also suggests why many traditional vendors of closed source products seem to have such a hard time with profitability these days, leading to the huge amount of acquisition/consolidation activity we've witnessed in the past five years. Unless you are an 800 pound gorilla (like Reihle's employer, SAP), the cost-structure of closed source development is just not a good way to make money. In many markets, it might just be better to embrace some sort of open source development and make money higher up the value stack, in maintenance, support, integration, and customization.

I think we are still early in the development of business models around open source. Ten years from now, things will be clearer.

There's a good discussion on Slashdot, on Reihle's article.

For another good piece on the economics of open source, see Bruce Perens's article, The Emerging Economic Paradigm of Open Source.

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Lawson upbeat on Q1 forecast

Well, maybe Harry Debes was right. Back in January, Lawson's CEO wrote me to say that his firm's financial performance was better than observers were giving it credit for.

Now, in forecasting its first quarter earnings, Lawson said today that it expects Q1 revenue to come in at $190 to $192 million, well above its previous forecast of $181 to $190 million. After the announcement, Lawson's share price peaked at its highest point since March 2004, finishing the day about 10% higher that the previous day's close.

Lawson is still digesting its 2005 acquisition of Intentia, and related costs are still impacting financial performance. From an accounting perspective, organizational perspective, and technical perspective, I have a feeling that the merger job was bigger than Lawson expected. Hopefully, Lawson can put that work behind it and move on to build even more momentum. Although I wasn't able to attend Lawson's user conference down the road in San Diego this year, I did hear about some good things, including a tighter reliance on IBM for Lawson's technical architecture, which frees up Lawson's resources to focus on business applications.

It will be interesting to see the details behind Lawson's performance when the final numbers come in. I'll be looking to see whether the results are due to a pick up in new deals or a change in the rate of deferred license revenue, which Debes explained in his correspondence to me in January. If Lawson's new deal flow is picking up, it would be a good sign not only for Lawson but for the enterprise system market in general. Lawson's results would be consistent with Oracle's most recent quarter, which were outstanding, and contrary to SAP's, which were weak.

We'll have to wait until April 9 to find out, however. Lawson announced yesterday that it is delaying its quarterly report because of a need to review restructuring charges from the Intentia acquisition.

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SAP's Shai Agassi calls it quits

SAP confirmed today that its product and technology executive Shai Agassi is quitting the company to "commit himself to his personal agenda of environmental policy and alternative energy sources and other issues."

Agassi was the architect of SAP's Netweaver strategy, its service-oriented architecture. He was also slated to become co-CEO with Leo Apotheker, who is currently president of SAP's Customer Solutions and Operations group.

At the same time, SAP announced that Apotheker will assume the new role of Deputy CEO immediately, putting him in line to succeed the current CEO, Henning Kagermann.

What does it mean? It's hard to tell. There's not a hint anywhere that there was any problem between SAP and Agassi. Agassi, who is an Israeli, was one of the few non-German's among SAP's top executives. By all accounts, he was a major force to push SAP from its stodgy image in client-server systems to its current Internet architecture. His influence will no doubt be missed, although SAP's statement indicates he will remain as a consultant to the firm.

If anyone has more insight on Agassi's departure, I'd love to hear it.

Update, 8:30 p.m. Curt Monash has a "contrarian view" on Agassi's departure. He says that "SAP may do better getting out from underneath Shai’s overarching decision-making." He writes:

[SAP's technical strategy] has been heavily developed and refined on Shai’s watch, with major contributions from lots of other folks. The issue isn’t vision any more. What SAP needs to do better is execute on the vision.
...
SAP is doing plenty of things well enough to mine its massive installed base. But preserving and increasing the size of the base? For that, vision needs to be turned into more substance. And of senior SAP execs I've talked with and listened to — in Shai's case mainly the latter — Shai wasn’t necessarily at the top of the substance list. Indeed, he’s the only one who routinely left me shaking my head about a gap between rhetoric and actual technological fact.

For a different viewpoint, read Sramana Mitra's take on the news. She thinks it reflects a conflict in style between SAP headquarters in Germany and Agassi's powerbase in California. Agassi needed to get the CEO job to change things, and when that was deferred, he couldn't see staying around.

Update, Mar. 29: Josh Greenbaum, as usual, has good insights, including a review of the SAP executives that will need to fill the role Agassi has played.

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Oracle/SAP lawsuit: view from Rimini Street

Yesterday, I spoke with Seth Ravin, CEO of Rimini Street, about Oracle's civil suit against SAP and its TomorrowNow (TN) unit for theft of intellectual property. Rimini Street, like TN, is a third-party maintenance and support service provider for Oracle's JD Edwards, PeopleSoft, and Siebel products.

Ravin is in a unique position to offer a perspective on Oracle's suit against SAP/TN. Not only does his firm provide nearly identical services as TN but Ravin himself was co-founder of TN's third-party maintenance services for PeopleSoft and JD Edwards. He was also TN's president until retiring to pursue other ventures shortly after SAP acquired TN in 2005.

Some of Ravin's observations match those I've already written in my first post and second post concerning this lawsuit. For example, Ravin emphasized that Oracle's lawsuit is not about TN offering third party support. Nowhere does Oracle object to SAP's offering third-party support for Oracle's products. Larry Ellison in fact has spoken of the third-party support model as "capitalism," and Oracle itself offers support for SAP's products through its partnership with Systime, as I noted previously.

He also observed that Oracle's security on its customer support website, by Oracle's own admission, allows anyone with a user ID to download any and all materials on the site, even those that Oracle is claiming in the lawsuit were outside of a particular customer's license rights. Oracle also does not appear to immediately disable user IDs and access to Oracle's customer portal upon expiration of a customer's support contract. Such poor information security practices and lack of access controls might be a defense for SAP in this lawsuit.

But Ravin also had some new insights into the lawsuit.

A question of intent
First, he believes that it is unlikely that SAP as an organization has any conspiracy to steal Oracle's intellectual property. Stealing Oracle's IP would have no business value to SAP and opening the door to such a lawsuit is certainly not in SAP's best interests. Furthermore, if SAP did want to steal Oracle's trade secrets, it certainly would not be likely do so from their own offices, traceable through IP addresses on its own network. If this were truly a case of corporate espionage, SAP would have done a better job of covering their tracks. I find this to be a convincing argument.

That leaves the most likely explanation -- if there really is an issue -- as that of errors by one or more employees getting confused and mixing up client logins when processing multiple download requests from Oracle's customer portal for new clients. Ravin notes that Oracle customers have the right to download support materials up to the expiration date of their Oracle maintenance agreement. When a customer plans to terminate maintenance, Ravin thinks that TN -- as the customer’s contractor -- likely offers to download all the support material for which they have the rights to. At this point, Ravin believes the TN consultant should write those materials to a CD-ROM or other appropriate storage device and hand them over to a customer.

Picking up on Ravin's theory, I can picture at least two scenarios. First, imagine a TN consultant who has several Oracle customers that have signed up for TN's services and plan to terminate Oracle maintenance agreements. Perhaps the consultant simply forgets to log out with one ID and accidentally uses one client's authorized ID to process another client's authorized download. Perhaps logins get mixed up or are not managed well to ensure that they are never used again after a client's Oracle maintenance contract expires. Since Oracle's site looks the same regardless of the login ID and since Oracle does not seem to immediately turn off access rights after maintenance contracts expire, there is plenty of opportunity for innocent human error.

Or, perhaps the consultant downloads all the material he needs for all his current clients using one login ID and then splits up the material for each customer according to what materials the customer has rights to. From the consultant's perspective, he's just trying to save time logging in and out of Oracle's support site, but from Oracle's perspective, monitoring these activities, it looks suspicious.

Without having seen Oracle’s evidence in this case, there are several scenarios such as those I've outlined above that might explain the situation. There would be no intent on SAP's part, or even the consultant's part, to steal Oracle’s trade secrets, but merely human error in carrying out legitimate activities on behalf of customers.

All about SAP
Ravin points out that while Oracle has every right to protect its intellectual property, if this involved any party other than SAP, Oracle would have followed the traditional process of notifying the party of the inappropriate downloading and seeking to resolve the issue. If the inappropriate activities were then to continue, a cease-and-desist letter might be called for. And certainly, Oracle would have cut off the offending user IDs from further access.

But in this case, it appears that Oracle gave no warnings and took no actions to stop the offending behavior. Rather it quietly monitored the activity for several months, building a case, and then springing a lawsuit. Why? Because creating a "giant media fireball" (Ravin's phrase) works in favor of Oracle's PR campaign against SAP.

Ravin says he would be surprised if any of the Oracle materials went through the "firewall" at SAP and reached SAP's development organization. He expects that a much clearer picture will emerge when this case goes to trial, if it gets that far. In the meantime, Oracle makes SAP look bad and it gets to play the part of the victim.

I asked Ravin how the lawsuit was affecting business at Rimini Street. He was reluctant to paint the lawsuit as good for business, but in fact, he says that sales activities have included a windfall of TN prospects and customers, as Oracle customers looking for third-party support do not want to get in the middle of an Oracle versus SAP battle.

It's going to be interesting to see how this case develops.

Update, 5:00 p.m.: Andrew Nelson, CEO of SAP's TomorrowNow, is quoted in the Wall Street Journal. "We believe we've done absolutely nothing wrong, and we're going to defend our position vigorously," Mr. Nelson said. "We believe our model is an appropriate and legal way to do business."

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SAP subject to criminal charges?

John Pallatto brings up some interesting points in an opinion piece for eWeek on Oracle's lawsuit against SAP alleging theft of Oracle's intellectual property (IP). If Oracle is successful in its civil lawsuit, it probably opens up SAP--and individuals within SAP--to criminal prosecution.

He writes,

The next question that comes to mind is whether any of this activity, if it occurred, was done with the knowledge and approval of top SAP executives, or whether it was some mindless rogue operation carried out at SAP's TomorrowNow subsidiary in Texas.

If Oracle can prove its civil charges that SAP employees systematically looted intellectual property from the Web site, the next step could be state and federal investigations that could result in indictments.

Unless SAP can come up with some plausible explanation as to why people inside its organization were apparently downloading "vast libraries" of Oracle products, a lot of SAP jobs, reputations and cash could go down the drain. The very existence of the company would conceivably be threatened by this brewing scandal.

I did a quick check for cases of criminal IP theft and found this news site on intellectual property cases, which is maintained by the U.S. Department of Justice (DoJ). In addition to cases related to counterfeiting of branded products and software piracy, there are also examples such as these:

• The case of a Duracell employee who plead guilty to downloading trade secrets from his employer's systems and tried to pass them to competitors.
  
  
• The case of a three Metadyne employees who allegedly stole their employer's secret process for manufacturing automotive parts and provided it to a Chinese competitor.
  
  
• The case of a Netgear engineer who allegedly violated his non-disclosure agreement with Netgear supplier Marvell Semiconductor to download Marvell trade secrets and take them with him when he went to work for Broadcom.

These are all criminal cases, which means the defendents could potentially face fines and jail time. There are many, many more examples on the DoJ website. (I should emphasize that the last two cases mentioned above are only indictments, and that the charges have not yet been proven in court.)

So, Oracle's civil complaint against SAP is serious, and it would appear it could lead to criminal charges.

Pallato also brings up an interesting point regarding Oracle's investigative strategy. He writes,

It's clear that rather than block the expired and bogus customer accounts from accessing the Web sites, Oracle chose to quietly monitor and trace the activity to investigate who was doing it and why. The results are this lawsuit.

It appears that Oracle has known about SAP's alleged downloading of Oracle materials for some time. But instead of locking the door, it continued to monitor these activities, building its case. If true, SAP has handed Oracle a potent weapon in the form of this lawsuit.

I've also been wondering about the apparent lack of security in Oracle's customer support website. Apparently, anyone with a customer ID could download anything, even materials for which the customer was not licensed--even internal documents that no customer was authorized to receive. If Oracle took such little care to protect its intellectual property, could that be a point that SAP could use in its defense?

Yesterday, SAP responded to Oracle's complaint to say that it would fight the lawsuit. "SAP will not comment other than to make it clear to our customers, prospects, investors, employees and partners that SAP will aggressively defend against the claims made by Oracle in the lawsuit," SAP's Steve Bauer said in a statement.

The discovery phase of this litigation is going to be interesting, potentially even more interesting than the DoJ's failed attempt to block Oracle's takeover of PeopleSoft.

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Oracle sues SAP and its TomorrowNow unit

Oracle sues SAP and its TomorrowNow unit

Today, two days after it announced third quarter blow-out quarterly results, Oracle filed suit against SAP for massive theft of its intellectual property. The complaint targets activities of SAP's TomorrowNow subsidiary, which offers third-party support for several of Oracle's products, namely, PeopleSoft, J.D. Edwards, and Siebel.

The allegations
The complaint, filed in U.S. district court in San Francisco, alleges that TomorrowNow (TN) personnel repeatedly accessed Oracle's customer support system, using customer passwords, to download thousands of support documents, bug fixes, and other Oracle property, allowing TN to build its own library of Oracle materials to use in servicing customers that do not have Oracle contracts.

If what Oracle claims is true, it doesn't look good for SAP. It appears that Oracle has been monitoring server logs for its customer support website going back to last November and has come to a number of conclusions:

• Oracle claims that TN personnel used the login credentials of customers who were ending their Oracle maintenance contracts to download materials related to products those customers hadn't even licensed. (Apparently, Oracle does not check which products the customer has license rights to when providing access to its support site.)
  
  
• Oracle claims that TN personnel accessed Oracle materials from TN's offices, which are connected to SAP's worldwide network. The filing doesn't say so, but the question arises--did any of these materials find their way into the rest of SAP's organization? I'm sure Oracle will be asking a lot of questions along this line during discovery.
  
  
• Oracle claims that TN used automated methods to search and download entire libraries of material. The number of requests was so many that it is not feasible that a user could actually review the results of each request before going on to the next.
  
  
• Oracle claims that TN downloaded materials intended only for Oracle's internal use. (It is not clear why such documents would be accessible through Oracle's customer support site.)
  

To be clear, Oracle does not appear to be claiming that it would be illegal for TN to access materials on behalf of and in support of customers' existing Oracle contracts. The complaint is focused on TN allegedly using its customers access to build a library of support software and documentation, saving itself the expense of duplicating Oracle's effort.

What were they thinking?
Could SAP be this stupid? I've interviewed Andrew Nelson, CEO of TN, in the past, and I always had the impression that they were quite sensitive to potential legal issues. I would have thought that TN would try to be super-clean about how it handled Oracle's property. Of course, Oracle's complaint presents one side of the story. On the other hand, it's hard to believe that Oracle would be making this up.

Certainly, TN can't say they didn't know Oracle was watching them. Two years ago, when SAP acquired TN, I noted that Larry Ellison was threatening legal action. At that time, he said:

SAP has every right to provide support for PeopleSoft applications as long as they don't violate our intellectual and contractual property rights. It might make it awkward for them. That's our intellectual property, and they should be cautious.

Oracle does not seem to taking aim at any of the customers or former customers that appear to have allowed TN personnel to use their access credentials, although Oracle would probably have a pretty good case, especially if customers knowingly allowed TN to misappropriate passwords. From a public relations standpoint, however, I don't think Oracle wants to be suing customers.

Implications for the third-party support industry
The other side to this story is what it means for the nascent third-party support industry. Other providers, such as Rimini Street, are also growing software contract maintenance businesses. Ironically, Oracle itself has a partnership with SYSTIME to provide third-party support for SAP. To some extent, any consulting firm that provides tech support to Oracle's installed customers could be considered a competitor to Oracle in its maintenance business, although few of them offer what could be considered replacements for Oracle support. Oracle has never acted like it feels threatened by the host of small players that offer services to its customers. A thriving support community can be considered a sign of a vibrant ecosystem around a software vendor.

I've been sympathetic to third-party service providers, such as TN and Rimini Street, because I think they serve as a counter-balance to software vendors that might otherwise become greedy with customer support dollars. I would hope that there could be a thriving industry of third-party providers, but clearly they need to do so without misappropriating the intellectual property of others. If Oracle believes that SAP has stolen its intellectual property, Oracle is right to take legal action.

If even a portion of the allegations are true, it would appear Oracle has a strong case against SAP. Oracle is seeking injunctive relief: it is asking the court to order SAP to stop doing what Oracle says it is doing and immediately to return all materials it has allegedly stolen. It is also asking for unspecified punitive damages, restitution of ill-gotten gains, damages, attorneys' fees, and other compensation. The complaint also indicates that Oracle is in the process of filing copyright registration for materials, which if Oracle is successful in its litigation, may entitle it to statutory damages for copyright infringement.

You can read Oracle's complaint on the Wall Street Journal website.

Update, Mar. 23. Some commentators (Motley Fool, InfoWorld), are comparing SAP's alleged actions to Oracle's actions in appropriating Red Hat's Linux distribution for Oracle's own Linux support services, undercutting Red Hat's pricing in the process. Such comparisons miss the point: Red Hat's licenses allow (actually, must allow) redistribution of materials licensed under open source licenses. Oracle's license agreements expressly do not. Oracle is an aggressive competitor, but its actions toward Red Hat do not misappropriate Red Hat's intellectual property.

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