It's gonna get ugly.
Oracle's no-holds-barred legal action against SAP may turn out to be a case "about corporate theft on a grand scale," as the lawsuit states. The claims are very serious, said attorney Erik Phelps. The breadth and depth of Oracle's complaint indicates the seriousness with which it views the matter. SAP has vowed to "aggressively defend itself against the claims made by Oracle in the lawsuit," and it will be interesting to see its response, added Phelps, who is not affiliated with the case.
But for CIOs, the 43-page complaint by the leading developer of database and applications software against the largest German software company should read more like a cautionary tale, said Phelps, who specializes in technology issues at Michael Best & Friedrich LLP in Madison, Wis.
TomorrowNow, acquired by SAP in January 2005, provides third-party support for PeopleSoft Inc., J.D. Edwards & Co. and Siebel Systems Inc., all of which are owned by Oracle. For companies that are phasing out one system for another rival system, the message in the Oracle suit is "use care," Phelps said.
He points to paragraph six of the Oracle complaint, which alleges a user on an SAP TomorrowNow computer signed in as Oracle customer Honeywell International Inc. The lawsuit states the user signed in "to access Oracle's support system and copy literally thousands of Oracle's Software and Support Materials in virtually every product library in every line of business. This copying went well beyond the products that Honeywell had licensed and to which it had authorized access."
If the Honeywell user ID and password was the one alleged to have done all these things, Honeywell probably has an obligation to keep that from others and "could have been a collateral damage party in this lawsuit," Phelps said.
"Now, there are a lot of good reasons I am sure why Oracle didn't sue Honeywell," Phelps said. A large software vendor might have fewer reservations about suing a company it had no business reason to continue to make happy, he said.
Stamford, Conn.-based research firm Gartner Inc. sounds a similar note of caution in its report on the lawsuit, issued March 26. Gene Phifer, lead author on the report, notes that hundreds of third-party support companies exist worldwide to serve as proxies for the license owner.
He said it is "still to be determined" whether TomorrowNow acted on its customers' behalf and whether the customers' support agreements allowed TomorrowNow to act on their behalf. And while this approach to technical support "will not likely change as a result of Oracle's suit against SAP," Phifer said, "enterprises must take care to protect themselves contractually from potential misdeeds of the third-party support provider."
When contacted, SAP spokesman Steve Bauer said in an email: "SAP wants 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 will remain focused on delivering products and services -- including those from TomorrowNow -- that ensure success for our customers."
Bauer added that TomorrowNow "has no direct interactions with Oracle on behalf of its clients," and that SAP "is confident in the integrity of TomorrowNow's business model and its ability to provide differentiated services to its customers."
"If Oracle didn't want those particular customers to have access to the entire library, it makes you wonder why they were granting them access to the underlying material," Phelps said. "It might beg the question of why they didn't put tighter controls on who does what, if it is that critical, and I suspect that is part of what we might hear coming back in the response from SAP."
Let us know what you think about the story; email: Linda Tucci, Senior News Writer