Oracle v. SAP - SAP hangs head, Oracle thumps chest - The Manufacturer.com

Oracle v. SAP - SAP hangs head, Oracle thumps chest

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Manufacturing News, Source : The Manufacturer US
Zone : IT in manufacturing
Published : 03 Jul 2007 13:43

David Mitchell, software practice leader at industry thinktank Ovum, offers these observations on Oracle v. SAP, which heated up this week.

“There has long been rivalry between SAP and Oracle, only amplified by the multi-billion dollar Oracle acquisition spree that has taken Oracle more firmly into the business applications market. However, when Oracle accused SAP of corporate theft the rivalry took a new and exciting turn, with the prospect of the two companies resolving the dispute outside of court being quite remote. Fighting for market share with marketing siege weapons and hand-to-hand combat in the sales trenches is expected, but the intervention of corporate lawyers in this way was not anticipated by anyone.”

“SAP has admitted that a limited amount of inappropriate download activity (of fixes and support documents) did occur in the TomorrowNow subsidiary, and has since taken measures to strengthen the governance and control mechanisms. Among the measures are the appointment of the SAP America COO, Mark White, as Executive Chairman of TomorrowNow. A renewed training of TomorrowNow employees was also announced, which will ensure that they fully understand policies and procedures. However, the main thrust of the SAP announcement is to challenge the Oracle claims, along two main lines.”

“First, is that SAP itself had no access to material downloaded by TomorrowNow, with a conscious corporate separation from TomorrowNow systems and operations ensuring that SAP could not have gained access to the material. This is, essentially, a corporate firewall position. Second, that TomorrowNow is actually entitled to access most of the material that was accessed, since it was doing so on behalf of customers who had that right of access. Under most circumstances customers are able to allow third parties to access material on their behalf, to enable them to support that customer. Of course, SAP has also provided a detailed and paragraph-by-paragraph legal response to each of the Oracle points. It has taken the interesting step of doing so entirely publicly, even going as far as to create an information website (http://www.tnlawsuit.com) to provide full details concerning the case.”

“It is still likely, in our view, that the case will continue through the legal processes and that it may still have many months to run. Irrespective of the legal conclusion to the case, a significant part of the impact for both Oracle and SAP will be related to how each manages the public relations impact. SAP's Henning Kagermann is taking a stance very similar to that taken by HP's Mark Hurd when it experienced difficulties concerning inappropriate corporate behaviour, being quoted as saying 'even a single inappropriate download is unacceptable from my perspective' and taking action to strengthen controls in TomorrowNow. This is a sensible and entirely appropriate PR response, and exhibits a proper recognition of the potential impact on both SAP and Oracle. Oracle is also taking a strong PR perspective, avoiding the temptation to enter into hand-wringing righteous indignation.”

“Although many will see the legal teams as the cavalry in this battle, the troops that really matter are the PR Special Forces contingent. PR is where this battle will be won or lost.”

Oracle issued this statement on July 3 in response to SAP's legal filing, written by Geoff Howard, Counsel for Oracle Corporation, Bingham McCutchen LLP:

"SAP CEO Henning Kagermann has now admitted to the repeated and illegal downloading of Oracle's intellectual property. Oracle filed suit to discover the magnitude of the illegal downloads and fully understand how SAP used Oracle's intellectual property in its business. To the extent requested, Oracle will cooperate with the Department of Justice investigation of SAP announced by the company in its press release."

Oracle on March 22 filed a suit against SAP in US Federal District Court in the Northern District of California. Oracle alleges violations of the Federal Computer Fraud and Abuse Act, Intentional and Negligent Interference with Prospective Economic Advantage, and several other malfeasances.

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