Oracle vs. SAP lawsuit on third-party maintenance: My prediction was half right

by Dennis Byron on July 3, 2007

Back when Ora­cle (ORCL) vs. SAP (SAP) hit the fan in late March/early April, I said some quiet set­tle­ment would occur on some day when no one was payir­ing atten­tion to information-technology (IT) news such as Christ­mas Eve or July 3rd. Well I was half right. Today is that slow news day in the U.S. As a result, there were only hes­i­tant ques­tions from jour­nal­ists and invest­ment ana­lysts at the ini­tial SAP press con­fer­ence on this sub­ject (another will be held at 11:00 AM EDT on July 3). SAP’s answers were equally tepid, mostly the stan­dard “can’t com­ment on ongo­ing lit­i­ga­tion” or word­ing almost iden­ti­cal to the court fil­ing. Nei­ther SAP’s oral or writ­ten responses were the mea cul­pas they should have been.

In its response to the Dis­trict Court, SAP admits on the first page: “certain down­loads… may have erro­neously exceeded (its) cus­tomers’ right of access.” On page 13 of the fil­ing, SAP admits that it ripped off the daylight-savings-time book­let that some­one at Ora­cle wrote. Every other word on this case by SAP and Ora­cle (and me) is wasted breath.

Dis­turbingly in its fil­ing SAP did not really con­cede wrong­do­ing. It wasn’t grand theft accord­ing to SAP, it was just petty lar­ceny. SAP says it denies Oracle’s claims of “heavy downloads,” using the Bill-Clinton defense that it does not know what the def­i­n­i­tion of heavy is. SAP says only Ora­cle knows if SAP down­loaded 10,000 doc­u­ments it shouldn’t have so it denies the alle­ga­tion. Sim­i­larly danc­ing on the head of a pin, SAP makes a dis­tinc­tion between Tomor­rowNow and cor­po­rate head­quar­ters that is likely legally cor­rect but eth­i­cally defec­tive. SAP appar­ently even denies that Ora­cle soft­ware includes data­bases, mid­dle­ware and applications.

Coin­ci­den­tally, a related case has been opened by the United States Depart­ment of Jus­tice. Unfor­tu­nately from an SAP and Ora­cle investor’s point of view this is start­ing to get expen­sive. Once SAP knew that even one doc­u­ment had been taken inap­pro­pri­ately, it should have used the court sys­tem to aggres­sively reach a set­tle­ment. SAP indi­cated that it would nego­ti­ate accord­ing to U.S. court reg­u­la­tions but did not want to con­cede any­thing at this point because most of Oracle’s alle­ga­tions were unfounded. Admit­tedly most of Oracle’s nar­ra­tive reads like a dime novel but the key alle­ga­tions appear to be spot on.

Mean­while com­pa­nies such as Rim­ini Street reap the ben­e­fits of Ora­cle remind­ing users that third-party options exist out there. Rim­ini, one of the lead­ing inde­pen­dent main­te­nance and sup­port providers and founded by the guy that sold Tomor­rowNow to SAP I believe, announced Mon­day that both 2007 new client sales exceeded plan with strong con­sec­u­tive quarter-over-quarter growth and expan­sion. Rim­ini Street offi­cially began serv­ing the Cana­dian mar­ket in Q2.

Rim­ini says “Thanks Larry.”

–Den­nis Byron

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