Grand Theft Corporate
Grand Theft Corporate
March 26, 2007: Customer concerns are mounting over Oracle’s announced legal proceeding against rival SAP in a battle Oracle says, involves stolen IP, customers and confidential materials and ‘corporate theft on a grand scale.’
If proven, software vendor wars could be shaken to new heights with some of the dirtiest tactics used in the history of the software industry.
Oracle announced the legal proceedings in the US on the basis that SAP has illegally accessed Oracle’s computerised customer support system and stolen thousands of proprietary, copyrighted software products. In further alleged egregious tactics, Oracle claims “SAP gained repeated and unauthorised access, in many cases by use of pretextual customer login credentials, to Oracle’s proprietary, password-protected customer support
Major customer logins, including Bear Stearns, Merck and Honeywell were allegedly used to take Oracle documents. These companies were all about the become customers of SAP TN, SAP’s Oracle support service for TomorrowNow, a PeopleSoft software provided acquired by SAP in 2005. PeopleSoft was acquired by Oracle in 2005.
In total, Oracle claims SAP stole gigabytes of customer-support software from September 2006 to January 2007.
According to David Mitchell, software practice leader at Ovum, SAP Oracle should relieve customer concerns and declare what the legal proceedings are really about. “Oracle has no beef with SAP customers, only with SAP. Oracle could remove customer concerns by declaring that it would not pursue SAP customers, for any breech of IP that SAP may or may not have undertaken.
“Not only would this give some welcome customer re-assurance, it would also demonstrate that customers will not be punished for changing software or service providers.”
Mitchell believes the real winners of the latest chapter of the Oracle, SAP competition war will be the legal profession. “The legal profession is making lucrative fees around the software industry at present, much of it focused around the protection of intellectual property. This case will add to the revenues of this part of the industry.”
However Mitchell also points out that this case is different to the more familiar software IP scenarios. “Most legal cases in software have focused on product-related IP,” he says. “This case is different, in that if focuses on the IP around a support and service offering.”
After moves towards consolidation in the company, Oracle reported fiscal Q3 earning up 36 percent to $US1 billion, or 20 cents a share. SAP is still ahead of Oracle in terms of ERP sale.