Oracle vs. SAP: Ellison pressed to quantify customer losses over TomorrowNow

Summary:Oracle CEO Larry Ellison took that stand at his company's TomorrowNow trial vs. SAP and was pressed to quantify how many customers were lost to his archrival over third party support.

Oakland, Calif.---Oracle CEO Larry Ellison took that stand at his company's TomorrowNow trial vs. SAP and was pressed to quantify how many customers were lost to his arch-rival over third party support.

Oracle is seeking damages of $1 billion from SAP over infringement by its now defunct TomorrowNow unit, which offered third party support for PeopleSoft and JD Edwards software. SAP has admitted guilt and the trial in U.S. District Court for Northern California is designed to pinpoint damages. Attorneys were instructed to only focus questions on damages.

Those damages largely depend on whether Oracle can quantify customers lost to SAP over TomorrowNow due to intellectual property theft. Ellison, clad in a black turtleneck and suit, was trying to paint a picture that Oracle would lose 20 percent to 30 percent of its customers to SAP over TomorrowNow. Oracle didn't lose those customers, but did argue that it lost 358 customers to SAP due to TomorrowNow.

SAP lawyers pressed Ellison to quantify the concerns about losing a bevy of customers. Where were the emails or documents revealing Ellison's concerns? "I would never write anything like that down," said Ellison, who said SAP's purchase of TomorrowNow was a concern.

However, Ellison, who testified for about an hour, said the concerns were real. Ellison was confronted with the fact that an internal report from Oracle didn't agree with the hefty customer losses over TomorrowNow. Meanwhile, Oracle had already anticipated losing some customers due to the acquisition of PeopleSoft. In fact, Oracle kept more customers from PeopleSoft than it anticipated.

The issue is whether Oracle can pinpoint exactly how many customers it lost over TomorrowNow. When SAP counsel asked whether Ellison could name one customer lost over TomorrowNow, he couldn't. The jury will have to decide whether losing 358 customers out of thousands can be directly attributed to TomorrowNow or just the standard course of battle with SAP.

Ellison said that if SAP were to license the intellectual property stolen by TomorrowNow it would cost about $4 billion in a negotiation.

In another exchange, Ellison noted that SAP's acquisition of TomorrowNow was "a brilliant idea." "In a way it was a brilliant idea to take away our customers," said Ellison. The rub was that SAP would have to hire hundreds if not thousands of engineers to support Oracle applications. Ellison said concerns about TomorrowNow increased after Oracle discovered intellectual property theft. "We didn't think they would take our intellectual property and resell it," said Ellison, who said that TomorrowNow's theft meant it could provide all the bug fixes, updates, regulatory compliance changes and engineering that Oracle could provide.

SAP lawyers noted that there were some exchanges arguing that SAP's purchase of TomorrowNow could actually be positive for Oracle. "I don't know anyone that would think TomorrowNow was a positive. Someone said it and it makes no sense to me," said Ellison.

"I had detailed discussions with Ms. Catz (co-president Safra Catz) about it and the concerns were there," said Ellison.

Related:

Topics: SAP, Banking, Enterprise Software, Legal, Oracle

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