SAP-Oracle TomorrowNow hubbub center of HP-NYT duel over Apotheker

Who would have thought that a third party enterprise support lawsuit between SAP and Oracle would be the center of a major dust up between the New York Times and Hewlett-Packard chairman Ray Lane?
Written by Larry Dignan, Contributor on

Who would have thought that an enterprise support lawsuit between SAP and Oracle would be the center of a major dust up between the New York Times and Hewlett-Packard chairman Ray Lane?

Boomtown's Kara Swisher has a scathing letter from Lane to the New York Times over columnist Joe Nocera. At issue is HP's CEO Leo Apotheker's role with SAP's TomorrowNow unit. In a nutshell, Oracle bought PeopleSoft and J.D. Edwards to begin an acquisition spree. SAP got too cute and bought TomorrowNow, which offered third party support for Oracle products. Nevermind that both SAP and Oracle live off software maintenance and third party support is a big business model killer for them.

From there, Oracle tried to sue SAP's face off. Neither party really wanted all of those enterprise agreements going to court. SAP acknowledged TomorrowNow's guilt so the damages could be resolved. In a nutshell, Oracle wants a few gazillion dollars. SAP scoffs at that and is looking to hand over a few million.

SAP said in August:

Beyond the fact that four Plaintiffs are suing three Defendants on ten claims, the principal reason this case threatens to be so complex to try is that Plaintiffs have asserted a claim for billions where their true damages measure in the tens of millions, at most. Shining a clear and focused light on Plaintiffs’ exaggerated damages claims may be the only way to bring this case to an end.

Well, that TomorrowNow flap goes before a judge soon. On Nov. 1, the Oracle and SAP trial starts. Apotheker may be called to testify by Oracle.

Enter New York Times columnist Joe Nocera, who misses a lot of the nuance in the TomorrowNow case, which we've covered extensively. Nocera's column essentially goes like this:

  • HP was nuts for booting former CEO Mark Hurd over expense reports. Hurd was later hired by Oracle.
  • But then HP's board is hypocritical because it hired Apotheker, who played a role at TomorrowNow, which stole Oracle's support intellectual property.
  • The big wind-up is that HP booted one guy over ethics only to hire another one that was ethically challenged.

The problem is that Apotheker's role in TomorrowNow isn't all that cut and dry. Toss in the nuance that SAP acknowledged guilt in the TomorrowNow case just so it could try and school Oracle in the damages round and there's a lot of gray area here. Say SAP pays Oracle $50 million in damages over TomorrowNow and Oracle wants the entire treasury. Who comes away the winner? It's debatable since both press releases can be spun nicely.

Nocera had no debate. He concluded Apotheker was a crook. Enter Lane's missive via Swisher.

First, the lawsuit on TomorrowNow: Mr. Nocera concedes the suit between Oracle and SAP (and its now-shuttered subsidiary, TomorrowNow) is old news. Oracle has been litigating this case for years and has never offered any evidence that Mr. Apotheker was involved. It didn’t even deem him relevant enough to the case to include him on a list of witnesses for trial–until, that is, Mr. Apotheker was named CEO of HP and Oracle had other motives to try to tie him to the case.

The facts are: TomorrowNow was never under Mr. Apotheker’s supervision. The conduct in question at TomorrowNow occurred before Mr. Apotheker became CEO of SAP. And, it was Mr. Apotheker who, as CEO of SAP, shut down TomorrowNow.

Lane then cites Josh Greenbaum, who also noted some of the context that Nocera didn't.

While a lot of folks watch this Lane-Nocera pissing match and declare enterprise software interesting again the real big item is third party support. Oracle also happens to be trying to sue Rimini Street off the map. Rimini CEO Seth Ravin kind of likes the challenge and argues that third party support is just fine. In fact, Rimini just added third party support for Oracle's E-Business Suite.

Greenbaum writes:

It’s important to note, and Nocera misses this completely, that the business model TomorrowNow (TN) was supposed to have is not what the Oracle lawsuit now alleges was the model used to commit a crime. The amended lawsuit clearly states that TN stole inappropriately, but the larger issue of whether a third party maintenance company can use IP licensed by a customer from a software vendor to service that customer (and only that customer) is still up for grabs. It may someday be ruled illegal, but that day has not yet arrived.

Indeed, Rimini Street, founded by TN’s founder Seth Ravin, runs exactly this kind of business. And while Rimini is being sued by Oracle, no judge has given Oracle injunctive relief to stop the practice. Which means it’s a trial-worthy issue of the law. Which means, at a minimum, if TN had just stuck to what it was supposed to be doing, SAP wouldn’t be in the mess it is now with Oracle.

That passage sums it up nicely, but that's way too much nuance for a mainstream newspaper column. The good news is now the TomorrowNow suit is suddenly popular again perhaps the peanut gallery starts asking more about third party support.

Related: Rimini Street landing big reference customers: Maintenance tipping point near?

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