Oracle-SAP Suit: TomorrowNow Acted Improperly, Admits SAP

Published: July 9, 2007

by Timothy Prickett Morgan

Back in March, ERP and database software giant Oracle launched a lawsuit against its long-time ERP rival, SAP, asserting that SAP's relatively recently acquired TomorrowNow had broken the law by stealing a slew of documents out of its systems. On July 3, SAP issued a statement that confirms that some inappropriate downloading did, in fact, occur.

SAP's statement last week is the first formal response that the German software giant has given relating to the suit against itself and its Bryan, Texas, subsidiary. Oracle sued the SAP Americas division of SAP and TomorrowNow on March 22 in the U.S. District Court for the Northern District of California, in San Francisco. Oracle and SAP Americas are both Delaware corporations, and the choice of venue in California was chosen because of state laws against computer fraud.

In SAP's answer to Oracle's claims, the company said that TomorrowNow was allowed to download materials from Oracle's Web sites on behalf of TomorrowNow's customers, but said that software fixes and support documents were inappropriately downloaded as well. SAP wanted to point out that whatever was downloaded--inappropriately or not--remained within TomorrowNow's systems and did not in any way make it back to SAP proper.

TomorrowNow offers independent support for customers using PeopleSoft, JDE, and Siebel software suites, which is annoying enough to Oracle, but when its rival SAP acquired the company, Oracle was doubly unhappy.

In the wake of SAP's filing, the Department of Justice has asked for SAP and TomorrowNow to provide documents relating to the downloading, and both are complying with this request.

"Even a single inappropriate download is unacceptable from my perspective," said Henning Kagermann, chief executive officer at SAP in a statement. "We regret very much that this occurred. I want to reassure our investors, customers, partners, and employees that SAP takes any departure from the high standards we set for all of our businesses very seriously, regardless of where it occurred or how confined it may be. When I learned what happened, I promptly took action to strengthen operational oversight at TomorrowNow while assuring that we maintain excellent service for TomorrowNow's customers going forward."

One step that SAP took was to put Mark White, the chief operating officer and the former chief financial officer of its SAP Americas division in charge of TomorrowNow as its executive chairman. The company also put in place strict guidelines for TomorrowNow employees and trained them on the new procedures for handling data on behalf of customers.

The case will be heard in September unless Oracle and SAP come to some sort of settlement.

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