Oracle Wants To Send SAP A $776.7 Million TomorrowNow Bill
May 7, 2012 Timothy Prickett Morgan
Software giant Oracle, which is seeking a retrial of the lawsuit against defunct third-party ERP maintainer TomorrowNow and its parent, rival SAP, told the U.S. District Court that is hearing the retrial that it will seek $776.7 million in damages against SAP.
Considering how puny the TomorrowNow business actually was, this is still a very large amount of money to ask for damages. But it is far less than the $1.3 billion that a jury awarded Oracle in the first trial against TomorrowNow and SAP, even if it is a lot more than the $272 million that U.S. District Judge Phyllis Hamilton said was appropriate back in September after SAP appealed to the court, saying the jury award was too high based on the actual damages. In February this year, Oracle said no dice to the deal the judge offered and said it wanted another trial to assess damages.
Oracle filed a lawsuit against the upstart third-party software maintenance provider in March 2007 in the wake of SAP’s acquisition of TomorrowNow, which offered an alternative to Oracle support on PeopleSoft, Siebel, and JDE software suites. Last September, SAP pleaded guilty to a dozen felony counts relating to TomorrowNow’s actions while supporting customers, including eleven counts of unauthorized access of Oracle’s computer system and one felony count of criminal copyright infringement. SAP had to pay a $20 million fine to Oracle and was put under probation for three years. This remaining portion of the trial is not over the felonious acts themselves, but the economic damage they caused.
SAP said in the trial in November 2010 that the TomorrowNow unit, which it shut down years ago, had 358 customers and that the damages to Oracle, based on the revenues that TomorrowNow generated, was somewhere between $28 million and $41 million. Oracle argued that it was somewhere between $288 million and $2 billion. Oracle also asked for $211 million in interest on the money it would have made if TomorrowNow didn’t exist, and Judge Hamilton awarded the interest, but said it was more like $16.5 million.
One possible way to value TomorrowNow is to look at what SAP paid for it and how many customers it had at the time of the acquisition and scale it up to the number it had when it shut the company down. That was what SAP valued TomorrowNow at, after all. I have no idea what legal premise this would stand on; my guess is none at all.
Heaven only knows how this will turn out. But one way or the other, Oracle is going to get some money.