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Oracle's SAP Lawsuit

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Oracle's SAP LawsuitConsider this as another escalation of hostilities between the two ERP titans, Oracle and SAP. About 10 days ago Oracle filed a lawsuit accusing SAP of stealing internal tech support documents used by Oracle's clients.

The story as is unfolding details how TomorrowNow, a SAP's subsidiary, logged into accounts designated for some of Oracle's large customers and downloaded thousands of technical documents relating to Oracle products. TomorrowNow is a support outfit that offers maintenance contracts to Oracle's customers at competitive prices to Oracle. Oracle maintains that it has irrefutable proof in the form of IP addresses and account logins that shows TomorrowNow as the originating traffic responsible for downloading those documents.

Maintenance contracts are big business for the likes of Oracle and SAP who derive a substantial portion of their revenues from them. And since support contracts are very high-margin, they have considerable influence on the companies' bottom lines. Those contracts not only siphon support money away from Oracle, but they could also eventually steer the vendors away from Oracle's products and towards SAP's products. It is no wonder that Oracle was spooked over the downloads.

The question is whether Oracle's suit is a justified one. Oracle has been engaged in quite a buying binge in the last few years. Notable companies snapped up by Oracle include PeopleSoft, Siebel Systems, and most recently, Hyperion solutions. The acquired outfits have been part of the Oracle's master plan to transform itself from a database company into a giant entity in the analytics, CRM, and business management fields. So far the plan has worked out quite well for Oracle and in the process it has made some of the most renowned companies in these areas very nervous. These include Microsoft, IBM, and SAP, to name a few. Even Google hasn't been immune to Oracle's cross-hairs. Recent Oracle ads tout its search products for internal documents as superior to those offered by the search giant.

SAP, for its part, has promised a vigorous defense against what it claims to be an essentially frivolous and vindictive lawsuit by Oracle. Indeed on the surface Oracle's claim does not seem to have much merit. I don’t see anything wrong with a company competing with Oracle to provide product support for Oracle's vendors. If a friend asked me for technical support on a Microsoft product and in the process gave me his support login account so I can view or download relevant documentation from Microsoft's site, I can hardly view that as stealing documents. The fact that Microsoft might lose support dollars in the process might make the company justifiably upset, but that justification shouldn't extend to suing me for damages, even if I recommended a better product to my friend in the end.

In the final analysis, this lawsuit is about sour grapes. Given Oracle's paranoia about its competitors' uneasiness stemming from its acquisition-fueled growth, this is likely only the beginning of its penchant for litigation. If a company like SAP wanted to engage in illicit activity, it would have had the wisdom not to use its own computers to achieve its goals. Hopefully the justice system will see this lawsuit as an anti-competitive move by Oracle to fortify its position through intimidation.


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