SAP announced Monday its third-party support and maintenance company TomorrowNow, which is embroiled in a legal battle with archrival Oracle, may be put up for sale. TomorrowNow's founder and several executives have resigned effective immediately.
SAP acquired TomorrowNow as a means to woo away maintenance and support customers from Oracle. TomorrowNow provides third-party support and maintenance for PeopleSoft and JD Edwards, two companies that Oracle acquired.
But earlier this year, Oracle filed a lawsuit against TomorrowNow and SAP, alleging the company went beyond its former customers' contracts and downloaded proprietary Oracle software and materials.
SAP and Oracle have been in the process of seeking documents and depositions from each other and are scheduled to give the court an update in February on that process.
In the announcement, SAP said it is exploring its options for TomorrowNow's business, including the possible sale of TomorrowNow. An SAP spokesman declined to comment on whether these options are currently being explored because TomorrowNow has seen a drop-off in customers since the controversy erupted, or whether it may be part of any potential settlement negotiations with Oracle.
Mark White, TomorrowNow executive chairman, will continue in his role in running the company.
OK, sports fans, here's the preliminary score in the early stages of the Oracle-SAP court battle, which got underway with a case management hearing Tuesday.
Oracle - 1, SAP AG - 2...for now.
Brief recap. Last March, Oracle filed a lawsuit against SAP AG and its wholly owned subsidiary, TomorrowNow. Oracle alleged that SAP and TomorrowNow engaged in such nefarious acts as downloading more of Oracle's proprietary software and support materials than TomorrowNow was entitled to receive, via Oracle's former customers who had signed aboard with TomorrowNow, a support and maintenance company. SAP, at the time, acknowledged that TomorrowNow had engaged in improper downloading of some proprietary software and support materials, but noted that it was limited and did not involve the mother ship back home in Germany, SAP AG.
In U.S. District Court in San Francisco Tuesday, Oracle received a big win when Judge Martin Jenkins didn't restrict its document search and deposition process to only the folks at TomorrowNow. Oracle, much to its rival's consternation, can also do a deep dive into SAP's documents and depose folks in Germany.
SAP, however, scored some points, as well. For starters, Judge Jenkins said both parties can only depose 20 folks between now and the next hearing in February. SAP was seeking 20, while Oracle wanted 80. Each party is limited to 150 document requests before the February hearing--and so far, the parties have roughly hit the 100 mark.
SAP, which wants to put this matter to rest ASAP, got some leeway from the judge, who nixed Oracle's request to spend a minimum of 18 months pulling documents out of SAP and TomorrowNow. Oracle's 18-month estimate didn't include other court activities, such as a trial.
The judge, however, set a trial date for 17 months from now, on February 9, 2009.
SAP may also ultimately win its request to pull Oracle into mediation, once the parties have undergone their document requests and depositions prior to their February 12 status conference with the judge next year. Of course, there's no guarantee that even if the parties engage in mediation that an agreement will be reached and a trial avoided.
And although Judge Jenkins appeared fairly firm on his February 9, 2009, trial date. Things can change. The hearing Tuesday, for example, was initially scheduled for September 4.
Do tell.
SAP said it plans to formally respond by midnight (PST) Monday to Oracle's lawsuit, which claims SAP's wholly owned subsidiary TomorrowNow accessed Oracle's proprietary support and maintenance information beyond contractually allowed levels.
SAP, which has already proclaimed it will "aggressively defend itself" against its rival's lawsuit, is expected to offer a more detailed counterpoint to those allegations later today.
Oracle, which filed its claim in March and amended it in June, said SAP and TomorrowNow, which provides support services for Oracle's PeopleSoft, JD Edwards and Siebel Systems products, wooed away some of Oracle's customers, then used their Oracle accounts to access its maintenance and support information.
Oracle's bone of contention centers on allegations that TomorrowNow accessed its proprietary information, via its former customers' accounts, beyond what those customers were entitled to receive under their Oracle contracts.
Oracle further alleges that some of its former customers had expired contracts when SAP's TomorrowNow accessed its maintenance and support system.
When SAP files its response later Monday with the U.S. District Court for Northern California, it is expected to refute some or all of Oracle's allegations.
Stay tuned.
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