TomorrowNow resignations won't affect SAP's business
SAP AG announced yesterday the resignation of several senior managers of its
troubled subsidiary TomorrowNow, including CEO Andrew Nelson.
The episode has evoked a mixed reaction in the industry.
While announcing that Nelson and several members of his team had quit, SAP
said it is "considering several options for the future of the TomorrowNow
business, including possible sale."
Texas-based TomorrowNow was set up to provide Oracle customers with software
maintenance support -- and it did so at a much lower price than what Oracle
offered.
The company came into the spotlight in March when Oracle filed a lawsuit against
it (also naming SAP as a defendant). The lawsuit accused SAP and TomorrowNow
(SAP TN) of "corporate theft on a grand scale."
While the legal battle continues -- the resignations of senior TomorrowNow
execs, including its CEO is seen by one Canadian analyst as SAP just looking
to put an unpleasant episode behind them.
"SAP is the biggest company in the [enterprise software] space -- and
the last thing they need is something tarnishing their reputation," said
Joel Martin, vice-president of enterprise software research at analyst firm,
IDC Canada in Toronto. However, he said it's unlikely the TomorrowNow episode
will affect SAP's business in any significant way.
Meanwhile, SAP, when contacted, had very little to add to its statement.
"The litigation remains ongoing and a settlement conference is scheduled
for October 2008, where the parties are encouraged to discuss options, including
settlement, with a Magistrate Judge," said Andy Kendzie, Executive Director,
SAP America Media Relations in an e-mail sent to ITBusiness.ca.
"As there is active litigation, we cannot discuss this in any further
detail," he said.
IDC Canada's Martin noted that maintenance revenues are "very near and
dear to the enterprise software vendor's heart", and any threat to those
revenues by a competitor could potentially spur litigation. He said TomorrowNow
"must have been [affecting] US-based revenues for some of Oracle's core
products."
In its lawsuit Oracle claimed SAP TN, repeatedly and without authorization,
accessed Oracle's proprietary, password-protected customer support Web site.
From that site, it said, "SAP copied and swept thousands of Oracle software
products and other proprietary and confidential materials onto its own servers."
"As a result, SAP has compiled an illegal library of Oracle's copyrighted
software code and other materials."
The suit -- filed in the U.S. District Court in San Francisco -- threw into
sharp focus the crucial and growing importance "maintenance revenues"
in the enterprise software space.
There's little doubt that -- until Oracle's suit -- TomorrowNow's business
was a runaway success. Oracle and SAP offer very different perspectives on the
reasons for this success.
Oracle, in its suit, suggested that SAP TN was able to "offer cut rate
support" to
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