SAP admits downloads, denies corporate theft

3 Jul 2007

Enterprise software giant SAP has acknowledged that staff members made some inappropriate downloads of rival company Oracle’s documents and fixes through a subsidiary’s network, but denied corporate theft.

In March, Oracle said it was suing SAP for allegedly breaking into its computer system and stealing confidential information.

A filing to a US district court represents SAP’s first formal response to Oracle’s charges.

SAP claimed that its US subsidiary, TomorrowNow, was authorized to download materials from Oracle’s website on behalf of its customers.

SAP acknowledged that some inappropriate downloads of fixes and support documents occurred, but affirmed that what was downloaded at TomorrowNow stayed in that subsidiary’s systems and that it did not have access to Oracle intellectual property.

The US Department of Justice has requested that SAP and TomorrowNow provide certain documents and both companies say they will co-operate.

“Even a single inappropriate download is unacceptable from my perspective. We regret very much that this occurred,” said Henning Kagermann, CEO, of SAP.

“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,” Kagermann said.

The next step in the legal proceedings will be an initial case management conference on 4 September.

“There has long been rivalry between SAP and Oracle,” commented David Mitchell, software practice leader at analyst firm Ovum.

“However, when Oracle accused SAP of corporate theft the rivalry took a new and exciting turn, with the prospect of the two companies resolving the dispute outside of court being quite remote. Fighting for market share with marketing siege weapons and hand-to-hand combat in the sales trenches is expected.”

Despite SAP’s admission and promise to put in place stronger governance and control mechanisms, Mitchell believes the case will go through the legal mill for months to come.

“Irrespective of the legal conclusion to the case, a significant part of the impact for both Oracle and SAP will be related to how each manages the public relations impact.”

“Although many will see the legal teams as the cavalry in this battle, the troops that really matter are the PR Special Forces contingent. PR is where this battle will be won or lost,” warned Mitchell.

By John Kennedy