A more detailed reading of Oracle’s lawsuit against SAP I came across this passage. Subtitled A Deal Too Good To Be True, it says:
It was not clear how SAP TN could offer, as it did on its website and its other materials, “customized ongoing tax and regulatory updates,†“fixes for serious issues,†“full upgrade script support,†and, most remarkably, “30-minute response time, 24x7x365†on software programs for which it had no intellectual property rights. To compound the puzzle, SAP continued to offer this comprehensive support to hundreds of customers at the “cut rate†of 50 cents on the dollar, and purported to add full support for an entirely different product line – Siebel –with a wave of its hand. The economics, and the logic, simply did not add up.
Oracle has now solved this puzzle. To stave off the mounting competitive threat from Oracle, SAP unlawfully accessed and copied Oracle’s Software and Support Materials.
Business software maintenance costs are a sore point. When and if this thing goes the distance then I hope that the true economics of business software gets a good airing.
Vinnie calls it a ‘sad day for the industry‘
Third party maintenance is an important new trend in the enterprise software business. It could stall if customers get spooked by this. All the more reason to feel glum for the industry today.
While I understand his concern, I hope that by exposing the maintenance cost issues, customers will be the long term winners.
UPDATE: Josh Greenbaum has an alternative take. Jason Wood comments but his earlier analysis is revealing. If, as Jason suggests, TN has captured 1% of Oracle’s maintenance revenues, then the value TN has alleged to have swiped can’t be huge – at least not as it relates to Oracle. $25 million pa?
Nick Carr can’t wait for SAPs response – I suspect he’ll have a long wait. SAP doesn’t usually respond to these kinds of question when litigation is at hand. But then the seriousness of the allegations might yet force SAP to make a public announcement.
