Here's an intriguing and clever (on SAP's part) twist to the ongoing lawsuit between Oracle and SAP. Oracle is claiming its business has been badly damaged by SAP's actions. In asking Oracle to prove it, SAP says show me the money, and is trying to cause Oracle some pain before this all gets resolved. If SAP succeeds with its current action it will give competitors like Dynamics some ammo to use when selling against Oracle.
To recap, in case any of you need it, Oracle is claiming its business has been badly damaged by SAP's TomorrowNow division illegally downloading Oracle materials and then using those materials to offer cut rate support and services to PeopleSoft and J.D. Edwards customers. In fact, Oracle claims to have suffered more than $1 billion in damages from these actions.
Does Oracle really price gouge customers more than SAP, as an SAP executive has claimed? We may find that out over the course of this trial because SAP's latest response is Show me the money. Both parties are responsible for coming up with a proposed settlement amount by next month. SAP says that in order to arrive at a fair amount it needs to understand precisely how much Oracle's business has been damaged. Here's the clever bit...it is claiming the only way it can come up with that amount is if Oracle reveals its profit margins on J.D. Edwards and PeopleSoft software and support contracts. SAP is asking the court to force Oracle to do so.
This is finally getting interesting. Oracle is of course refusing to share this information. Maintenance contracts have become the core of Oracle's business model and are what allowed the company to exceed growth expectations last quarter. Most of Oracle's acquisitions in the apps space are motivated by (A) defending the Oracle platform and (B) adding to the recurring maintenance revenue flow. In sharing its exact margins on maintenance and support Oracle would be supplying very useful competitive intelligence to its rivals and giving leverage to customers when negotiating new deals.
Here I thought SAP was just going to meekly take its punishment. The company's previous action in this case was to file a brief that denied many of Oracle's charges, but also acknowledged others. This was a far cry from what went on during Oracle's lawsuit against the government as it fought to acquire PeopleSoft. Among other highlights PeopleSoft's Craig Conway sparred back and forth with Larry Ellison about whether Larry wanted to shoot his dog.
Let me paraphrase that conversation...
Conway to the press: Oracle saying it wants to buy PeopleSoft and J.D. Edwards and then stop all future development on the products is like somebody telling you they want to buy your dog from you so they can take it out back and shoot it.
Somewhere along the way Conway also called Ellison a sociopath and referred to Oracle's hostile takeover bid for his company as a diabolical move and "atrociously bad behavior from a company with a history of atrociously bad behavior."
Now that's the kind of entertainment I want out of a high stakes battle between the leaders of the enterprise software world. It's good to see SAP stepping up its game just a bit.