How Oracle can lose by winning

If you want to have a good laugh, take a look at Oracle Corp.'s complaint against SAP AG, SAP America and the recent SAP acquisition, TomnorrowNow. It almost humorously describes the efforts of SAP to create a third-party support program aimed at current Oracle users, especially the ones sick of paying for Oracle's support and never-ending upgrades. View the complaint. Nobody can be certain how such lawsuits turn out, but I can't see how Oracle does not have SAP over a barrel.

The chief executive of Bryan, Texas-based TomorrowNow didn't help matters by resigning. See related story.
The crux of the case stems from Oracle's ability to track down what seems to have been a spidering operation, where TomorrowNow allegedly sent a crawler into the Oracle support site and downloaded every document it could find. That appears to be a clear violation of the terms of service of the support site. Curiously, it looks like Honeywell International Inc. was one company with alleged access to the site.

Oracle charges that TomorrowNow, using Honeywell's and other customers' accounts and passwords, went on the support site and downloaded what it could. Oracle also says that this was to be used for providing the exact same support services sold by SAP.

Normally, these sorts of tech lawsuits are dry and boring, but the writer of this particular complaint makes the story exciting -- employing the radical concept of plain English to explain the situation in detail. Apparently SAP, via TomorrowNow, thought it would be able to reproduce the entire Oracle support database for its own use. The legal filing also claims the company wanted to do a "cut-rate" service; it also includes unlawyerly-like terms such as "50 cents on the dollar" and "bankrolling." I found the whole thing to be a hoot. More importantly, by using common language it's an excellent PR vehicle. When you read it, you are convinced that Oracle is 100% in the right and SAP is bad.

I'm certain that this legal document was written to be read by the public, which is an interesting concept. A good proportion of the document is blatant self-promotion as would be presented by a PR person. But there is a subtext within the document that presents a problem for Oracle. It sounds as if the various licenses and terms of service lock users down so much that a prospective customer will have to think twice about using the Oracle products. I mean, the message is clear: Nobody is going to be able to provide "cut-rate," third-party support for companies too cheap to pay the full fare. What's more, once on the Oracle treadmill, you'll never be able to get off it.

This translates into pricey support and endless upgrades. To Oracle, support and upgrades add up to $2.1 billion in revenue, according to the corporate-software giant's third-quarter earnings report. If customers feel cornered by Oracle and these expenses, will they shy away from Oracle in the first place? Winning this suit sends a bad message. The company is going to have to license third-party support for its products somehow. That is the only way that a long-term safety net can be created to assuage users. Because Oracle has created a gravy train for itself with no escape routes for the clients, it will not be able to give up any of the free money. Who would? Generally speaking, I'm not jazzed about software plans where, like it or not, you are wedded for life. It cannot be a good decision to choose such a route. This complaint, ironically, spells that out.

Author: John C. Dvorak @ Marketwatch

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