Oracle may seek more than $1 billion damages from SAP in IPR lawsuit

Another war between software giants is set to begin, and it will be fought not on consumers' minds and computers, but in the US law courts. Database pioneer Oracle Corp. is reportedly seeking damages exceeding $1 billion (500 million pounds) in an intellectual property rights (IPR) lawsuit it has brought against arch-rival SAP AG, according to a court filing.

Oracle is suing TomorrowNow, an American subsidiary of Germany-based SAP, for corporate theft and alleges it illegally downloaded masses of Oracle customer service materials and passed those documents to SAP.

"Because defendants have not provided Oracle with critical information relevant to liability and resulting damages, Oracle does not yet know its damages with precision," Oracle said in a filing this week to the US District Court in San Francisco, California.

"But, even so, it appears Oracle's damages are, at a minimum, well into the several hundreds of millions of dollars and likely are at least a billion dollars."

SAP countered the charges in the joint discovery statement, saying, "Oracle speculates wildly about the amount of its damages 'claim' in this discovery report, even though more than a year after this case was filed, Oracle still refuses to identify with any precision the nature or amount of its alleged harm or even to provide the theory on which its damage claim is based."

SAP has said that employees of TomorrowNow, which specialises in customer support for PeopleSoft and JD Edwards software, authorized to download materials from Oracle's Web site on behalf of TomorrowNow's customers, but also acknowledged that "some inappropriate downloads of fixes and support documents occurred.''

But this information remained in TomorrowNow's systems, and SAP did not gain access to Oracle's intellectual property, according to SAP. In addition, SAP has already produced about 2.3 million pages of documents from 42 custodians, and under its proposed limit of 115 custodians, will turn over another 4 million records, according to the German major.

That total does not include an "additional 6 terabytes of data already produced in native form and non-custodian based documents and information to be produced from central repositories and the like," it said. "If Defendants' alleged wrongdoing is as pervasive as Oracle claims, that surely is enough discovery to allow Oracle to present its case."

SAP bought TomorrowNow in 2005 after Oracle bought PeopleSoft, which in turn had acquired JD Edwards - hoping to exploit uncertainty among PeopleSoft and JD Edwards customers as to how Oracle would support them.

An Oracle spokeswoman said the company would have no additional comment.

Andy Kendzie, a spokesman for SAP, also called Oracle's damages claims speculative.

"What I would stress is that these are strictly allegations, they haven't been proved," he said. "Our intent is not to litigate this in the press. We have said all along this is going to be the court's decision, and we're going to abide by the courts."

A joint discovery conference for the case is scheduled for 1 July, according to the filing.

Oracle specialies in developing and marketing enterprise software products, particularly database management systems. The corporation has arguably become best-known due to association with its flagship Oracle database.

The company also builds tools for database development, middle-tier software, enterprise resource planning software (ERP), customer relationship management software (CRM) and supply chain management (SCM) software.

For the last few years, Oracle has spent billions on acquisitions over the last few years to challenge SAP's leadership in ERP and CRM. It is the second largest software company in the world after Microsoft with annual revenues of $18 billion last year.

SAP is the world's largest business software company and the third-largest independent software provider in terms of revenues. It focuses on six industry sectors: process industries, discrete industries, consumer industries, service industries, financial services, and public services. It reported 2007 revenues of €10.25 billion ($16 billion).

Source: www.domain-b.com

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Oracle retains lead in database market

IBM and Microsoft still trailing, says IDC. The worldwide relational database management systems market saw a 12.6 percent growth spike in 2007 to $18.8bn compared to $16.7bn in 2006, according to IDC.

While new features and innovations helped drive up revenue, some of the market's overall growth is also attributable to fluctuations in currency exchange rates, noted the report's author, analyst Carl Olofson. The weak US dollar has help drive up software vendors' reported revenues outside the country.

Oracle once again took the top spot, capturing 44.3 percent of the market with revenue growth of 13.3 percent. IBM came in second with a 21 percent share, also logging a 13.3 percent revenue growth rate. It was followed by Microsoft, with 18.5 percent of the market and a 14 percent jump in revenue.

Sybase and Teradata rounded out the top five, garnering market shares of 3.5 percent and 3.3 percent, respectively.

Oracle's continued strength came from sales of database options, such as its Real Application Clusters offering, Olofson said. "Oracle Database 11g has experienced unusually high early adoption rates for a major release," he added.

The top five vendors take up more than 90 percent of the market, but "there is plenty of dynamism and growth potential" in the other 10 percent, Olofson wrote.

For example, the open-source database maker Ingres took just 0.1 percent of the market in 2007, but that represented a 206.6 percent growth rate, according to the report.

Author: Chris Kanaracus @ www.pcadvisor.co.uk

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Oracle shares down as outlook gives pause

Fourth-quarter results top expectations, but forecast disappoints. Shares of Oracle Corp. slipped in early trading Friday after the software giant reported a 27% increase in fourth-fiscal-quarter profit but issued a forecast that was at the low end of expectations.

Oracle's recent results beat Wall Street's estimates despite worries that a sluggish U.S. economy could crimp sales. The company said net income for the period ended May 30 rose to $2.04 billion, or 39 cents a share, from $1.6 billion, or 31 cents a share, in the year-earlier quarter.

Excluding special items, Oracle said net income for the quarter would have been 47 cents a share. Analysts were expecting earnings of 45 cents a share for the period, according to estimates from FactSet Research.

Revenue rose 24% to $7.24 billion. Wall Street had been expecting revenue of $6.85 billion. Oracle had previously projected revenue growth of 14% to 18%.

Shares of Oracle had run up nearly 20% in the past four months before the report. The stock slipped about 3% in early trading Thursday, moving down 65 cents to $21.90.
In a conference call late Wednesday, Oracle Chief Financial Officer Safra Catz said the company's strong sales should carry into its current quarter. But the company projected that earnings would come in between 24 and 27 cents a share for the period. Analysts were looking for 27 cents a share for the quarter.

"These numbers imply full-year license growth of 9%, which we believe is overly conservative even under adverse macroeconomic conditions given Oracle's ongoing market share gains in apps and middleware," Peter Goldmacher of Cowen & Co. wrote in a note to clients Thursday.

Tom Ernst of Deutsche Bank was less optimistic, writing that the company's strong fourth quarter was likely the result of heavy buying ahead of a planned price increase, which may have pulled sales out of the current period.
"While these tactical moves are consistent with Oracle's strategy to gain data center share in large enterprises, both bring business forward, are more likely to lead to shelfware and customer challenges, and potentially sacrifice longer-term growth," he wrote.

BEA's contribution

Oracle's most recent large acquisition was of so-called middleware provider BEA Systems Inc. in an $8.5 billion deal that closed in April. Middleware is used to connect disparate networks and programs.

While Catz said BEA delivered strong performance in the fourth quarter, she tempered expectations for the first quarter, saying BEA likely won't contribute more than $50 million to $60 million in new software-license revenue in the current period.
Oracle has expanded well beyond its roots as a database software provider by building up its middleware business and an applications software business to rival that of German goliath SAP AG.

Overall sales of new software licenses in the fourth quarter rose 27% over the year-ago quarter, Oracle said. The company had issued guidance for new license growth to be between 10% and 20% in the quarter. "We don't think our strategy is in any way running out of gas," Catz said. In a nine-inning baseball game, "I don't think we're even in the second inning at this point," she said. But while Oracle's fourth quarter is typically its strongest, its first quarter usually doesn't fare as well.

Catz said the company expects total revenue to grow between 18% and 20% in the first quarter from the total in the period a year earlier of $4.53 billion, while new software-license revenue should grow between 10% and 20%.

Author: John Letzing @ www.marketwatch.com

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