Oracle increases accusations in SAP lawsuit

We're finally getting a look into what Oracle has discovered in the discovery phase of its lawsuit against SAP and its subsidiary TomorrowNow (TN), which provided third-party maintenance and support contracts for Oracle products.

In an amended complaint filed today, Oracle paints a vivid picture of TN knowingly misappropriating Oracle's intellectual property and SAP knowingly choosing to allow TN to continue in its allegedly illegal operations. Oracle claims that documents uncovered during the discovery phase have "revealed that [SAP] knew from the start that SAP TN's business depended on this extensive illegal scheme...One of the key members of SAP's due diligence team--a former PeopleSoft employee--reported directly to board member [Shai] Agassi: "I am not sure how TomorrowNow gets access to Peoplesoft software, but its [sic] very likely that TomorrowNow is using the software outside the contractual use rights granted to them."

Oracle also claims that during the acquisition of TN by SAP that TN's owners "flatly refused to give any such assurances" that TN respected Oracle's IP rights.

Furthermore, Oracle claims to have uncovered evidence of an effort within SAP to move to a more conservative approach to delivering support services, a so-called "Project Blue." As I read Oracle's complaint, it appears that Project Blue would have involved TN giving up the maintenance of centralized copies of PeopleSoft and JDE and doing all customer support remotely on the customer's system. Oracle claims that SAP and TN eventually decided against Project Blue.


The complaint is now 70 pages, with substantial detail, and is quite an interesting read. Computerworld has a short article on it. But read Oracle's complaint to get a full picture.

Oracle chose to file this amended complaint today, the day before SAP reports its second quarter earnings, guaranteeing that analysts will be asking questions about this tomorrow.

This case puts a real obstacle in the path of the third-party maintenance model, a model that I hope will prove viable in the long run. Major software vendors, such as both Oracle and SAP, have too much power, too much control over their installed base customers and too little competition. Third-party maintenance gives customers another option and leverage over the unrestrained pricing power of the major vendors. When you buy a Lexus, you are not obligated to go to the Lexus dealer for maintenance. Why should enterprise software be any different?

Nevertheless, third-party service providers have to operate within the restraints of fair competition. Hopefully this case will be resolved in a way that makes the boundaries clear, so that clients have choices.

Author: Frank Scavo @ fscavo.blogspot.com

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Oracle adds Bruce Chizen to its board

Database software giant Oracle Corp. put former Adobe CEO Bruce Chizen on its board.

Chizen becomes the 13th director at Redwood City-based Oracle (NASDAQ: ORCL).

Other members of Oracle's board include:

* CEO Larry Ellison
* CFO Safra Catz
* Chairman Jeff Henley
* Stanford economics professor Michael Boskin
* Former Housing and Urban Development Secretary Jack Kemp.

Chizen, 52, was CEO of Adobe Systems Inc. (NASDAQ: ADBE) from December 2000 until November 2007. He also sits on the board at Synopsys Inc. (NASDAQ: SNPS).

Source: sanfrancisco.bizjournals.com

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Microsoft 'leapfrogs' Oracle with DATAllegro buy, analyst says

Microsoft Corp. said today it will buy data warehouse appliance maker DATAllegro Inc., a move that one analyst said should help the software maker gain a technical edge over market leader Oracle Corp. in the high-performance business intelligence market.

Financial terms were not disclosed. Microsoft said it will integrate DATAllegro's technology into its SQL Server database, for which a new version, SQL Server 2008, is expected in several months.

"For the first time ever, Microsoft has leapfrogged Oracle at the high end of the database market," wrote independent database analyst, Curt Monash, a former Computerworld columnist, in an e-mail. "Of all the data warehouse start-ups, DATAllegro was the one whose technology could be most smoothly rolled into Microsoft's or Oracle's product line. Microsoft was smart to snatch DATAllegro up."

DATAllegro specializes in server appliances that come installed with a version of the Ingres database optimized to handle as much as hundreds of terabytes of data.

One DATAllegro customer reportedly runs data warehouses totaling 450TB.

"While several other data warehouse start-ups have achieved more overall customer success, DATAllegro is second only to Teradata in proven high-end data warehouse scalability," Monash wrote.

James Kobielus, an analyst at Forrester Research Inc., also praised the buy "as a smart one."

DATAllegro has "a strong product, robust technology, skilled engineering team, and world-class hardware partnerships (including EMC, Dell, Cisco and Bull)," he wrote. It also greatly boosts Microsoft, which was a "relative laggard" in the growing data warehousing appliance market, he said.

Kobielus added that this also "sets the stage for rapid data warehousing vendor consolidation" and driving companies such as "Oracle, SAP and HP, in particular, to make strategic acquisitions" of DATAllegro's competitors, which include Netezza Corp., Greenplum and Dataupia Inc.

The 5-year-old Aliso Viejo, Calif., start-up was probably not hurting for cash. It received nearly $20 million in Series D funding in May, and has taken about $64 million in venture capital since its founding.

Most of DATAllegro's team will remain in California, and existing customers will be supported.

This article has been corrected since initial publication to reflect that Ingres is in fact the underlying database for DATallegro.

Author: Eric Lai @ www.computerworld.com

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