Who Is Oracle's Real Target in $2 Billion Software Theft Trial, SAP or HP?
In a trial that began November 1, technology giant Oracle is seeking more than $2 billion in damages from enterprise software leader SAP, as compensation for the theft of Oracle software by a now-closed SAP subsidiary. But for once the money is almost beside the point. In this Silicon Valley soap opera it's more about public relations, outsized personalities, and old (and new) rivalries than the size of a potential jury award. And Oracle's true target could be hardware vendor HP, with SAP as collateral damage.
Oracle CEO Larry Ellison has been quoted as saying that SAP's former CEO LÉo Apotheker was himself involved in the theft of Oracle's intellectual property by TomorrowNow, an SAP subsidiary that performed maintenance and upgrades to clients using Oracle software. Oracle sued SAP over the theft in 2007, and SAP shut down TomorrowNow in October 2008, three years after it had acquired the company and several months after Apotheker become CEO. Oracle has threatened to call Apotheker as a witness in the trial, taking place at the Oakland division of U.S. District Court for Northern California.
Apotheker's new job is CEO of HP, and in a bizarre coincidence, his first day on the job, November 1, coincided with the trial's first day of jury selection. (Opening arguments are scheduled to begin today.) HP and Oracle have been entangled in their own drama since HP fired CEO Mark Hurd this past summer for falsifying expense reports, ostensibly to cover up his relationship with a female contractor. Soon after, Oracle hired Hurd as its president while Ellison ridiculed the HP board for its mishandling of the situation and for letting Hurd slip through their fingers.
Ellison, known for his brash statements, has been quoted about the SAP/Oracle situation in the San Jose Mercury News saying "LÉo knew all about the stealing. In fact, Leo did not stop the stealing until seven months after he became CEO." Ellison also told the newspaper "My guess is that HP's new chairman, Mr. (Ray) Lane, will keep HP's new CEO, Mr. Apotheker, far far away from the courthouse until this trial is over."
According to published reports, it's not clear if Apotheker is even currently in the U.S. and therefore subject to a potential court subpoena. However, HP has noted in a statement that Apotheker has already given a sworn deposition in the case. In an October 11 letter, HP's incoming board chairman Ray Lane wrote: "The facts are: TomorrowNow was never under Mr. Apotheker's supervision. And it was Mr. Apotheker who, as CEO of SAP, shut down TomorrowNow."
However, Apotheker was in a senior position as head of SAP sales prior to his ascension to CEO, and he served on the executive board, which oversees the entire company, from 2002 until he resigned from SAP this year.
But there's more than big egos and name-calling to this story. HP's selection of Apotheker has been seen as a signal that HP is looking to expand from hardware into commercial software—a field where Oracle (and SAP) have been dominant players. For its part, Oracle has been moving on to HP's traditional turf by starting to sell computer hardware. Until a few months ago, Oracle and HP were close partners; they are well on their way to becoming sharp-elbowed rivals.
SAP has already admitted to wrongdoing by improperly downloading files from an Oracle website, so issues at the trial will center on the scope and amount of damages rather than deciding the facts of the case. While Oracle is seeking more than $2 billion, based partly on the value of the downloaded software, SAP attorneys say the damage is in the "tens of millions." But the case could cost SAP more in bad public relations than in actual dollars if Oracle can demonstrate that top SAP executives knew of and approved the thefts.
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Is Anyone Good Enough for HP?
Mark Hurd, Oracle and the Retail Industry
HP, Oracle Settle Mark Hurd Lawsuit
Oracle CEO Larry Ellison has been quoted as saying that SAP's former CEO LÉo Apotheker was himself involved in the theft of Oracle's intellectual property by TomorrowNow, an SAP subsidiary that performed maintenance and upgrades to clients using Oracle software. Oracle sued SAP over the theft in 2007, and SAP shut down TomorrowNow in October 2008, three years after it had acquired the company and several months after Apotheker become CEO. Oracle has threatened to call Apotheker as a witness in the trial, taking place at the Oakland division of U.S. District Court for Northern California.
Apotheker's new job is CEO of HP, and in a bizarre coincidence, his first day on the job, November 1, coincided with the trial's first day of jury selection. (Opening arguments are scheduled to begin today.) HP and Oracle have been entangled in their own drama since HP fired CEO Mark Hurd this past summer for falsifying expense reports, ostensibly to cover up his relationship with a female contractor. Soon after, Oracle hired Hurd as its president while Ellison ridiculed the HP board for its mishandling of the situation and for letting Hurd slip through their fingers.
Ellison, known for his brash statements, has been quoted about the SAP/Oracle situation in the San Jose Mercury News saying "LÉo knew all about the stealing. In fact, Leo did not stop the stealing until seven months after he became CEO." Ellison also told the newspaper "My guess is that HP's new chairman, Mr. (Ray) Lane, will keep HP's new CEO, Mr. Apotheker, far far away from the courthouse until this trial is over."
According to published reports, it's not clear if Apotheker is even currently in the U.S. and therefore subject to a potential court subpoena. However, HP has noted in a statement that Apotheker has already given a sworn deposition in the case. In an October 11 letter, HP's incoming board chairman Ray Lane wrote: "The facts are: TomorrowNow was never under Mr. Apotheker's supervision. And it was Mr. Apotheker who, as CEO of SAP, shut down TomorrowNow."
However, Apotheker was in a senior position as head of SAP sales prior to his ascension to CEO, and he served on the executive board, which oversees the entire company, from 2002 until he resigned from SAP this year.
But there's more than big egos and name-calling to this story. HP's selection of Apotheker has been seen as a signal that HP is looking to expand from hardware into commercial software—a field where Oracle (and SAP) have been dominant players. For its part, Oracle has been moving on to HP's traditional turf by starting to sell computer hardware. Until a few months ago, Oracle and HP were close partners; they are well on their way to becoming sharp-elbowed rivals.
SAP has already admitted to wrongdoing by improperly downloading files from an Oracle website, so issues at the trial will center on the scope and amount of damages rather than deciding the facts of the case. While Oracle is seeking more than $2 billion, based partly on the value of the downloaded software, SAP attorneys say the damage is in the "tens of millions." But the case could cost SAP more in bad public relations than in actual dollars if Oracle can demonstrate that top SAP executives knew of and approved the thefts.
For related content see:
Is Anyone Good Enough for HP?
Mark Hurd, Oracle and the Retail Industry
HP, Oracle Settle Mark Hurd Lawsuit