SAP Unit to Defend Itself 'Vigorously' against Oracle Lawsuit

The Wall Street Journal reports Andrew Nelson, CEO of TomorrowNow -- the SAP subsidiary accused of corporate theft in a lawsuit by Oracle -- says he believes his firm has "done absolutely nothing wrong." He called the firm's business model "appropriate" and "legal." Last week in its suit filed in the U.S. District Court in San Francisco, Oracle said SAP-TomorrowNow engaged in "corporate theft on a grand scale" in a series of "high-tech raids." TomorrowNow allegedly gained access to proprietary information on Oracle's servers, in some instances by using its own customers' expired log-in information. CEO Nelson did not comment any specific allegations. The Journal said an Oracle spokeswoman declined to comment. Reuters quotes a former U.S. prosecutor in charge of computer crimes, who says a key point is whether individuals were acting alone or if SAP played any role in the alleged actions. A cyber security consultant questioned SAP's use of its own servers if it is in fact a case of corporate espionage. Separately, FTN Midwest analyst Doug Ashton wrote in a note Tuesday that he is "hearing about a potential blockbuster" deal in which SAP would acquire Amdocs, a company which provides customer management software systems to the telecom and cable sectors.

Sources: The Wall Street Journal, Reuters, Barron's
Commentary: Is Oracle Unwittingly Handing SAP The Winning Card? • Oracle Sues SAP for Corporate Theft • Oracle-SAP Lawsuit Shows Ugly Side of Enterprise Software
Stocks/ETFs to watch: SAP AG (SAG), Oracle (ORCL), Amdocs (DOX). Competitors: Microsoft (MSFT), International Business Machines (IBM). ETFs: Software HOLDRs (SWH), Vanguard Information Technology (VGT), iShares MSCI Germany Index (EWG)
Related: The lawsuit [pdf, Wall Street Journal]

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