SAP Jettisons the Espionage Jetsam

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Includes: ORCL, SAP
by: The Stalwart

I was pretty surprised to see this from earlier this week:

Battling allegations of corporate espionage, business software maker SAP AG (NYSE:SAP) cut its ties with the leaders of a subsidiary that infiltrated rival Oracle Corp.'s (NYSE:ORCL) computers to fetch information about Oracle's products.

The shake-up disclosed Monday, including the resignation of TomorrowNow's chief executive and founder, Andrew Nelson, represents the latest fallout from a federal lawsuit that Redwood Shores-based Oracle filed eight months ago against TomorrowNow and Germany-based SAP.

Here's Frank Scavo's take:

What's going on? It would appear that SAP is coming to the conclusion that acquisition of TomorrowNow was a mistake in the first place. Taking maintenance and support business away from Oracle, getting involved so closely with Oracle's customers, and handling Oracle's intellectual property--even if all done within the law--is simply too difficult for Oracle's main competitor to manage. Whatever benefits SAP might gain by facilitating customers' migration away from Oracle are probably not worth the difficulty in avoiding the potential legal risk. It's too bad, because the nascent third-party support model has a lot to offer as an alternative to direct vendor support. It gives customers choices and puts the primary vendor on notice that it cannot take its maintenance and support business for granted. Unfortunately, SAP's misstep with TomorrowNow has been a setback for the model.

I still think third-party software maintenance has its place. This will just prove to be a temporary speedbump.

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