Oracle Corp, no stranger to publicly undercutting and courting rivals’ customers, has sued SAP AG, claiming the German software vendor stole documents from its web site to help it poach Oracle’s customers.
The 11-count, 44-page complaint, filed in a San Francisco court yesterday, Oracle claims SAP’s SAP TN subsidiary downloaded virtually all the software and support documents on its Customer Connection web site without proper authorization.
These were used, Oracle said, to help SAP TN offer support for PeopleSoft, JD Edwards and Siebel applications at half the price that Oracle charged. Oracle lost support customers to SAP as a result, according to the complaint.
This, Oracle claims, is corporate theft on a grand scale. The suit alleges violations of various federal and California computer crimes laws, unfair competition, trespass, and civil conspiracy.
SAP TN was formed when SAP bought TomorrowNow in early 2005, an attempt to capitalize on any customer discontent resulting from Oracle’s acquisition of PeopleSoft and JDE. TomorrowNow was in the business of providing third-party support for large enterprise applications.
SAP backed up the deal with the launch of Safe Passage, which promised to support Oracle applications while customers migrate to SAP software. Shortly after Oracle announced that it would acquire Siebel in October 2005, SAP announced that it would also support Siebel applications for a cheaper price.
How SAP could offer instantaneous, round the clock Siebel code support within a few weeks of Oracle’s acquisition announcement remained a mystery, Oracle says in its complaint.
Oracle has now solved this puzzle, it later says. To stave off the mounting competitive threat from Oracle, SAP unlawfully accessed and copied Oracle’s Software and Support Materials… SAP stole much of the Software and Support Materials directly from Oracle.
SAP released a statement in response to the suit: Until we have a chance to study the allegations, SAP will follow its standard policy of not commenting on pending litigation.
Oracle said that in late 2006 it discovered an unusually large number of downloads from its Customer Connect site. These downloads, which the complaint suggests may have been automated, were traced to an IP address in Texas that Oracle says belongs to SAP TN.
According to Oracle, when that IP address was blocked, SAP would log in from another of its IP addresses and continue downloading.
The wholesale nature of this unlawful access and downloading was extreme. SAP TN appears to have downloaded virtually every file, in every library that it could find, Oracle’s complaint says.
The suit names seven former JDE and PeopleSoft employees now known to work on SAP TN’s management team. On these grounds, Oracle claims, SAP TN cannot credibly claim ignorance of Oracle’s access rules.
The complaint names almost 30 companies whose login information is alleged to have been used by SAP TN to gain access to these support documents. Each one, presumably, once an Oracle customer and now an SAP customer.
In a specific example, Oracle says that Honeywell International’s login account downloaded 20 documents a month, on average, before the company switched to SAP TN. It then downloaded 7,000 documents in the space of two weeks, according to the complaint.
All this documentation and software clearly would give SAP TN a competitive edge when trying to poach Oracle’s customers.
The obvious irony in the lawsuit is that SAP’s attempt to woo Oracle customers with half-price support deals is near identical to the strategy Oracle is employing to poach Linux support deals from Red Hat Inc.
(There’s no small amount of chutzpah in the 44-page Oracle complaint, which at times reads like it has been stuffed with marketing collateral — the same kind of cocksure competitive grandstanding Oracle is wont to deliver in its calls with financial analysts – for the benefits of the wider reading public.)
The big difference is, of course, that nobody’s claiming Oracle has misappropriated confidential data from Red Hat.
If one cuts it down to its bare bones, the allegations amount to this: SAP used passwords belonging to customers it had won from Oracle in order to download Oracle support material without authorization.
Oracle is seeking a temporary and permanent injunction against SAP’s alleged activities, as well as financial damages and a commitment for SAP to delete all the data it is alleged to have downloaded.