Did SAP steal Oracle’s customers? As in, nefariously done on the sly as opposed to, oh I don’t know, offering better products? That’s what you’d conclude if you believe the over-the-top aggressive amended complaint filed by Oracle the other day. But the reality of the case is anything but clear-cut. Dennis Byron, who has provided insightful guest columns on SearchSAP.com in the past, took a closer look at the issue in a recent blog post.
Byron raised a couple issues that deserve consideration:
- If SAP used old Oracle customers’ passwords to gain access to Oracle’s systems, why didn’t Oracle disable those accounts when the contract expired? Is it standard practice to leave the barn doors wide open for years, and then be shocked — shocked, I tells ya! — when someone comes by and takes a peek inside?
- After raising hell with the initial complaint, why, exactly, did the really nasty talk about “aiding and abetting” and “conspiracy” suddenly evaporate in the second filing?
Furthermore, Byron points out, the customers covered here (former JDE, PeopleSoft etc.) stems from a frenzied series of acquisitions that happened years ago. Back then, there was a lot of uncertainty for the new Oracle users, and SAP was more than happy to bring concerned companies into the safe SAP fold. But the lawsuit focuses on the past couple months, when the dust had been settled for quite some time. Why are former PeopleSoft and JDE customers bailing out now, 2 years after the acquisition by Oracle?
Interesting stuff for sure. Stay tuned as the case goes to court and, we would imagine, a solid return-salvo from SAP in the weeks ahead.
Just when things appear to die down a little bit, the Oracle-SAP lawsuit always seems to bubble back up. Today it was Oracle stirring the pot, as it tacked on copyright infringement and breach of contract complaints to its existing suit of SAP’s TommorrowNow division (SAP TN) in San Francisco federal District Court.
The amended complaint, which now checks in at 51 pages, makes particular note of some alleged similarities between Oracle’s and TomorrowNow’s Daylight Savings Time fixes. Quoting from the amended complaint:
In at least one instance, SAP TN has also, publicly displayed, distributed, and thereby profited from Oracle’s copyrighted Software and Support Materials. In December 2006, Oracle developed a knowledge solution related to the recent early change to Daylight Savings Time (the “DST Solution”). The DST Solution is a narrative document with specific instructions for how to conform certain Oracle software to the new Daylight Savings Time change. Oracle fielded more than a thousand service requests from its customers related to the Daylight Savings Time change, and its DST Solution helped resolve more than 750 of them.
SAP TN’s “solution” is substantially similar in total — and in large part appears to be copied identically from — Oracle’s DST Solution. SAP TN’s copied version even includes minor errors in the original DST Solution that Oracle later corrected. SAP TN’s version also substitutes an SAP TN logo in place of the original Oracle logo and copyright notice.
It’s no secret that these two enjoy tweaking each other whenever possible, and the language used throughout the complaint is a prime example. It’s worth going through and reading it for yourself, but here’s one example:
It was not clear how SAP TN could offer, as it did on its website and its other materials, “customized ongoing tax and regulatory updates,” “fixes for serious issues,” “full upgrade script support,” and, most remarkably, “30-minute response time, 24x7x365” on software programs for which it had no intellectual property rights. To compound the puzzle, SAP continued to offer this comprehensive support to hundreds of customers at the “cut rate” of 50 cents on the dollar, and purported to add full support for an entirely different product line – Siebel – with a wave of its hand. The economics, and the logic, simply did not add up.
Oracle has now solved this puzzle. To stave off the mounting competitive threat from Oracle and to do so without making the requisite investment, SAP unlawfully accessed, copied, and wrongfully used Oracle’s Software and Support Materials.
The gloves have been off for some time. Now it seems the combatants are reaching for the Louisville Slugger. We will, of course, continue to follow the lawsuit as it continues its long, slow boil towards a conclusion.
In a guest column on SearchSAP.com today, Jon Reed discussed many skills that will be important for SAP consultants in the future. As is sometimes the case, not all of Jon’s thoughts could fit into the piece. But, he had some interesting thoughts on industry specialization, so here’s a bonus piece of advice from Jon for SAP consultants going forward:
Hopping from industry to industry will be risky business. Up until this point, consultants with solid implementation skills could jump from industry to industry in search of the best project at the best rate. However, both SAP and its customers are emphasizing the importance of consultants who know a particular industry. I had one SAP product manager tell me that consultants without an industry focus would have a hard time in tomorrow’s SAP market.
SAP ERP 2005 ships with 25 different industry solutions — industry solutions no longer have separate and sometimes confusing release schedules. Consultants who know how to apply an industry’s “best practices” are going to be in demand, which also emphasizes the importance of overall business know-how as opposed to configuration skills.
So if customers are asking for more industry experience right now, why is it a future skill? Because as much as customers want this type of industry background, the SAP consulting market is hot enough that I’m not sure SAP hiring managers will always be able to hold out for industry-focused consultants. But in the future, consultants with a consistent industry focus are going to have a big edge and it may eventually become a non-negotiable requirement.
We’ll plan on running the second installment of Reed’s piece (“The present”) tomorrow and the final chapter (“The past”) on Friday.
Just a quick update on the Great SAP Leaders Among Us podcast contest. As you may recall, the topic is BI/BW challenges and how regular SAP users like yourself overcame those obstacles. Now we have whittled the field down to two strong candidates, but we need you to cast your vote to decide who wins the grand prize. There’s plenty of useful tips to be gained, yet both podcasts clock in at just five minutes each. Tune in today!
As you may have seen in the news, there’s a movement afoot to boost the number of H1B visas next year, from 65,000 to 115,000, plus the continuation of 20,000 visas for highly educated foreigners. It doesn’t take a genius to see why this idea isn’t received with open arms by American IT workers, especially not independent SAP consultants and others who would see a direct impact on both opportunities and compensation levels. Some, like the Washington Alliance of Technology Workers, are determined to put up a fight to save their jobs.
But then again, the hiring company always benefits from more options, more competition and lower rates, so it’s not a clean-cut situation. We asked veteran SAP career guru Jon Reed for a quick comment on the matter. True to form, he replied with a guest column:
The proposed increase in H1B visas would have an immediate impact on the SAP consulting market by expanding the availability of experienced SAP consultants. The compelling question is whether this is good or bad news. It all depends on where you land in the market. For SAP hiring managers and SAP customers, this is good news. Additional consultants means more choices and lower rates. For consultants trying to make a living in North America, anything that affects the supply and demand curve by increasing the supply of qualified consultants is decidedly bad news. More consultants on the market means lower rates and less opportunities. For those who believe strongly in fostering “American jobs for American workers,” any increase in H1B visa limits is also bad news.
On the other hand, there are quality H1 professionals from many different countries who will do a great job on projects when given the opportunity. Increases in visa limits is a good thing from their vantage point. As for where I stand, I can appreciate the validity of all of these different takes on the pros and cons of H1s. It’s also good to remember that some major areas of the SAP market, such as many Public Sector projects, cannot hire H1s for legal reasons, so an increase in the supply of H1 consultants does not affect all sectors.
The one thing I feel strongly about is that I don’t believe the H1B visa controversy should take on the tone of ethnic backlash. It’s important to remember that there are SAP professionals of all ethnicities who are U.S. citizens and permanent residents who are also impacted by the increase in the supply of H1B consultants. So it’s good to dial down the anger-filled ethnic angle and look at this from a calmer vantage point of whether an increase in H1s is really necessary to satisfy the demand for experienced SAP and IT professionals. That in itself is a worthy debate.
In the past years, I would have said that there are enough SAP consultants and that it would be better in the long run to preserve higher rates for good consultants and limit H1s. But with all the upgrade projects going on right now, you could make a serious argument that more senior SAP consultants are needed, and that companies would surely be glad to have the option to hire more H1B consultants also. This is a serious debate without any easy answers so I won’t attempt to provide one here.
Jon Reed is the author of the SAP Consultant Handbook and has been publishing SAP career and market analysis for more than a decade. Most recently, he served as the vice president and founding editor of SAPtips.
The Oracle lawsuit against SAP has kind of faded into the background since the news broke in March. There’s been a flurry of acquisitions on both sides of the fence, SAP and Microsoft have deepened their relationship, and a bunch of other stuff popped up around the Sapphire events in Atlanta and Vienna.
But the fight is far from over. The alleged misdeeds of SAP’s support organization TomorrowNow are not forgotten by Oracle, even as the first judge recused herself from the case. Indeed, first the Oracle team pushed through a measure to make sure SAP kept all relevant records around the alleged incident and now Larry Ellson has gone on the record stating that he would not accept an out-of-court settlement with SAP.
Not so fast there, Larry. Is SAP really on the ropes, trying to weasel it’s way out from under certain defeat? Columnist and veteran SAP expert Josh Greenbaum doesn’t think so.
In the absence of a definitive statement offering a settlement — and there has been no such offer — Larry’s statement to the German press is pure posturing. SAP is on record as being willing to see this battle through, and I expect them to. But I’m not surprised at Ellison’s statement: this lawsuit is all about posturing, and has no real merit with respect to its principle allegations, particularly those that allege direct senior managment involvement and approval in the actions Oracle is saying happened.
At some point I think Oracle should worry that this lawsuit could backfire: there’s a danger for Oracle is pursuing this, as discovery would put a large amount of unflattering information regarding Oracle’s maintenance fees and contracts into the public domain.
That’s a valid point for sure. We asked Steve Bauer, SAP’s VP of global communications, to comment on SAP’s side of the story on Ellison’s latest play. Here’s the official response:
Through this suit, Oracle seeks to limit customer choice and impede competition. SAP and TomorrowNow offer a viable alternative to Oracle support that the marketplace has embraced. SAP firmly believes that third-party support, which meets a growing customer need, plays a vital role in the enterprise software industry. SAP will vigorously defend against the charges brought by Oracle.
Our take on this: Oracle is trying to pull a fast one to confuse the market. SAP never offered a settlement, and those of you who attended Sapphire Atlanta may recall SAP Americas CEO Bill McDermott making SAP’s stance quite clear weeks before Ellison made this latest move. “We will, in the coming days, vigorously respond to this allegation, and the strength of our response will be clear and decisive,” McDermott said.
There’s a good chance that Oracle is trying to blow as much hot air as possible into this debacle now in an attempt to shame and discredit SAP, only to fold before the rubber hits the road. There has already been an extension to give Oracle more time to put together an “amended complaint,” allowing Oracle two more weeks to strut around. Will there be a second extension request? Will Oracle really have the guts to lay all the cards on the table? Time will tell, but Ellison’s latest move reeks to high heavens.
The peculiar SAP-Microsoft partnership continues to deepen. We’ve written about this in the past, but I think Jon Reed summed up the situation best with the image of “one set of hands shaking and another set in a thumb war“. In the upper end of the market, SAP and the ‘softies are best buds, as evidenced by their solid Duet commitment. Last I heard they were well past the 300,000 user mark and it was one of the big stories at Sapphire Atlanta last month.
This week was Sapphire Vienna, and sure enough, another big SAP-Microsoft story dropped: SAP and Microsoft are setting up a joint German lab to marry SAP’s Business Suite with SQL Server 2005. That makes a lot of business sense, and it doesn’t take much imagination to see this as another way of teaming up and sticking it to Oracle. Ellison had a pretty big week too by the way — the Agile acquisition alone is enough to keep SAP on it’s toes.
But then there’s this midmarket business, the elephant in the room neither company seems to want to talk about. Microsoft is serious about Dynamics, and they’re starting to get nods of recognition. But SAP is betting hard on A1S, the upcoming on-demand ERP solution targeting the niche of customers that fall between the already existing SMB solutions BusinessOne and All-in-One. Furthermore, SAP made the public commitment that it will nearly triple its customer base by 2010 — a goal that puts it squarely on a collision course with its friends in Redmond. Indeed, as 2010 and the inevitable SMB surge SAP needs in order to hit the magic 100,000 customer-mark draws near, I predict considerable friction at just about the same time Duet 2.0 rolls out.
But for now, everything is peachy. Kumbaya, and so on.
Sapphire 2007 — Vienna this time, not Atlanta — is already proving to be an interesting event with many new stories and announcements. Unfortunately, none of the SearchSAP.com staff had the opportunity to attend this year. Good news is, we have some local contacts including veteran expert Axel Angeli helping us keep tabs on things — watch for his comments and exclusive interviews on the recently announced Maxdata acquisition.
Among the new announcements, SAP GRC Risk Management is a new application tapping into the rising interest in GRC we saw at Sapphire Atlanta. The new addition promises to bring risk management to a more strategic, high-level plane where it becomes part of practically every aspect of a business. Components include Risk Planning, Risk Identification and Analysis, Risk Response and Risk Monitoring, IT News Online reports.
John Blau from InfoWorld reports that SAP is acknowledging problems with A1S, the on-demand ERP solution we wrote about last week, but adds that “nothing has changed” according to SAP executives. Slated for Q1 2008 release, rumors were circulating that it may be pushed back to a later date. SAP now insists this will not happen, Blau reports. Time will tell how this plays out, but rest assured we’ll be there to cover it when A1S hits the market.
On a side note, Larry Dignan at ZDNet brought up an interesting point about SAP’s globalization efforts as reported in the Wall Street Journal last week. With Agassi gone, he said, things get more difficult for a company many perceive as a tad stodgy and inflexible. Compounding the issue is a somewhat unorthodox methodology for going global on such a broad scale. From the WSJ article:
“Few companies try to globalize from top to bottom. Many companies build extensive sales, service and manufacturing operations abroad, but most keep top posts and important areas like corporate strategy and product development close to headquarters. Microsoft Corp., for instance, continues to set software strategy from Redmond, Wash., even as it hires thousands of programmers in India. SAP, by contrast, split up its pivotal product-development effort into eight centers around the globe, directed from California by Mr. Agassi.”
What happens now? Dignan describes it as a tug-of-war between the continents, and that rings true. The vacuum left by Agassi’s abrupt departure won’t be filled with a snap of the fingers. Having said that, does this mean SAP’s globalization efforts are about to implode? Most certainly not. The course is set and the juggernaut is in motion — the only question is how much friction there will be in the year ahead as a new equilibrium (or something close to it) is established.
By now everyone has been affected by at least one aspect of the advanced Internet technology dubbed ‘Web 2.0‘; it’s the technology that lends a personal touch to what would otherwise be cold information.
This video may help the people out there who are not so familiar with Web 2.0 appreciate this “transition” just a little more.
Person-to-person contact, a major theme in Web 2.0 and in this video, could potentially benefit SAP enterprise software through personalization and most of all comfort. SAP has waited before picking up on these trends until now because blogs and wikis that have the Ajax style functionality have proven their worth by the test of time.
During Kagermann’s keynote he mentioned something about failures in the past in regards to their applications. He goes on to talk about how SAP is supposedly going to slowly and accurately develop material in the future so that everything produced is a success. Of course this kind of talk could be interpreted as “I’m sorry, we’ll do better next time”, but this new adoption of communication truly seems to be a step in the right direction.
In his blog, Michael Cote writes, “I’m beginning to think that ‘Web 2.0′ is set to be the ‘SOA’ for [at least] this year and [possibly for] upcoming years”. Cote also points out that SAP has waited a long time to release this technology and when they launch these applications their users will be asking about what “web 4.0″ has to offer. I agree with Cote, there are new trends that will make their presence known, but to be fair SAP is utilizing the core features of the Web 2.0 revolution that have already proven their worth.
Even though SAP’s applications that utilize these Web 2.0 functions have received mixed reviews, one thing is clear: SAP is serious about Web 2.0.
Read more about how SAP plans to utilize Web 2.0 for the SOA.
The Web 2.0 video, Web 2.0 … The Machine is Us/ing Us was created by Dr. Michael Wesch, assistant professor of cultural anthropology at Kansas State University.
There have been whispers about SAP’s new ERP on-demand offering for quite some time, but precious little official information was available. Now the cat is out of the bag… Almost.
SAP CEO Henning Kagermann and the top execs all mentioned it in their speeches and interviews at Sapphire 2007, but the product is still largely an unknown. AMR Research and others have nailed down some basic facts:
- It targets the 50-500 user crowd.
- It is based on the NetWeaver platform, adhering to the SOA by Design mantra.
- It shares services repository with the Business Suite.
- It has a set of unique application process components for common business tasks such as order entry and invoicing.
So far so good. But why the sudden change to an on-demand model, especially in light of the luke-warm reception of last year’s CRM on-demand? And what’s the deal with the “try before you buy” feature Hasso Plattner and others were talking about? We asked Jeff Stiles, senior vice president of Solution Marketing at SAP to clarify three basic questions:
1. Why hosted? Did people ask for this, or is there a bigger strategic vision behind this move?
The new solution […] will be targeted to serve customers who have not traditionally been buyers of enterprise suites. One key barrier for these midsize companies has been the lack of or limited number of IT staff to implement, configure and manage enterprise applications. Customers with this profile have clearly told us that an on-demand delivery model will serve them well.
2. Is SAP planning to make more products available with this model?
SAP, along with our partners, provide a number of products that feature various hosting options, including traditional hosting, on-demand and outsourcing. We offer a broad range of on-demand offerings today, including CRM and SRM. We see on-demand as one viable and important delivery topology along with traditional on-premise approaches, and we intend to continue making the right products available with this as a deployment option.
3. How extensive is the “try before you buy” feature going to be?
We’re working actively with early customers to understand exactly what they’re looking for in determining the scope of evaluating “A1S” as well as how to best enable them to do so. We expect to offer a fully functional system configured to individual customer needs for their evaluation. Customers have also told us that it is very important for them to then be able to move that system into production once they’ve seen it, tried it, and bought it.