Posted by: Linda Tucci
CIO, maintenance, software
“This case is about the massive theft of Oracle’s software and related support materials through an illegal business model by Defendant Rimini Street and its CEO and President, Defendant Seth Ravin,” states the latest lawsuit filed by Oracle Corp.
Big bad-a** Oracle is back in court over third-party maintenance, using the same puffed-up language found in its 2007 lawsuit against SAP’s TomorrowNow, which accused the now-defunct third-party-maintenance provider of “corporate theft on a grand scale.” Get ready for Round 2 in the battle to protect the golden goose of Big Software — double-digit annual maintenance fees.
According to the lawsuit, Rimini’s “intrusions” have damaged Oracle’s support service business by causing the databases that host the software and support materials to freeze, to the detriment of Oracle customers. The phrase “massive illegal downloads” appears liberally throughout the suit.
Rimini’s Ravin has stated that the firm will fight the case. (For anyone interested in hearing Ravin in a less-scripted mode, I did an interview with him about the touchy topic of third-party software maintenance shortly after Oracle filed its lawsuit against SAP.) What I’ll be following and following up on is what the lawsuit means for the perennial third-party maintenance arguments, as well as for CIOs.
When Oracle sued SAP in 2007, I consulted lawyers and IT experts, who thought the suit carried a warning for CIOs. They advised CIOs who had moved or were considering a move to third-party maintenance to be mindful of how they transitioned from one provider to a competitor, and to review their contracts about nondisclosure restrictions. That risk to CIOs in that case was explicit.
In the 2007 case, Oracle called out Honeywell International Inc. as an example of how TomorrowNow used Honeywell’s passwords to allegedly download Oracle support materials beyond the scope of products “that Honeywell had licensed and to which it had authorized access.” Gartner also issued an advisory for CIOs.
Legal merits aside, I wonder whether we’ll see a backlash to this latest Oracle suit by customers, given the enormous pressure CIOs have been under to cut costs. I’ve talked to a number of CIOs this year who have dropped maintenance, and others, like Bill Yearous, who actually dropped Oracle after pricing went up.