Posted by: Linda Tucci
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SAP AG sends word today that it’s putting subsidiary TomorrowNow, which provides third-party support for Oracle and other applications, out of its misery.
The German software maker said it will wind down the operations of TomorrowNow, ushering the firm’s current 225 customers back to the Oracle fold for maintenance by Oct. 31.
For non-SAP/Oracle aficionados, the Bryan, Texas-based subsidiary is the target of a high-stakes lawsuit filed nearly 18 months ago by Oracle Corp., accusing the third-party maintenance provider of practicing “corporate theft on grand scale.” The alleged crime: using passwords of former Oracle customers to download information “outside the purview of what the customer had licensed.”
SAP admitted that some of its TomorrowNow employees inappropriately downloaded Oracle materials. For an excellent chronicle of the legal battle, skirmish by skirmish, go to SAP’s website.
The TomorrowNow closing marks the end of a three-year boondoggle for SAP, which bought the firm in 2005 following Oracle’s $11 billion or so acquisition of PeopleSoft Inc. Started by former PeopleSoft engineers, the firm promised cheaper third-party maintenance for all those disgruntled PeopleSoft customers. SAP said in November that it was putting the subsidiary up for sale but determined that a sale would have been “an extremely complicated transaction for both the seller and the buyer.”
Our gloss for CIOs
When the suit was filed, we thought the 43-page complaint carried a message for TomorrowNot CIOs as well, namely to exercise all due care when moving from one maintenance provider to another. To read more about why the topic of third-party maintenance is so sensitive, go here.
For a provocative take on the trials, tribulations and merits of third-party maintenance, go to my interview with Seth Ravin, co-founder of TomorrowNow. Ravin sold TomorrowNow to SAP before moving on to start Rimini Street and recently passed up the opportunity to buy the company back.