by Bruce Tyson

Created on: October 29, 2010

Some bad deeds won’t be overlooked; just ask SAP. It made the mistake of downloading tons of files from Oracle via an acquired company and now stands to lose upwards of $1.9 billion. Unable to reach a settlement, the two parties are preparing to meet in court next week, dragging a third tech giant, Hewlett Packard, into the fray.

Background

The battle between these two software giants stems from the 2005 acquisition of a software support firm called TommorrowNow. It just so happened that TomorrowNow had a deal with SAP’s competitor, Oracle, which gave them access to a significant amount of Oracle’s intellectual property. This property was accessed by SAP via TomorrowNow in the form of tons of files it downloaded (aka stole) directly from Oracle servers. The downloaded property presumably gave SAP insight into Oracle’s customer database, business operations, and proprietary code, as well as other Oracle trade secrets.

The Hewlett Packard factor

With the two software giants’ courtroom battle now ramping up, many might wonder why Hewlett Packard is involved in the mess. It turns out that HP recently hired one Leo Apotheker as its new CEO. Apotheker was formerly an executive with SAP and was active with the company during the time of the TomorrowNow acquisition. Even more interesting is that Mark Hurd, the previous HP CEO who was forced out by the board has since been named as co-president of Oracle.

If that isn’t enough, a key advisor to Oracle CEO Larry Ellison, Ray Lane, has been appointed as chairman of the board at HP. Lane, with inside knowledge of Oracle and the problem with the TomorrowNow fiasco at SAP, has stood up for the new HP CEO Leo Apotheker, much to Larry Ellison’s chagrin.

Some familiar with Oracle’s Ellison suggest that he is deliberately dragging HP into the muck in effort to kill its sales and stock price in advance of a takeover bid.

The issue at hand

In preliminary proceedings this week, attorneys for SAP have admitted wrongdoing by the company. The problem is that SAP is willing only to pay damages in the millions while Oracle wants to sap the company of billions.

It’s more than just winning, stupid!

Oracle CEO Larry Ellison has long been known for his aggressive business tactics that have led Oracle into being one of the leading software companies in the world. SAP wants to settle out of court, but Ellison appears unwilling to budge from his demand for nearly $2 billion from the company.

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