SAP is shutting down TomorrowNow, its software support business that is at
the heart of a lawsuit with rival Oracle.
The Germany-based software giant said in an announcement Monday, July 21,
that it was working with TomorrowNow’s 225-plus customers to help them find
alternative software support options, including the possibility of returning to
support from Oracle for customers on PeopleSoft, JD Edwards or Siebel
applications.
It is unclear what effect SAP’s decision to close TomorrowNow may have on the
litigation, in which Oracle accused TomorrowNow of stealing support materials
.
“It’s impossible to predict” whether the move will lead to a settlement of
the suit, SAP spokeswoman Lisa Poulson said. “SAP is very interested in a
settlement and is working toward that.”
Oracle declined to comment on the decision to close TomorrowNow or its effect
on a possible settlement.
SAP bought TomorrowNow in 2005. TomorrowNow’s business model was to offer
low-cost, third-party application support, meaning it handles such issues as bug
fixes for customers. There are a number of firms offering such independent
software maintenance services, including Rimini Street.
Vinnie Mirchandani, founder of technology advisory firm Deal Architect,
argues that the death of TomorrowNow does not spell the end of third-party
software support arrangements.
“One price does not fit all in any market category, but software vendors keep
ignoring that truism for maintenance,” Mirchandani wrote in a blog posting
Monday.
“Third party service like that offered by Rimini is attractive to mature
customers who have little interest in future releases and want to pay less for
current ones.”
Months ago, SAP said it was exploring the possibility of selling TomorrowNow.
Poulson said there was some potential buyer interest in TomorrowNow, but
winding down operations was in the interest of the unit’s customers.
SAP said it intends to “conclude the wind-down process” before the end of
October.
In March 2007, Oracle sued SAP, alleging “corporate theft on a grand scale.”
SAP responded that TomorrowNow was authorized to download materials from
Oracle’s Web site on behalf of TomorrowNow customers, but acknowledged “some
inappropriate downloads.”
In November, SAP said several senior managers of TomorrowNow, including the
unit’s CEO, had resigned.
The lawsuit between the firms intensified earlier this year,
with Oracle accusing its archrival of stealing copies of Oracle’s actual
software applications.
—Ed Frauenheim