SAP jettisons TomorrowNow

SAP announced late yesterday it is winding down the operations of TomorrowNow, the subsidiary embroiled in an Oracle lawsuit.

The business software giant bought the third-party support provider for Oracle and other applications in February 2005. In March last year, Oracle hit its rival with a US lawsuit, accusing TomorrowNow of allegedly stealing company secrets from its computer systems.

Although litigation in the Oracle lawsuit is ongoing, with SAP urging mediation at the same time as it said it might sell TomorrowNow, the German parent will now wind down the subsidiary company by 31 October 2008.

SAP said it is working directly with more than 225 current TomorrowNow customers to help them return to support from Oracle for those customers on its PeopleSoft, JDEdwards or Siebel applications or to transition to new support options.

“Our goal is to assist our customers in transitioning to a new support provider, including Oracle, without a disruption to their support during the wind-down process,” said Mark White, TomorrowNow executive chairman.

Since Oracle began its legal proceedings against TomorrowNow, SAP has tried to steady its subsidiary by announcing a raft of resignations including its chief executive Andrew Nelson late last year. At the time, SAP said it was considering several options for the subsidiary’s future, including its possible sale.

The Oracle suit alleges the support company used logins “stolen” from high profile customers to fraudulently access and download information from the database and software giant’s support website for competitive gain.

Since then, Oracle rejected SAP’s call for an early settlement, after it admitted discovering some “inappropriate downloads” in the course of investigating the Oracle allegations.

Dale Vile, principal analyst and managing director of research firm Freeform Dynamics, said SAP’s announcement was another example of customers getting forgotten as the two market giants fight for tactical advantage.

“The thing is that when I speak to these enterprises, they are very close to the edge of what they’ll tolerate in terms of ongoing support costs with perceived lock-in,” he said. “I can understand SAP and Oracle need to levy premium support for migration paths and re-architecting their products, but there may be a backlash at some point.”

Vile added that the demise of TomorrowNow was evidence of how the consolidation in this area of the software market had made it difficult for independents. “We’re seeing more managed services deals with the big system integrators to partition the maintenance costs, where they have the bargaining power an independent wouldn’t.”

SAP made no further comment on winding down TomorrowNow at time of writing. Oracle said it had no comment to make in response.

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