An ERP Vendor Soap Opera: A Close Look at SAP's Purchase (and Attempt to Sell Off) TomorrowNow

When SAP acquired cut-rate ERP service provider TomorrowNow, observers scratched their heads. How would the two work together? Then Oracle sued, alleging stolen information. SAP isn't waiting for its court date. It's ready to entertain buyers for TomorrowNow.

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“They were entering into new territory, in terms of rules, and how third-party software was maintained by someone else and protecting intellectual property,” Wang says. “There were rules being tested, and one would assume that not all the rules were clear.”

The lawsuit has also provided Oracle with an atypical public perch in its fierce rivalry with SAP. “It does give Oracle the higher ground for a change,” says Richardson.

In a July interview with CNet, SAP CEO Kagermann wouldn’t speculate on the scale of the problems or TomorrowNow’s fate, saying only that SAP would “do whatever it takes” to examine the problem. Kagermann acknowledged that since the lawsuit, “attracting new [TomorrowNow] customers is more difficult than it was before we were in this discussion. Retaining existing customers, I would guess, is not a matter of concern.”

Kagermann added, “If you ask me about the impact on SAP, I don't see an impact. If there is a certain impact to TomorrowNow, please have in mind that the TomorrowNow business is a very, very small fraction of our entire business.”

However small a financial impact the suit may have on SAP, Richardson of AMR says, “It’s been consuming Henning’s time ever since” the suit was filed. “I don’t think they can get rid of this business unit fast enough.”

What About TomorrowNow’s Customers?

For TomorrowNow’s customers, who have bought into its business model and have been caught in the middle of a legal fight between TomorrowNow’s owner (SAP) and its software vendor (Oracle), the announcement that TomorrowNow’s core leadership had left and SAP was considering a sale must have given them an early dose of Thanksgiving heartburn. (Several CIOs who are TomorrowNow customers turned down interview requests.)

TomorrowNow customers shouldn’t have been completely caught off guard, however. In a copy of an e-mail to customers obtained by CIO, former TomorrowNow CEO Nelson informed customers on Nov. 1, 2007, that there were some big changes ahead. “During the past two months,” he wrote, “our sales and services teams have reached out to individuals within your organization to discuss the establishment of a new software support environment on your computers and premises for use by our maintenance and support engineers.”

The e-mail continued: “On Wednesday, November 21, 2007, TomorrowNow will permanently shut down TomorrowNow service team access to, and use of, your software support environment that we built on your behalf on TomorrowNow computers and premises. To avoid potential disruption to your TomorrowNow Support Services after November 21, 2007, your organization will need to provide a new support environment that is not on TomorrowNow computers or TomorrowNow premises.”


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