Oracle v. SAP Legal Fight Gets Messier, Raises Tough Questions About Third-Party Maintenance

Details from new court documents show potential legal quagmires for both third-party maintenance and support providers and their customers. Will the case rock the whole third-party maintenance business? No, say TomorrowNow's rivals.

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The legal drama, uncertainty and notoriety have not helped TomorrowNow's prospects as a viable company. SAP put TomorrowNow on the block in late 2007, and it had an operating loss of approximately $35 million in 2007.

Will the claims in Oracle's lawsuit resonate with a jury? Was there a clear lack of management oversight at TomorrowNow and at SAP that ultimately harmed Oracle's business and finances (through alleged "lost profits")? These questions will have to wait until the companies present their sides to a jury—if the case even goes to trial. (A new trial date has been set for 2010; the case was originally scheduled for early 2009.)

However, many interesting legal and liability questions relating to software agreements have been raised by Oracle in the lawsuit and countered by SAP in its responses. One of the more important is a query that SAP poses in its response to Oracle's overall claims: "Do the licenses between Oracle and its customers prevent TomorrowNow from access to that software to provide third party support?"

Trouble for Third-Party Maintenance?

The market turbulence from unanswered questions like this one and others raised in the court documents could ultimately hurt the business prospects of third-party maintenance providers that support (for half the price) Oracle's cache of acquired application sets (PeopleSoft, J.D. Edwards and Siebel).

Three of the more well-known third-party maintenance providers are TomorrowNow, Rimini Street (which has been wooing TomorrowNow customers dissatisfied with SAP's intentions to sell off TomorrowNow) and netCustomer (which offers maintenance services from a 24/7 global support center in India).

TomorrowNow and SAP representatives are embroiled in the dispute and have repeatedly declined to comment on anything related to TomorrowNow.

NetCustomer's chairman and CEO, Punita Pandey, acknowledges that, due to the lawsuit, the third-party support market is "under scrutiny and there's a lot of interest lately," she says.

In the Oracle v. SAP court documents that have been released, dozens of specific questions have been raised by both sides, and the lingering issue seems to be: If a third party is providing maintenance on the customer's code (which is Oracle's), then how can that third party provider not "touch" the code at some point in the process? And how does that match up with the software licensing agreement?

Pandey says that "people keep making a big deal about 'touching the code.'" However, she points out that most enterprise software implementations have a "medium to high degree of customizations before a customer can use it," she says. "In more cases than not, companies use a third party to assist them with the implementation and customization processes." And that third party has to touch the code at some point.

"Now it's very hard for me to imagine what licensing agreement between a company and their software vendor, whichever one that is, says that you cannot use anyone else to touch this software," Pandey says. Her point, of course, is that third-party maintenance providers act in the same capacity—just at the other end of the software lifecycle.


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