Oracle demands another $211.6m from SAP
'Ahem, where's our interest on the $1.3bn?'
Oracle just keeps rubbing it in with application software rival SAP over the TomorrowNow fiasco.
In a court filing on Friday, which was reported by various news outlets (see here and there, Oracle has gone back to the US District Court for the Northern District of California in Oakland, where a jury just awarded Oracle a $1.3bn payout an SAP a very large spanking. SAP's former third party software support organization, TomorrowNow, which peddled tech support for Oracle's PeopleSoft, Siebel, and JD Edwards ERP suites and which was acquired by SAP in January 2005.
The problem with TomorrowNow, as SAP found out too late, is that TomorrowNow was indeed using Oracle's own copyrighted documents and software patches to fulfill its support contracts, which is what Oracle alleged in its March 2007 lawsuit, seeking billions of dollars in damages. SAP eventually admitted this was the case, as if that would somehow placate Oracle CEO and co-founder, Larry Ellison.
Uh, not so much.
With the $1.3bn in damages awarded to Oracle over the TomorrowNow theft, SAP acquisition of the small support company could go down as the worst software acquisition in history. And whoever did due diligence on the deal deserves to be sued by SAP. (Don't be surprised when that happens.)
In its Friday filing, Oracle's lawyers argued that SAP should pay "prejudgment interest" for 2005 and 2006. SAP has already agreed to pay $120m in legal fees to Oracle and was thinking the damages might be on the order of $28m to $41m for the 358 customers that TomorrowNow lured away from paying Oracle for support for its ERP stacks.
"We don't believe that Oracle is entitled to any additional compensation beyond the final judgment in this case," an SAP spokesperson told the Wall Street Journal.
Uh, no kidding.
SAP paid $10m to acquire TomorrowNow, which was supposed to be a thorn in Oracle's side, more of a PR stunt than a big-time revenue generator. SAP has not said how much revenue TomorrowNow generated between 2005 when SAP acquired it and when it was shut down in the summer of 2008, but assuming SAP was thinking about treble damages, then the unit drove maybe $14m in revenues across those 358 customers.
But if you do the math and if the US District Court in California gives Oracle the interest it is asking for, then SAP will end up paying $1.64bn for TomorrowNow, including the acquisition cost, fines, and interest. That's 4.58m per customer - a very big number. None of this takes into account the PR damage from buying a company that was stealing software and being harangued by Larry Ellison.
When does Oracle ask for interest on the interest? Sometime after SAP's appeal, if the company doesn't just cut the check to Oracle to make this whole thing go away. ®
It's an M&A.
It's about cash flow, revenue growth.
Who cares *how* they do their business (what business are they in again exactly?)
How exactly Oracle extrapolated $14m to > $1Bn (and got the court to *believe* it) is a mystery. Oracle didn't deserve to win but I'd say SAP did deserve to loose.
Our German friends have received a spanking worthy of the Moderatrix.
Relentless or what !
Wow those Oracle guys make the Israeli Defence Force look warm and cuddly :-))
$120 million in legal fees!! Those lawyers know a gravy train when they see one!!
Interest? What's that?
Certainly not something I get paid on MY savings.
Grumble grumble, macroeconomic mumble and mutter.