Feeds

Oracle demands another $211.6m from SAP

'Ahem, where's our interest on the $1.3bn?'

The essential guide to IT transformation

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. ®

The essential guide to IT transformation

More from The Register

next story
Apple promises to lift Curse of the Drained iPhone 5 Battery
Have you tried turning it off and...? Never mind, here's a replacement
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Linux turns 23 and Linus Torvalds celebrates as only he can
No, not with swearing, but by controlling the release cycle
Scratched PC-dispatch patch patched, hatched in batch rematch
Windows security update fixed after triggering blue screens (and screams) of death
This is how I set about making a fortune with my own startup
Would you leave your well-paid job to chase your dream?
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.