Over the past few years in which Oracle
That's more bad news for beleaguered SAP shareholders. In 2007, the company lost Shai Agassi, who was considered the next in line for the CEO gig. There was also January's revenue warning for license revenues, on which news the stock plunged 8%.
As for the lawsuit, we must travel back to 2004. Back then, Oracle spent billions on companies such as PeopleSoft and J.D. Edwards to bulk up its business-application offerings and compete head-on with SAP. To help counter the threat, SAP purchased a small company, TomorowNow (TN), in January 2005.
TN provides cut-rate maintenance services for products from PeopleSoft and J.D. Edwards. For SAP, the aim was to pinch Oracle's revenue streams and to capture some customers.
The problem is that TN was a little too enthusiastic and downloaded thousands of documents from Oracle's support site. Employees even used fake contact information to gain access.
But as I mentioned in an earlier article, I think this is really a side show. What are the actual damages to Oracle? Don't many companies go to competitor sites and use fake contact information?
Now it's a federal case, and perhaps Oracle can get some PR traction from the episode. For some customers, that might be a key factor in making a software decision.
Another benefit for Oracle is that TN may fade away. Because of the legal overhang, it's reasonable to assume that potential customers will be put off, and that means staying with Oracle.
Yet for companies the size of Oracle and SAP, these things are fairly trivial.
Instead, the main thing for investors to consider is that Oracle has a clear strategy for growth: buying up companies. Some of the recent deals include the $3.3 billion purchase of Hyperion Solutions in April and the $495 million acquisition of Agile Software
Despite the merger-and-acquisition success at Oracle, IBM
- Oracle Releases the Hounds
- Oracle Sues SAP, Overstates Business Progress
- Oracle Still a Hyperactive Acquirer