Global CIO: In Oracle Trial, HP Might Pay Higher Price Than SAP
While SAP will have to pay archrival Oracle many millions of dollars, HP's paying a steep toll in ongoing distractions tied to its CEO and board.
Three things are certain regarding the Oracle-SAP trial slated to begin in the Bay Area in less than three weeks: SAP will have to pay Oracle a pile of money—and possibly a huge pile; Hewlett-Packard's ongoing quest for normalcy will be postponed by its new CEO being a key witness; and Oracle's witness list will include a range of high-profile executives including Larry Ellison, SAP founder and chairman Hasso Plattner, Oracle president Safra Catz, and others.
And it seems to me that of those three things, the most significant is #2: the ongoing distractions confronting Hewlett-Packard and new CEO Leo Apotheker, a longtime SAP executive who served briefly as its CEO.
The very last thing in the world HP wants or needs right now is exactly what it will be facing when the trial begins Nov. 1 over how much in damages SAP must pay Oracle for the illegal downloading of Oracle software that a former SAP subsidiary engaged in several years ago.
SAP has admitted responsibility for the actions of its former subsidiary, Tomorrow Now, and has said it will provide reasonable compensation to Oracle as reparations.
So the Nov. 1 trial is going to be all about what "reasonable" means: to Oracle, $1 billion might seem fair and square, but SAP will no doubt say that reasonable people would calculate the damages at more like $10 million or $20 million.
But here's why this really matters beyond the glitzy stuff of tens of millions of dollars and superstar executives making rare and compulsory appearances in a courtroom (I've listed some of the executives on the Oracle witness list at the bottom of this column): HP took a huge risk in hiring Apotheker to head the $130 billion company, and did so at a time when it was under enormous scrutiny following its ouster of former CEO Mark Hurd and some moves by the HP board that drew an astonishing level of publicity and criticism.
I don't think HP helped its case the other day when newly named chairman Ray Lane took to the public airwaves with a defense of Apotheker (in general, that public support was a good move) that included a glaring error about when and why Oracle put Apotheker's name on its witness list for the trial (in particular, that error was a very bad move).
Seeking to defend Apotheker and deflect the CEO's involvement in the Oracle-SAP trial as a meaningless gambit by those crazy folks over at Oracle, Lane sent a letter to the New York Times that included this comment: