For pure entertainment value, the Oracle-SAP trial will be tough to beat: with high-profile witnesses ranging from those eager to be there (Oracle CEO Larry Ellison) to those who'd rather be chewing their arms off (HP CEO Leo Apotheker), and with claims of industrial espionage and demands for billions of dollars in damages filling the air, it promises to offer some salacious peeks behind the curtains of the IT industry.
In the tech world, industrial espionage and intellectual-property theft are of profound importance, and Oracle will be making that case as vigorously and bluntly as possible—but that's not going to the issue with the biggest long-term impact coming out of the trial.
SAP's going to have to pay Oracle a whopping amount of money—the company has set aside a reserve of $160 million against damages, but Oracle is saying it has been injured to the tune of about $2 billion. But, that's also not the trial-related issue with the biggest long-term impact.
Various SAP executives, including Apotheker, will almost certainly be called to the stand, and Oracle will do its utmost to extract from them testimony that, in some form or another, will reflect poorly on SAP in its ongoing and intensifying present-day competition with Oracle.
Larry Ellison will very likely testify, and he'll probably discuss in considerable detail the ins and outs of that savage competition between the two biggest and most-influential enterprise-application companies in the world. Some of that will be fascinating—and, since Ellison will be doing the story-telling, most of it will be entertaining—but that's also not the issue with the biggest long-term impact.
As my colleague Fritz Nelson recently reported, it is possible that federal officials could begin their own followup investigation based on testimony that could come to light at the trial, and while that would certainly be a most-unwelcome distraction to SAP, it's also not the issue with the loudest echo that'll resound from this trial.
Rather, that prize goes to the future (if any) of the long-standing strategic relationship between Oracle and Hewlett-Packard, whose new CEO, Apotheker, is expected to be a primary figure for the defendants due to his long-time service as an SAP executive, including seven months as its sole CEO from mid-2008 until early 2009.
After all, HP and Oracle jointly support 100,000 customers as part of their 25-year partnership, which HP's website anachronistically describes as having "executive alignment that starts at the top and runs deep."
Based on Ellison's recent acerbic public comments about Apotheker and his alleged role in possibly knowing about and/or condoning the theft of Oracle software by a now-defunct subsidiary of SAP, it is hard to imagine that Oracle and HP would be willing to continue to engage in widespread sharing of future product plans and other types of high-value IP that have allowed the two companies to provide heightened levels of performance and service for shared customers.
That's the real strategic outcome of this trial: will the HP-Oracle alliance survive? Or will those 100,000 customers have to rebuild new and separate working relationships with each company?
Oh, sure, SAP will have to pay Oracle an eye-popping sum, but SAP's aware of that. It's a well-heeled company with strong cash reserves, and even if the court rules that the total damages will come in closer to Oracle's figure of $2 billion than to SAP's figure of $160 million, SAP will be just fine financially.
Its reputation will certainly take a hit in the marketplace—but how much damage will that blow produce? As far as I can tell, none of SAP's current managers are on Oracle's witness list, and again as far as I can tell, none has been mentioned as entangled in the trial, which is now in its final phase of setting damages.
As for the impact on SAP, here's my sense of what will happen: