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4/24/2007
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SAP Is Investigating Oracle's Charges Of Theft, CEO Kagermann Says

The company plans to file a legal response in a few weeks; Kagermann wouldn't comment as to whether it's a countersuit.

SAP plans to respond to Oracle's lawsuit alleging corporate data theft in a few weeks, said SAP CEO Henning Kagermann in a sit-down interview with InformationWeek Tuesday. He also indicated SAP is doing its own investigation into the charges.

"We have policies in place to ensure obligations as management," Kagermann said. "Nevertheless, having policies is one thing, having them enforced is another thing. We have to have a complete picture." The company plans to file a legal response next week; Kagermann wouldn't comment as to whether it's a countersuit.

In its March lawsuit, Oracle alleges that SAP employees pretended to be Oracle customers to log on to one of the company's Web sites and copy proprietary technical and customer-support data. Describing SAP's actions as "corporate theft on a grand scale," Oracle claims that SAP gathered the support documentation to provide cut-rate support for Oracle products, then shift those companies to SAP products.

Some might argue that Kagermann's admission of even the possibility that policies weren't followed could indicate a weakness in its defense against Oracle's claims. However, it seems to underscore the personality of a CEO who says he insists on playing above board. Kagermann, soft-spoken and with no discernable ego, says fair play includes not paying attention to any of its archcompetitor's abrasive publicity tactics, such as having employees stand outside the convention center handing out Oracle bags to attendees of SAP's Sapphire conference in Atlanta this week.

"I don't like their style; why should I adopt it?" Kagermann asked. "I don't think it's helpful. They should focus on their customers."

Kagermann said this includes making primarily small acquisitions that make sense, in stark contrast to Oracle's spending billions on acquisitions. SAP won't "play games" with customers by trying to sell them applications based on different designs and technologies, he said.

SAP is the first enterprise software company to deliver a service-oriented architecture designed to make business processes more flexible and integration easier, Kagermann said. Its My SAP ERP 2005 suite, released last year, is based on SOA, as is its NetWeaver middleware. Oracle offers its Fusion middleware based on SOA but doesn't plan to start delivering SOA-based applications until sometime next year.

But just how badly does the market want SOA? Kagermann insisted demand is hot; nearly 2,500 customers have gone live with My SAP ERP 2005 since its release, and he expects the number to go live this year will outpace the first-year adoption. By comparison, adoption of MySAP ERP 2004 adoption was just 500 customers in some years, he says.

Kagermann also thinks SAP has the right leadership in place to execute on its goals to drive SOA adoption and substantially grow its customer base among midsize companies. The spot vacated by Shai Agassi, who resigned from his job as president of products and technology in March, has been filled by several executives, each focused on specific areas. SAP doesn't necessarily need a president of products and technology, he said. "It's good to have several people with product experience," he said.

Leo Apotheker became Kagermann's deputy CIO and is first in line to succeed him. President of Americas Bill McDermott was promoted to the executive board and had his oversight expanded to include Asia Pacific, and former Asia Pacific president Hans-Peter Klaey was moved over to head up a new small and medium enterprise division that has the job of driving the aggressive growth Kagermann expects in that market.

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