Commentary
10/12/2010
11:45 AM
Bob Evans
Bob Evans
Commentary

Global CIO: Larry Ellison Will Be Crucial Witness At Oracle-SAP Trial

As the court decides how much SAP must pay Oracle, Ellison will describe the harm done to Oracle by the actions of SAP's former subsidiary.



The damages portion of the Oracle-SAP trial is slated to begin in the Bay Area Nov. 1, and the list of witnesses Oracle intends to call includes many of SAP's top executives, including SAP founder and chairman Hasso Plattner, plus a number of Oracle's own top brass, led by CEO Larry Ellison.

The case stems from unauthorized of downloads of Oracle software by former SAP subsidiary TomorrowNow, for which SAP has admitted legal responsibility. SAP has also agreed to pay "reasonable" damages to Oracle, and the trial's damages phase beginning next month will seek to determine just whose definition of reasonable will prevail.

SAP clearly says in a statement about the litigation that while it is taking responsibility and is willing to pay damages, it disagrees with Oracle on what those damages should be: "SAP is committed to compensating Oracle for the harm the limited operations of TomorrowNow actually caused. Oracle's unreasonable damages claims are an unproductive distraction as we work to find a fair resolution in this case."

Nevertheless, Oracle might think that for the harm it suffered, compensatory damages of several hundred million dollars would constitute the very essence of reason, whereas SAP would likely define reasonable more in the range of $15 million (or less).

Along the way, Oracle intends to make its case for a huge judgment via the testimonies of a slew of witnesses, including about 40 people who had been employees of TomorrowNow at the time the Oracle software was downloaded, plus SAP executives past and present (highlighted by former SAP CEO Leo Apotheker, who is now CEO of Hewlett-Packard), plus about 30 Oracle employees including Ellison, president Safra Catz, former president Charles Phillips, and executive Juergen Rottler, who at the time was in charge of Oracle customer services.

Oracle submitted its list of witnesses it intends to call on August 5 (case 4:07-cv-01658-PJH, document 742, United States District Court, Northern California District, Oakland Division), and associated with each witness is a "brief description of substance of testimony" that reveals what Oracle's attorneys will be discussing with each witness.

Based on those descriptions, here's a glimpse at what you can expect to hear from Oracle executives and SAP executives under questioning from Oracle's attorneys, who will be attempting to show that the knowledge of TomorrowNow's actions was widespread within SAP and that those actions therefore call for SAP to pay damages to Oracle that more closely reflect Oracle's definition of reasonable than SAP's.

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And while every witness holds the possibility to offer insightful information affecting the determination of the damages, the testimony that will likely provide enormous impact will come from Oracle CEO Ellison, who will address among other things the "harm to Oracle" of SAP's acquisition of TomorrowNow.

Here's the full description of what Ellison will be talking about from the witness stand:

Oracle CEO Larry Ellison: "History and development of Oracle; Oracle business structure and management; Oracle product development information; Oracle software support; Oracle maintenance revenue; PeopleSoft acquisition; Siebel acquisition; Impact of SAP's acquisition of TN [TomorrowNow] on Oracle; Harm to Oracle; ERP software competition/market; Hypothetical license expectations; Oracle financial results"

Oracle co-president Safra Catz: ERP software market and competition; PeopleSoft acquisition; Siebel acquisition; Oracle customer relationships; Oracle financial information; Hypothetical license expectations; Oracle support organization metrics and reports"

Oracle executive Juergen Rottler: "Oracle support services and materials; Software support industry; Third-party support providers; Oracle maintenance revenue; PeopleSoft acquisition; Siebel acquisition; Impact of SAP’s acquisition of TN on Oracle; Oracle customer relationships; Oracle sales and marketing; Oracle support organization metrics and reports"

Oracle employee Buffy Ransom: "Customer Connection website; Downloading investigation; Damage/harm to Oracle's data/systems; JD Edwards products, development and support; JD Edwards copyrights; Oracle licensing practices and contracts; Copyright ownership/authorship"

Oracle employee Jason Rice: "Downloading investigation; Damage/harm to Oracle data/systems; Oracle support services; Customer Connection websites"

former SAP executive Leo Apotheker: "SAP's acquisition of TN; TN business case and projections; SAP's knowledge, oversight and direction of SAP TN's activities; Benefits of SAP TN acquisition; Safe Passage and SAP TN marketing; SAP TN geographical and product expansions; SAP and SAP TN post-litigation activities"

SAP chairman and founder Hasso Plattner: "SAP corporate history and structure; SAP's acquisition of TN"

former SAP executive Henning Kagermann: "SAP's acquisition of TN; TN business case and projections; SAP's knowledge, oversight and direction of SAP TN's activities; Benefits of TN acquisition; Safe Passage and SAP TN marketing; SAP TN geographical and product expansions; SAP/TN post-litigation activities; ERP software market; SAP TN downloading from Oracle websites"

former TomorrowNow executive Andrew Nelson: "SAP TN history and corporate structure; SAP TN business model and support services; Third party support market; SAP TN copying, modification, distribution and use of Oracle software and support materials; Oracle Database Software and SAP TN licenses; SAP TN/Customer communications; SAP TN sales practices and results; SAP’s acquisition of TN; SAP’s knowledge, oversight and direction of SAP TN’s activities; Safe Passage and SAP TN marketing; SAP TN geographical and product expansions; SAP and SAP TN post-litigation activities"

While the testimony from each of these individuals will be vital, I'm betting that the most compelling and eye-opening will come from Ellison and from Apotheker, the current CEO of HP who was a high-level executive at SAP at the time of the downloading by TomorrowNow.

Although Apotheker is no longer with SAP, since his hiring by HP he has been the target of some stinging remarks from Ellison, who in a recent email exchange with the Financial Times said that Apotheker was a top executive of SAP when it committed "industrial espionage and intellectual property theft" against Oracle.

That's why, as I outlined in an earlier column today called Global CIO: In Oracle Trial, HP Might Pay Higher Price Than SAP, SAP is not the only Oracle rival that's less than thrilled about this high-profile courtroom showdown.

That's because every moment that Apotheker has to spend preparing for his testimony or in being otherwise engaged with the litigation is one less minute he's not spending on helping HP craft its future.

And depending on Apotheker's testimony, the best HP can hope for is that shortly after the trial is over, no one really remembers anything Apotheker said.

That's not a likely outcome, but nevertheless it's the one HP is praying for.

RECOMMENDED READING:

Global CIO: In Oracle Trial, HP Might Pay Higher Price Than SAP

Global CIO: Are HP And SAP Perfect Match Or Train Wreck?

Global CIO: An Open Letter To HP CEO Leo Apotheker

Global CIO: SAP's Sweeping Turnaround: Exclusive Co-CEO Interview

Global CIO: HP's $130-Billion Gamble

Global CIO: Larry Ellison Puts HP In Crosshairs Via Slap At New CEO

Global CIO: HP CEO Apotheker Has Deep Expertise But Checkered History

Global CIO: An Open Letter To SAP Chairman Hasso Plattner

Global CIO: SAP's Last Chance: It's The Customers, Stupid!

Global CIO: IBM Turns Guns On Cisco With Acquisition Of Blade Network

Global CIO: Oracle's Success Breeds Fear And Loathing At The New York Times

Global CIO: SAP Promises Business Value Over Products: Can It Deliver?

Global CIO: An Open Letter To HP CEO Leo Apotheker

Global CIO: SAP Stunner: ERP Deal Boosts Customer Profit $100M Per Year

Global CIO: Tibco Surges And CEO Flips Off IBM, Oracle, And SAP

Global CIO: The Awesome Transformative Power Of The Apple iPad

Global CIO: As HP And Oracle Brawl, IBM And SAP Snatch Customers

Global CIO: SAP Confronts The Real-Time Culture Wars

Global CIO: The CEO Of The Year Is SAP's Bill McDermott

Global CIO: Who Is The Tech Sector's #1 Acquisition Target?

Global CIO: Oracle Hammered By SAP For Stifling Customer Choice

Global CIO: How SAP Is Leading The Mobile-Enterprise Revolution

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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