SAP admission of liability highlights Oracle third-party support issues

Oracle/Rimini Street lawsuit will be a real test of legality of third-party services

SAP AG's admission of some liability in a lawsuit brought against it by Oracle Corp. over third-party support services will likely speed resolution of the dispute between the two companies.

However, it really is a second similar lawsuit that Oracle filed earlier this year against another third-party service provider, which could prove more meaningful for Oracle customers, analysts said.

SAP agreed on Wednesday to assume liability for copyright theft claims made against it by Oracle .

The charges relate to a now defunct SAP subsidiary called TomorrowNow, which provided third-party support services to Oracle customers at about 50% of the cost that the vendor charged for it.

In its lawsuit, Oracle accused TomorrowNow of illegally downloading Oracle updates and maintenance tools in providing its third-party support.

In January, Oracle filed a somewhat similar lawsuit against Rimini Street , another third-party service provider that has managed to snag a growing number of Oracle and SAP customers largely by virtue of the fact that its prices are about half that of the enterprise vendors.

Oracle has accused Rimini Street of "massive theft" of Oracle software and support materials.

The lawsuits are viewed by many as somewhat cynical attempts by Oracle to protect its lucrative software maintenance revenues against outsiders.

Oracle, like other major vendors of enterprise software, including SAP, derives a major portion of its revenues from application support and maintenance services. Customers who don't sign up for the services are precluded from receiving any further software updates or patches from the company.

SAP's admission of liability will likely resolve its dispute with Oracle quicker, said Frank Scavo, managing partner of the IT consulting firm Strativa.

But the real test of Oracle's ability to prevent other companies from providing maintenance and support services for its software is the Rimini lawsuit, Scavo said.

"SAP had indicated from the very beginning that there was some validity to Oracle's claim," Scavo said. "So this is no great surprise."

The Rimini Street case is more interesting from a customer standpoint because Oracle could have a harder time supporting its claims of copyright theft, he said. "My understanding, having spoken to Rimini Street, is that they have taken extraordinary measures to protect both Oracle and SAP intellectual property."

"They have indicated, by countersuing Oracle , that they plan to fight Oracle vigorously and even are welcoming the opportunity to do so," he said.

The issue is an important one for customers who are tied to expensive maintenance contracts with their vendors simply because they have no place else to go, added Paul Hamerman, an analyst with Forrester Research in Cambridge, Mass.

Over the past few years, only a handful of companies have even attempted to deliver third-party services and often the ones that do are afraid to openly disclose that fact for fear of legal issues, he said.

Many of the systems-integration companies that are in a position to deliver such services, often also don't want to do it for fear of losing out on their business partnership status with the software vendors, Hamerman said.

"The third-party software maintenance market is a viable market," and one that is going to remain largely unaffected by the outcome of the SAP/Oracle dispute, he said.

"Customers are feeling a lot of pain over the ongoing costs of ownership of enterprise applications," Hamerman said. There is a significant uptick in interest in third-party services especially because many enterprise applications such as human resources and payroll are fairly stable and are rarely in need of frequent vendor updates or support, he said.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentIT industrydatabasesregulationOraclesoftwareapplicationsSAPTomorrowNowGov't Legislation/Regulation

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jaikumar Vijayan

Computerworld (US)
Show Comments

Cool Tech

Toys for Boys

Skywatcher Dobsonian 8″ Collapsible Telescope

Learn more >

Family Friendly

Whodunnit™ Duo-Scope MFL-007 Microscope Kit

Learn more >

Stocking Stuffer

Logitech Ultimate Ears Wonderboom 2 Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?