SAP Names New TomorrowNow Head In Wake Of Oracle Misstep

In its response this week to the lawsuit Oracle filed in March, SAP admitted that "certain downloads took place that, in violation of [TomorrowNow] policies, may have erroneously exceeded the customer's right of access." In consequence, SAP named a new executive, former CFO and SAP America COO Mark White, to oversee TomorrowNow. White will serve as TomorrowNow's executive chairman, with TomorrowNow CEO Andrew Nelson reporting to him.

"[TomorrowNow] had clear procedures in place but apparently they weren't followed properly," SAP CEO Henning Kagermann said in a conference call with reporters. "I will trust in Mark that once he starts overseeing the operations that there will not be any inappropriate downloads any longer."

TomorrowNow, acquired by SAP in 2005, provides outside maintenance and support for Oracle's applications at a discount to Oracle's rates. Oracle's complaint alleged that in TomorrowNow's mass downloads of support materials on its customers' behalf -- a legal and common tactic used by third-party maintenance firms -- TomorrowNow swept in materials to which its customers did not have access rights, and, in some cases, downloaded support materials after the expiration dates of its clients' Oracle support contracts. SAP acknowledged that some violations along those lines had taken place, but hedged on the question of whether the breach was knowing or inadvertent.

"It's a little bit early" to make that determination, Kagermann said, pointing to SAP's ongoing investigation into Oracle's claims. He emphasized his confidence that violations of any sort will be a thing of the past under White's leadership, saying TomorrowNow will do whatever it takes to be "100 percent pure."

"Even if Mark [comes] up with procedures that would impact slightly the competitiveness, he will implement them," Kagermann said.

The wrangle between SAP and Oracle raised eyebrows among other third-party maintenance providers, who wondered why TomorrowNow employees were technically able to download materials to which their customers did not have rights.

"If it's ambiguous about what customers are given the opportunity to download and what they have rights to download, that just gives everyone the willies," said Seth Ravin, CEO of TomorrowNow rival Rimini Street, not long after the lawsuit was filed. "I don't think most customers want decisions about what's legally appropriate to access being left to their consultants, or even to their line-of-business employees."

Neither Oracle nor SAP has commented on whether TomorrowNow's violations came as a result of intentional efforts to circumvent access rights or though accidental exploitation of shoddy controls on Oracle's customer support Web site.

SAP executives took pains to emphasize that the breaches and the material they netted were wholly confined to TomorrowNow, which SAP operates as a subsidiary. All materials TomorrowNow downloaded on its clients' behalf "remained in separate systems and did not pass across the firewall to SAP," Kagermann said.

The next step in the legal dispute between Oracle and SAP is a case management conference in San Francisco scheduled for Sept. 4. Meanwhile, SAP is providing materials to the U.S. Department of Justice, which requested documents relating to the case.

As SAP and Oracle battle, other outside maintenance firms hope to take advantage of the high-profile fracas to tout their own offerings. NetCustomer, a San Jose, Calif., provider of PeopleSoft and J.D. Edwards support services, launched an opportunistically timed offer of a free consultation this month on a support issue for existing PeopleSoft and J.D. Edwards customers.

"The ongoing battle between software giants and inappropriate practices by certain vendors have raised questions on the future of third-party support," NetCustomer CEO Punita Pandey said in a written statement. "We felt what better way to celebrate this 4th of July than to promote a truly independent support choice with immediate ROI to customers."