SAP CEO is 'disappointed' Oracle did not go to him first before suing co UPDATE
WALLDORF, Germany (Thomson Financial) - SAP (nyse: SAP - news - people ) AG chief executive Henning Kagermann said he was personally 'surprised and disappointed' that Oracle Corp (nasdaq: ORCL - news - people ) …
Context & Ripple Effects
The admission came first, the apology tour second: on the same day SAP conceded its corporate espionage against Oracle and confirmed its TomorrowNow unit made inappropriate downloads of Oracle documents, CEO Henning Kagermann told press he was personally surprised and disappointed that Oracle filed suit without approaching him directly. The story travelled fast — CNET picked up the fallout angle on where TomorrowNow goes from here, while eWEEK framed it as SAP formally admitting to Oracle's lawsuit claims.
The stakes are specific: TomorrowNow runs a third-party maintenance and support business serving Oracle customers, and coverage already flags its future as uncertain amid the controversy — making this less a legal footnote than a threat to SAP's wedge into Oracle's installed base.
First-order effects
- SAP is now publicly on record conceding TomorrowNow's improper downloads of Oracle material while insisting SAP itself never accessed the files — a distinction that will be tested in court but does not shield the subsidiary from immediate scrutiny.
- TomorrowNow's third-party support business faces direct disruption, since enterprise buyers who chose it to cut maintenance costs now have reason to question whether the service can survive litigation with Oracle.
Second-order effects
- Oracle gains a public-relations weapon beyond the courtroom: the suit pressures SAP to either disavow or restructure TomorrowNow, undermining the competitive channel that had been peeling away Oracle support revenue.
- Rival enterprise-software vendors offering third-party maintenance face renewed scrutiny of their own download practices, raising compliance costs across that segment of the market.
Third-order effects
- If litigation forces SAP to shrink or exit third-party support, the episode could harden vendor lock-in around first-party maintenance contracts — an outcome Oracle has every incentive to push for.
- The case sets a precedent for how software rivals handle IP disputes between subsidiaries and parents: whether liability attaches to the acquiring parent (SAP) or stays quarantined in the acquired unit (TomorrowNow) is exactly what the courts will now decide.
The trend: Enterprise-software competition is shifting from feature rivalry toward legal combat over support and maintenance revenue streams, with acquired subsidiaries becoming liability vectors for their acquirers.