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Oracle-SAP Suit Raises Questions about Software Support Specialist

August 7, 2008
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Related Topics: Human Resources Management Systems (HRMS/HRIS), Miscellaneous Legal Issues, Latest News
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In the latest legal skirmish between business software titans Oracle and SAP, Oracle alleges serious misdeeds at its arch rival and maligns the founder of software support firm Rimini Street.

But the charge that Rimini Street’s Seth Ravin might have built his former business TomorrowNow on the basis of stolen software doesn’t seem to be hurting his current firm.

If anything, Rimini Street appears to be benefiting from the fallout of Oracle’s suit against SAP. In the wake of the suit, which focuses on charges of intellectual property theft by TomorrowNow after it was acquired by SAP in 2005, SAP recently decided to close TomorrowNow.

That move opens the door for more business at Rimini Street, which, like TomorrowNow, handles business software maintenance tasks such as bug fixes for customers.

David Rowe, vice president of Rimini Street, says the phone is ringing off the hook at his firm, partly because of interest from TomorrowNow clients.

“We have already converted over two dozen of the [TomorrowNow] clients to Rimini Street,” he said.

Rowe says Rimini Street doesn’t comment on the specifics of the litigation between Oracle and SAP. But he said in a statement, “People should be careful not to confuse unsubstantiated allegations with actual facts.”

In an amended complaint filed late last month, Oracle claimed SAP executives were aware of and embraced an “illegal business model” at TomorrowNow.

“Following the SAP (TomorrowNow) acquisition, rather than change the illegal SAP (TomorrowNow) business model, SAP instead conspired to leverage the stolen Oracle intellectual property to entice customers to migrate to SAP software applications,” the complaint states.

SAP spokeswoman Lindsey Held says SAP is working to respond to Oracle’s complaint before a September 11 deadline.

“These are allegations, but not proven allegations,” she said.

In March 2007, Oracle sued SAP, alleging “corporate theft on a grand scale.” The suit initially centered on suspected stolen support materials.

SAP responded that TomorrowNow was authorized to download materials from Oracle’s Web site on behalf of TomorrowNow customers, but acknowledged “some inappropriate downloads.”

Oracle’s latest salvo in the court battle is not directed at Rimini Street. But it includes harsh criticism of Ravin, who co-founded TomorrowNow and sold his stake in that firm to SAP in early 2005.

Beginning as early as 2002, the complaint says, TomorrowNow co-founders Ravin and Andrew Nelson decided their firm “would create and keep on its computer systems illegal copies of Oracle’s underlying software applications.”

Ravin, who launched Rimini Street in 2005, is a key figure in the emerging field of third-party software support.

Traditionally, business software vendors have charged customers an annual support and maintenance fee as part of a software license sale. That support typically includes corrections to coding errors and updates for legislative changes. Third-party software support providers offer similar services for a lower price.

Rimini Street has helped more than 100 customers of business software save at least 50 percent on their annual support fees, according to the vendor’s Web site.

But the lawsuit and allegation against Ravin raise questions about whether third-party support can be done in a legal way.

Oracle, for one, sees third-party software support as potentially legitimate, according to a court document in the lawsuit.

The document, a filing made in June by SAP, quotes an Oracle attorney as stating: “There are circumstances in which the third-party support providers are legitimately providing support, and Oracle welcomes that competition.”

—Ed Frauenheim

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