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HR Tech Battle Goes to Court

March 22, 2007
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The battle between HR software’s biggest players moved into a courtroom Thursday, with Oracle suing rival SAP for allegedly committing “corporate theft on a grand scale.”

Redwood Shores, California-based Oracle said it filed a lawsuit in U.S. District Court in the Northern District of California alleging that Germany-based SAP “has stolen thousands of proprietary, copyrighted software products and other confidential materials that Oracle developed to service its own support customers.”

In a statement, SAP spokesman Steve Bauer said his company is still reviewing the matter and declined to comment on the suit.

The two companies are fierce rivals in the field of software applications to manage business tasks including human resources and finance. The competition has intensified in recent years, with Oracle snapping up a number of business application vendors including PeopleSoft.

A report last summer from AMR Research found Oracle was tops in 2005 in worldwide revenue in human capital management applications, with a 26 percent share of the market. SAP ranked second with a 23 percent share. AMR’s figures include revenue from professional services.

Oracle’s suit alleges that SAP gained repeated and unauthorized access to Oracle’s proprietary, password-protected customer support Web site. It alleges that SAP employees used the log-in credentials of Oracle customers with expired or soon-to-expire support rights to access and copy software and support materials.

“SAP has compiled an illegal library of Oracle’s copyrighted software code and other materials,” the suit claims. “This storehouse of stolen Oracle intellectual property enables SAP to offer cut-rate support services to customers who use Oracle software, and to attempt to lure them to SAP’s applications software platform and away from Oracle’s.”

SAP subsidiary TomorrowNow offers support services for PeopleSoft and other Oracle products.

In the lawsuit, Oracle says it “seeks to stop SAP’s illegal intrusions and theft, to prevent SAP from using the materials it has illegally acquired to compete with Oracle, and to recover damages and attorneys’ fees.”

—Ed Frauenheim

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