SAP says it will shut down the remaining TomorrowNow application support services by Oct. 31. Current TomorrowNow customers will transition to other third-party support services or to Oracle.
SAP is going to kill off its
ill-fated TomorrowNow acquisition by winding down its
remaining application support operations by the end of October.
SAP is locked in a bruising legal battle
with Oracle, which claims that TomorrowNow illegally downloaded copyrighted
Oracle product support documentation and code.
However, the decision to close down the remaining TomorrowNow doesn't mean
that there is any active effort between the two companies to settle the
lawsuit. The case is scheduled to go to trial in February 2010, and the
adversaries haven't made any move toward resolving the suit in court-ordered
settlement conferences. SAP has said it will
pursue a vigorous defense against this lawsuit.
The next settlement conference is scheduled for Oct. 6.
While SAP says that the shutdown won't
have any material effect on its financial results, this acquisition has
certainly produced nothing but losses for the company since it bought the
company in February 2005.
It looks like the
financial
pain is destined to get much worse. SAP
has publicly conceded that its TomorrowNow subsidiary had downloaded
documentation that it wasn't authorized to access. However, SAP
contends it never itself accessed this information or benefited from it.
But Oracle has since amended its lawsuit filed in the U.S.
District Court in San Francisco to
add patent infringement and breach of contract charges. It looks like Oracle
has a winning hand in this lawsuit, and it could cost SAP
many millions of dollars to settle it, whether or not the case actually goes to
trial.
SAP hasn't had good luck recently winning
lawsuits. At the end of June supply chain software maker
i2 Technologies
announced it would receive an $83 million cash payment from SAP
to settle a patent infringement lawsuit.
SAP announced its shutdown of TomorrowNow
a week after announcing that it was moving its own support and maintenance
services to a single-tier "Enterprise Support" system for all customers regardless
of their size and IT budget. The new program is going to result in higher
support costs for most customers as it is phased in over the next four years.
My boss, eWEEK Executive News Editor Michael Hickins, wrote in his E-piphanies
blog that the
TomorrowNow
debacle, like the decision to move to a higher-cost Enterprise Support
program, will only serve to push customers to third-party application
maintenance and support services.
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John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.
