Top Managers Quit At SAP's TomorrowNow, Sale Possible

In the midst of an acrimonious lawsuit with Oracle over the activities of its TomorrowNow subsidiary, SAP announced Monday that TomorrowNow's top management, including its CEO, is leaving the company. SAP also said that it is considering selling off the TomorrowNow business.

TomorrowNow CEO Andrew Nelson and several other members of his senior management team have chosen to resign, SAP said in a terse release that did not offer details on the reasons for the resignations. Beyond Nelson, SAP did not disclose which executives are leaving; a company representative said SAP is not releasing other names.

SAP said it is considering several options for TomorrowNow's future, including a possible sale of the contentious unit.

"Our primary focus is TomorrowNow's existing customers, who will be supported through this management transition," said Mark White, an SAP executive who assumed oversight of TomorrowNow earlier this year. "Over the next days, we will be communicating with TomorrowNow customers about these changes and our plans to support them going forward."

TomorrowNow offers outside maintenance and support services for Oracle's PeopleSoft, Siebel and J.D. Edwards product lines. SAP acquired the business in 2005 as a direct strike at Oracle, aiming to undercut Oracle's lucrative maintenance and support revenue stream.

The acquisition turned problematic in March, when Oracle hit SAP with a sweeping lawsuit charging that TomorrowNow employees conducted "corporate theft on a grand scale" by improperly accessing Oracle materials. SAP subsequently admitted that "certain downloads took place that, in violation of [TomorrowNow] policies, may have erroneously exceeded the customer's right of access."

The two companies are preparing to take their dispute to trial, although SAP is pushing for settlement negotiations.

The legal wrangling has broader implications for the third-party maintenance market, which includes TomorrowNow rivals like Rimini Street and NetCustomer as well as Oracle itself, which offers outside maintenance services for Red Hat Linux. While Oracle's legal fusillade is so far confined to archrival SAP and focuses on specific improprieties, other solutions providers are staying tuned for details on how the violations came about: did SAP's TomorrowNow employees go fishing for Oracle data, or did they accidentally access materials left exposed?

"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," Rimini Street CEO Seth Ravin said in an interview earlier this year. "I don't think most customers want decisions about what's legally appropriate to access being left to their consultants."