Oracle Corp. on Thursday accused SAP AG of hacking into its computers to heist secret product information in a lawsuit that escalates the animosity that had already been building between two of the world’s largest business software makers.
“This isn’t really about protecting intellectual property,” said Forrester Research analyst Ray Wang. “This is all about the art of war.”
The complaint, filed in a San Francisco federal court, alleges that Germany-based SAP resorted to high-tech skullduggery in a desperate attempt to maintain its leadership in business applications software — programs that help companies manage a wide range of administrative tasks.
Long the leader in database software, Redwood Shores-based Oracle has been muscling up in the business applications market during a three-year shopping spree that has cost more than $20 billion so far.
Larry Ellison, Oracle’s brazen chief executive, believes the expansion will provide his company with the firepower to surpass SAP in the $20 billion business applications market.
As part of its counterattack, SAP has been building up a massive library of Oracle’s computer coding so it can woo away some of its rival’s customers, according to the 44-page lawsuit.
“This theft appears to be an essential — and illegal — part of SAP’s competitive strategy against Oracle,” the complaint said.
SAP was still reviewing the lawsuit Thursday and had no immediate comment, said spokesman Steve Bauer.
Oracle is seeking an injunction against SAP, as well as unspecified general and punitive damages.
The suit highlights the value of the product support deals that software makers strike after they sell a package of applications.
SAP has been aggressively signing up Oracle’s customers to product support deals during the past year, threatening to siphon a rich vein of revenue from its rival. Product support and software updates accounted for half of Oracle’s $12.2 billion in revenue through the first nine months of its current fiscal year.
Oracle also has been actively trying to sell product support to the customers of other software makers. These efforts have been aimed at SAP and Linux software leader Red Hat Inc.
As part of its assault, SAP bought a small product support company called TomorrowNow in early 2005 around the same time Oracle completed its first major takeover — an $11.1 billion acquisition of PeopleSoft Inc.
TomorrowNow, which now operates as SAP TN, was formed by several former PeopleSoft engineers promising to provide less expensive software support.
Honeywell International Inc., Merck & Co Inc., OCE Technologies Bv, SPX Corp. and Metro Machine Corp. are among the Oracle customers who have recently defected to SAP for product support, according to the suit.
But the suit alleges that SAP didn’t have enough information or adequate resources to support Oracle’s software, triggering the clandestine raids on Oracle’s computers beginning last September and continuing through at least January of this year.
SAP TN infiltrated Oracle’s systems by using the log-in information of defecting customers and then concealed its true identity by using phony phone numbers and fake e-mail addresses such as testtestyomamma.com, the suit alleged.
Oracle said it has uncovered more than 10,000 illegal downloads of material from SAP computers, with much of the activity being traced to an Internet protocol, or IP, address in SAP TN’s Bryan, Texas headquarters.
