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Teradata v. SAP – what it means to customers and prospects

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SUMMARY:

This lawsuit, like the Indirect Access flap, may trigger some interesting conversations between SAP and its customers/prospects. While it’s too early to call anything, what might this litigation trigger?

Let’s be very clear up front. We’re not taking any position as it relates to the litigation. This story is solely concerned with matters that will be of interest to SAP customers and prospective customers.

The background

Recently, Teradata filed a lawsuit against ERP vendor SAP.  The suit alleges, among other things that SAP:

  • “used its powerful position in Enterprise Resource Planning (“ERP”) Applications to gain entrance to and quickly grab market share in the Enterprise Data Analytics and Warehousing (“EDAW”) market”
  • “SAP promptly terminated the parties’ joint venture, and it is now attempting to coerce its customers into using HANA only, to the exclusion of Teradata, by forcing its customers to adopt HANA in exchange for upgrading their ERP Applications.”
  • “SAP could not have so quickly developed and marketed HANA in the first place without its theft of Teradata’s trade secrets.”
  • “SAP’s anticompetitive strategy has resulted in irreparable and ongoing harm to Teradata in the form of lost customer relationships and opportunities, lost profits, and continued erosion of market share in the very industry Teradata pioneered.”

Teradata wants an injunction, monetary damages and other relief.

As we said at the top of this story, we will not argue the merits of the case as SAP has yet to file a counter compliant. SAP did make this comment:

Teradata has been aware of the allegations made by a former SAP employee for some time now. SAP offered to discuss and address these allegations with Teradata in 2015. Unfortunately, Teradata did not accept this offer and instead chose to file a lawsuit over 2 years later.  While SAP remains willing to discuss Teradata’s stated concerns, it will vigorously defend itself.  The filing of this lawsuit does not impact SAP’s ability to continue to deliver value to all of its customers, including SAP HANA customers.

One former SAP executive, Vishal Sikka, has commented on this and his remarks can be found in this Business Today article.

Slamming the charges, Sikka in an emailed statement to PTI said: “Although this lawsuit is not directed at me, I categorically deny the baseless and outrageous allegations made by Teradata that attempt to diminish the hard work, passion, and the irrefutable and fully legitimate achievements by the Hana team, including myself.

What this article will address are the possible actions relating to pursuing a case of this magnitude and the implications of these actions might have on SAP customers and prospects.

The potential timeline

Litigation is an occupational hazard for corporations. The bigger your firm gets, the more likely it will attract big lawsuits. A company will even attract more suits if it behaves in a reckless manner.  When one big firm sues another big firm, the legal warfare can reach epic levels. Since each side has the funds to fight a protracted case and hire top-flight attorneys, the case can get drug out for years.

Since both Teradata and SAP are large firms, readers shouldn’t necessarily expect a rapid cessation of litigation. (Teradata has annual revenues of approx. $2.2 billion and SAP has annual revenue of approx. $27.3 billion.)

What could happen in a case of this size, should it go to trial, is. There’s a lot of ifs, buts and maybes but this provides a flavor of what you can expect:

  • The defendant will file a counter complaint/countersuit or request summary judgment to dismiss
  • There will be a response to the original complaint
  • Each side will file motions, including motions to dismiss
  • A lengthy discovery process could be triggered

Read More Here

Article Credit: Diginomica

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