SAP yesterday announced that the CEO and several senior managers of its TomorrowNow subsidiary have resigned from the company. SAP also said it is weighing its options regarding the TomorrowNow business, including a possible sale of the company.
Following the departure of CEO Andrew Nelson and several top-level managers, TomorrowNow remains in the hands of Executive Chairman Mark White, who was installed earlier this year from SAP's corporate ranks.
SAP declined to comment on the announcement or to provide details on the number and identities of the departing senior managers.
The announcement is the latest development at TomorrowNow, following a lawsuit filed in March of this year by Oracle, which alleges corporate theft by SAP and TomorrowNow, a provider of support services to users of Oracle's PeopleSoft, JD Edwards, and Siebel software. In the lawsuit, Oracle claims that SAP and TomorrowNow unlawfully downloaded proprietary information from Oracle's customer Web site, including various software products and support materials.
Asked today whether the resignations were related to the lawsuit, an SAP spokesman declined to answer, citing company policy against commenting on ongoing litigation.
After admitting in July to certain "inappropriate downloads" by TomorrowNow employees, SAP appointed White, SAP Americas chief operating officer and former CFO, to oversee the subsidiary as executive chairman. At the time, SAP denied having knowledge of the downloads by its subsidiary, which Oracle claims began late in 2006, or that the information was used to gain a competitive advantage over Oracle, with which it has competed for the lion's share of the large enterprise applications market over the past few years.
A trial date for the lawsuit has been set for Feb. 9, 2009.
SAP acquired TomorrowNow in 2005 to serve as part of its Safe Passage program, which provides support and maintenance services to PeopleSoft, JD Edwards, and Siebel users at significantly lower rates than those offered by Oracle. The Safe Passage program also offers a migration path for users of Oracle's acquired product lines — including PeopleSoft, JD Edwards, and Siebel — to switch to SAP applications.
White said in yesterday's statement that TomorrowNow will continue to focus on providing support for its customers during the management transition, and that he is working to "assure retention of key managers and support personnel." In the same statement, the company said it is considering "several options for the future of the TomorrowNow business, including possible sale."
Seth Ravin, co-founder of TomorrowNow and current CEO of TomorrowNow competitor Rimini Street, today questioned whether SAP provided adequate reassurance to TomorrowNow customers.
"The TomorrowNow customers we've spoken to are puzzled by the messaging," Ravin told Managing Automation. The possible sale of TomorrowNow is not a reflection of the overall health of the enterprise applications maintenance industry, Ravin said. He added that possible buyers would include consultancies, such as Rimini Street, which have intimate knowledge of the space.
"TomorrowNow customers are saving a lot of money and getting good support," Ravin said. "This kind of message has just thrown them for a loop."