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Oracle finally gets SAP to trial, and maybe HP CEO
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Oracle finally gets SAP to trial, and maybe HP CEO
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By Jim Finkle
SAN FRANCISCO (Reuters) - Three of the world's most powerful technology companies are enmeshed in a jury trial kicking off on Monday that could make for some of the best theater Silicon Valley has seen in years.
Larry Ellison, the...
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By Jim Finkle
SAN FRANCISCO |
Mon Nov 1, 2010 9:15am EDT
SAN FRANCISCO (Reuters) - Three of the world's most powerful technology companies are enmeshed in a jury trial kicking off on Monday that could make for some of the best theater Silicon Valley has seen in years.
Larry Ellison, the co-founder and CEO of software giant Oracle Corp, has waited 2-1/2 years to bring arch rival SAP AG to court on charges that SAP stole Oracle's software and resold the technology at bargain-basement prices.
Oracle has also attacked Hewlett-Packard Co for naming SAP's former CEO Leo Apotheker as its CEO in late September. Ellison charges that Apotheker played a key role in the case. SAP, Europe's biggest software maker, and HP have moved quickly to defend Apotheker.
HP, the world's biggest technology company by revenue, and Oracle, the biggest independent maker of business software, were close partners until three months ago.
They became fast enemies following a series of executive shuffles that began in early August: HP fired its CEO, Mark Hurd, who is a close friend of Ellison. Hurd was accused of falsifying expense reports to hide a relationship with a female contractor.
Oracle then hired Hurd as its president. HP responded by hiring Apotheker as its chief executive, which prompted a verbal firestorm from Ellison.
While the high-tech industry is one where personal rivalries and friendships play a significant role in shaping corporate warfare, it is rare for alliances to shift so quickly and dramatically.
"It has gotten very, very personal. And it's not going to stop," said Howard Anderson, a lecturer at MIT's Sloan School of Management.
THE CASE
SAP has chosen not to contest liability in the case and has admitted to wrongdoing for improperly downloading files from an Oracle customer-service website.
That means the jury case will be limited to determining the scope of damages. SAP has said in a court filing that it believes the damages should total in the "tens of millions of dollars."
Oracle has said SAP should pay more than $2 billion in damages and has hired David Boies, one of the top trial attorneys in the United States, to make that case to a jury.
While the two sides will spend the next four to six weeks arguing over money, several analysts said that the size of the award may not have a huge impact on either company, regardless of the outcome since both SAP and Oracle each generate billions of dollars a year in revenue.
"Let's not confuse this with real money. It doesn't matter whether it's $250 million or a $1 billion," Anderson said.
SAP has already taken a $160 million provision for the case and would likely take a write-down for whatever damages it ultimately ends up paying.
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