October 3, 2010 7:41 pm

Oracle fury at HP choice of chief

Hewlett-Packard’s choice of Léo Apotheker as its new head has enraged Larry Ellison, Oracle chief executive, who said over the weekend that Mr Apotheker had been in charge of SAP at a time when it was stealing Oracle’s software.

Mr Ellison was referring to events after SAP’s 2005 takeover of software maintenance company TomorrowNow, which admitted making unauthorised copies of Oracle products from the database maker’s customer accounts.

According to a federal lawsuit that Oracle filed against SAP in Oakland in 2007 and which is scheduled for trial in November, the SAP board knew TomorrowNow routinely pilfered Oracle wares and continued the practice until October 2008, six months after Mr Apotheker rose to become co-chief executive at SAP.

In pretrial filings, SAP conceded both copyright and computer violations but argued that the damage was in the tens of millions of dollars, not the $1bn or more Oracle is seeking.

“SAP has already publicly confessed and accepted financial responsibility for systematically stealing Oracle’s intellectual property over a long period of time. Much of this industrial espionage and intellectual property theft occurred while Léo was CEO of SAP,” Mr Ellison wrote in an e-mail to the Financial Times.

“The HP board must have been aware of these facts, yet they appointed Léo CEO of HP anyway. What happened to ‘The HP Way’ [the corporate creed published by HP founder Dave Packard and Bill Hewlett]?”

HP declined to comment.

Mr Apotheker does not play a significant role in the court papers thus far, but he has given an interview under oath to Oracle lawyers and is expected to be called as a witness.

SAP was warned that there was a threat of litigation from Oracle over TomorrowNow even before it approved the acquisition in early 2005, according to court documents.

SAP rushed into the purchase of TomorrowNow as competition with Oracle was intensifying, prompted by the latter’s purchase of PeopleSoft, which made Oracle the second-biggest maker of business applications and SAP’s biggest rival in that market.

SAP acquired TomorrowNow, which provided maintenance services to PeopleSoft customers, to deprive Oracle of service revenue and eventually to try to convince the clients to switch to SAP products.

HP and Oracle are now facing off more directly, underpinning Mr Ellison’s animosity.

Oracle bought Sun Microsystems, a fading hardware competitor to HP, this year, and inflamed the company by hiring its ousted chief executive, Mark Hurd, as co-president.

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