No Tomorrow for SAP’s Oracle-Baiting Subsidiary

SAP will close down a subsidiary that provided technical support to businesses that used software sold by rival Oracle. But dont write off the third-party-support business model just yet.

TomorrowNow customers will have to get their tech support somewhere else

When Oracle bought management-software maker PeopleSoft in 2005, rival SAP had a bright idea: It bought TomorrowNow, a company run by former PeopleSoft execs. At the time, some PeopleSoft customers were up in arms about the prospect that Oracle might force them to move over to Oracle software. TomorrowNow promised to help businesses run PeopleSoft and other older software in perpetuity for less than Oracle or SAP charged for support services. Cynics also saw it as a vehicle through which SAP could steal customers from its rival.

At its peak, TomorrowNow had several hundred customers, most of whom would have otherwise bought support services from Oracle. Then two things happened: Instead of forcing people to install its software, Oracle decided to keep selling PeopleSoft, weakening TomorrowNows raison detre. And in March, 2007, Oracle sued TomorrowNow, alleging that it repeatedly stole Oracles intellectual property. A trial is set for February 2010.

SAP, which had been shopping TomorrowNow around, on Monday said it will shut down the subsidiary in October. SAP will use the time thats left to help TomorrowNows 225 customers find support from Oracle or a different third party. An SAP spokesman tells the Business Technology Blog that the software maker had hoped to sell TomorrowNow, but that it would have been a complex transaction. He said closing TomorrowNow wont have a material impact on SAP. An Oracle spokeswoman declined to comment.

This isnt the end of third-party support. While TomorrowNow was the best known practitioner, there are other companies that offer the service, including Rimini Street, which was started by one of TomorrowNows co-founders. Support from these companies can cost half as much as support from the software maker, Ray Wang, an analyst at Forrester Research, tells us. And so these companies will be around as long as there are businesses looking to save money.

-Ben Worthen