Oracle Subpoenas Firm That Hired Ex-TomorrowNow Workers

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Oracle has subpoenaed a Colorado IT services firm that hired former employees of TomorrowNow, the now-defunct SAP subsidiary that provided third-party support services for Oracle's Siebel, PeopleSoft and JD Edwards product lines.

Oracle sued SAP last year, claiming TomorrowNow workers illegally downloaded material from Oracle's support systems and used it to woo Oracle customers. SAP has said TomorrowNow workers made "inappropriate downloads" from Oracle's Web site but has denied Oracle's allegations of a wider pattern of wrongdoing. SAP subsequently shut down TomorrowNow after failing to find a buyer for the subsidiary.

Now Oracle wants Spinnaker Management Group of Denver to turn over "documents sufficient to show any past, current or planned support by you of any Oracle customer," according to the subpoena dated Oct. 17.

In addition, Oracle is demanding Spinnaker hand over "all documents related to your evaluation, consideration or assessment of TomorrowNow, including but not limited to your evaluation of TomorrowNow's method of providing third-party services, business model, or the legality of TomorrowNow's method of providing third-party services."

Spinnaker created a JD Edwards support practice in August, saying it had hired the JD Edwards global support team from TomorrowNow.

Spinnaker has filed a motion to quash Oracle's subpoena, arguing in part that it is overly broad, seeks confidential customer information and "imposes undue burden" on Spinnaker.

An attorney for Spinnaker said the company would not comment.

Meanwhile, Oracle has also served a subpoena to CedarCrestone, an Alpharetta, Georgia, integrator and managed services provider that specializes in PeopleSoft, according to a joint discovery document filed Nov. 18 in the California federal court that is hearing the SAP-Oracle lawsuit.

"Apparently, certain former TomorrowNow customers have elected to get support from CedarCrestone rather than return to Oracle," SAP said. "Oracle's subpoena includes, among other things, a request for production of documents reflecting CedarCrestone's business model." The company could not immediately be reached Thursday.

An Oracle spokeswoman declined to comment.

At the root of the Oracle-SAP dispute is the fact that software maintenance revenue, charged as a percentage of a customer's license cost, is a high-margin business that is becoming increasingly strategic to vendors' finances, and third-party support providers stand to cut into that pie.

Oracle generated US$1.2 billion in services revenue out of a total $5.3 billion during the first quarter of its fiscal 2009, a 9 percent jump.

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