The air is tense in Silicon Valley due to a rift between Oracle Corporation and Hewlett-Packard Company as the former hardware-software dynamic duo finds themselves in a growing conflict centered around HP's new CEO.
HP drew much criticism when it appointed Léo Apotheker, a German businessman with little consumer sales experience, to be its CEO. Now that criticism is likely to intensify as Oracle is reporting that Mr. Apotheker will comply with requests for him to testify in a trial involving his former employer SAP AG's theft of Oracle's intellectual property.
SAP AG has already admitted that its subsidiary TomorrowNow stole Oracle code while Mr. Apotheker was the company's CEO. But SAP contends that its top level executives knew nothing of the misconduct. Oracle disagrees, claiming Mr. Apotheker and others were directly involved in the scheme.
The evidence against TomorrowNow left SAP AG with no room to contend its subsidiary's innocence. In a instant messaging exchange Kimberly Martinez, a TomorrowNow employee states, "Wonder who on the inside told?"
Kristin Paige, another employee, responds, "I think they caught us."
TomorrowNow was acquired by SAP AG in 2005 and quickly went about constructing a program dubbed "Titan" that was specifically design to extract and steal Oracle's source code from its online service pages. Oracle claims that the damages amount to billions of dollars, while SAP AG only wants to pay Oracle about $40M USD. The two parties refuse to settle and the fate of the case now rests in the hands of an American jury.
Larry Ellison, known for racing cars and yachts, will be testifying in the trial, including sharing what he feels is damning evidence pointing to Mr. Apotheker had knowledge of the IP theft. If Mr. Apotheker doesn't show, he says, Oracle will merely play video tapes of past depositions that the former CEO gave pertaining to the case. Mr. Apotheker may be compelled to show up in an effort to give a more carefully crafted deposition.
It's unclear what would happen to Mr. Apotheker if it is shown that he participated in the theft. Clearly such a revelation would destroy his professional credibility, but it's unclear whether HP would feel compelled to fire him if this happened, given that it's stood behind its embattled new CEO.
HP's last CEO did a terrific job in terms of business, but was fired for personal misconduct. He now is employed by Oracle, part of what has drawn a stake into the companies' relationship. However, the real trouble for the pair began when Oracle acquired Sun Microsystems and began to ditch HP hardware from its business offerings.
In related news Oracle is continuing its campaign to stay competitive in the software industry via acquisitions. Oracle has made $1B USD cash bid for Art Technology Group Inc., a 46 percent premium over the electronic commerce business's stock price. The company has many high profile customers, including Best Buy Co Inc, AT&T and Vodafone Group Plc, whom it provides in-store and on-line transactions software for. It competes with Amazon.com and GSI Commerce.
The acquisition helps Oracle compete against IBM and Microsoft, which lead it in total revenue. Both of those competitors have been on acquisition warpath of late and Oracle intends aims to match or beat them, blow for blow.