German software giant SAP is to auction its subsidiary, TomorrowNow, only two years after acquiring the company.
SAP acquired TomorrowNow in mid-January 2005 as a means to woo away maintenance and support customers from archrival Oracle, shortly after Oracle acquired PeopleSoft. Sources have reported to ZDNet Australia sister site CNET News.com that next Tuesday is the deadline for potential buyers to declare their interest in TomorrowNow.
In its recent preliminary fourth quarter announcement, SAP noted is in its footnote about its US GAAP requirements that the company is "required to present its results of discontinued operations (TomorrowNow) separately from its results from continuing operations".
SAP is currently embroiled in a legal battle with Oracle; filing a suite in the US in March 2007 alleging the software giant hacked into Oracle's customer support centre and downloaded copies of its proprietary software code. In July 2007 SAP acknowledged in a court filing that TomorrowNow had engaged in "inappropriate downloads" of Oracle's proprietary fixes and support documents.
At the time Henning Kagermann, SAP's chief executive, said in a statement: "Even a single inappropriate download is unacceptable from my perspective. We regret very much that this occurred."
TomorrowNow has seen a drop-off in customers since the controversy erupted. Henning Kagermann, told CNET News.com in an interview in July last year that "attracting new customers is more difficult than it was before we were in this discussion [with Oracle]."
There has been speculation that SAP's choice to sell TomorrowNow may be part of potential settlement negotiations with Oracle. TomorrowNow provides third-party maintenance and support to PeopleSoft, JD Edwards, and Siebel customers -- all companies that Oracle has acquired over the years.
TomorrowNow was founded in 1998 by former PeopleSoft software expert Andrew Nelson. Since its conception it has signed up some big clients -- including Lockheed Martin, Safeway, Coors Brewing, Circuit City and Petco.
