SAP axed TomorrowNow execs to improve image

Analysts said that SAP's move to part with key executives at its TomorrowNow subsidiary is likely an attempt to repair a public image that has been tarnished by allegations that TomorrowNow employees illegally downloaded confidential data from Oracle's Web site.

The alleged activities of workers at Texas-based TomorrowNow are at the epicenter of a lawsuit filed by Oracle in March over alleged illegal software downloads of customer support materials by workers at the subsidiary.

SAP officials declined to comment on the resignation of TomorrowNow executives beyond Monday's statement that it is weighing "several options" for the subsidiary, including its possible sale. TomorrowNow, which provides services-based support and maintenance for Oracle-owned PeopleSoft, Siebel Systems and J.D. Edwards & Co. technology, was acquired by SAP in January 2005.

Noting that SAP is the type of company that "doesn't like to look bad in public," Marc Songini, an analyst at Nucleus Research, said this week's actions show that the ERP software vendor is making a concerted effort to wash its hands of TomorrowNow's suspect actions.

"Whether or not there's any real culpability from the parent company [SAP] as far as illegal downloading, they don't want the black eye," Songini said. "So you had to figure somebody's head was going to roll. Obviously, it doesn't look good for SAP that it's doing this."

Ray Wang, an analyst at Forrester Research, said the departure of TomorrowNow top executives allows SAP to create a "fresh start" and reassures customers that such activities won't occur again.

"SAP's decision to remove the [TomorrowNow] management team is really just another part of the process of building credibility and accountability in that organization," said Wang. "Going forward, I think this really helps with the customers."

Wang did call departing TomorrowNow CEO Andrew Nelson and some other officials "pioneers" in third-party software maintenance. In particular, Wang said Nelson -- and his former TomorrowNow colleague Seth Ravin, who left the firm in 2005 to found another third-party support firm, Rimini Street -- should be recognized for helping to expose unfair costs and practices historically attributed to third-party software maintenance.

"[Nelson] really had a place and a role to play in terms [of] helping customers see 'what am I really getting for my maintenance dollars.' Too bad it had to end this way for [him]," remarked Wang.

Wang said that Rimini Street could be a viable alternative for existing TomorrowNow customers if SAP sells its subsidiary. He also speculated that Rimini Street could be a potential buyer for the firm.

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