Munich, Germany – SAP AG, the world’s largest maker of business-management software, said it made “inappropriate” downloads of Oracle Corp. documents, responding to a lawsuit that claims the German company stole files from the competitor.
“We regret very much that this occurred,” SAP chief executive Henning Kagermann said on a conference call Tuesday. “Even a single inappropriate download is unacceptable.”
SAP, whose shares fell 2.1 percent, denied it had access to Oracle’s intellectual property.
The admission hurts SAP’s reputation as it battles with Larry Ellison’s Oracle in the $56 billion market for software that manages tasks such as payroll accounting. The rivalry between SAP and Oracle escalated when Oracle filed its March 22 lawsuit claiming SAP workers hacked into a website and stole software codes on a “grand scale.”
“It’s very embarrassing for SAP, which has always been seen as a technology leader and also in issues such as compliance,” said Ernst Konrad, the Munich-based head of equities at BayernInvest, which oversees $35 billion including SAP shares.
Shares of Walldorf, Germany-based SAP dropped 80 cents to 37.19 euros in Frankfurt.
The stock has fallen 10 percent in the past year, the only decline among the 30 members of Germany’s benchmark DAX Index.
TomorrowNow Unit SAP said it will “fully cooperate” with the U.S. Department of Justice, which requested documents from the company and its Bryan, Texas-based TomorrowNow unit. Bryan Sierra, a spokesman with the Justice Department in Washington, declined to comment.
A settlement with Oracle may cost SAP $100 million, Credit Suisse Group analyst James Clark and colleagues wrote in a note Tuesday. The case may last years, said Frankfurt Trust analyst Matthias Maus.In its lawsuit, Oracle said TomorrowNow used identities of Oracle customers and phony users to gain access to its systems. Customers for whom SAP allegedly conducted illegal downloads included Merck & Co. and Bear Stearns & Co., according to the March 22 lawsuit. Oracle didn’t say how much the damage cost the company.
Some downloads “may have erroneously exceeded the customer’s right of access” and were “in violation” of TomorrowNow’s policy, SAP said in Tuesday’s response.
