Published on the 26/06/2018 | Written by Pat Pilcher
Alleged theft of trade secrets used to create HANA…
Fur looks set to fly as Teradata takes SAP to court amid claims SAP ‘appropriated’ Teradata’s intellectual property for its HANA system.
In a complaint lodged with the District Court of Northern California, Teradata said SAP accumulated some of the knowledge necessary to create SAP HANA out of a joint venture alliance in 2008. In the complaint, Teradata said that without the partnership, and alleged theft of intellectual property, the development of HANA could not have happened so rapidly.
Teradata was founded in 1979 and is a pioneer in enterprise data analytics and data warehousing. NCR acquired them in 1991 and spun them off as a separate company in 2007.
“Teradata asserts that SAP, by forcing its customers to adopt HANA when they upgrade to the latest version of SAP, is impacting on Teradata sales because S/4HANA was “wholly incompatible with other transactional databases and can only run on HANA”.
SAP HANA is an in-memory relational database system launched by SAP in 2010. The database has become a foundation for much of SAP’s software including the S/4HANA line of ERP applications and C/4HANA line of CRM applications launched at the recent Sapphire Now conference. SAP HANA gets used by an estimated 10,000 customers and is projected to reach about 15,000 sites by 2020, according to publicly available SAP data. That’s around 5 percent of the total SAP sites installed.
The SAP and Teradata ‘Bridge’ joint project intended to combine SAP’s ERP and business warehouse reporting capabilities with Teradata’s massively parallel architecture. Teradata said it was during Project Bridge that they shared intellectual property with SAP.
SAP ended Project Bridge two months after announcing HANA 2011. Teradata asserts that SAP, by forcing its customers to adopt HANA when they upgrade to the latest version of SAP, is impacting on Teradata sales because S/4HANA was “wholly incompatible with other transactional databases and can only run on HANA”. In effect, Teradata contends that SAP is leveraging its market position to lock customers into SAP at their expense.
The logic is straightforward, if not strongly supported by the rate of HANA uptake. Changing ERP platforms typically involves sizeable costs for customers. Teradata contends that this, plus the fact that SAP is attempting to get customers to use HANA for enterprise data warehouse purposes, is how SAP’s ERP customers end up locked into SAP’s proprietary technology, at Teradata (and others) loss.
Teradata’s most recent financial results show a seven percent decrease in revenues, as well as a net loss of US$67 million for their 2017 business year, off revenues of around US$2 billion. They claim this is a result of SAP’s actions and that this has led to “irreparable and ongoing harm to Teradata in the form of lost customer relationships and opportunities, lost profits, and continued erosion of market share”.
