Waste Management (WMI)’s claims against SAP (SAP) are another black eye for SAP along with the TomorrowNow/Oracle (ORCL) incident. In fact, a close reading of the related legal filings indicates there is a connection; a TomorrowNow-related Safe Passage agreement between the two was a part of the overall scope of work allegedly not performed by SAP.
Based on the details as laid out in the Waste Management legal documents, I would ask--if I were a juror--did Waste Management really believe there was an “out of the box” enterprise application for “ U.S. waste management?” The two key phrases in that question are in quotes:
- SAP offers the most industry-specific ERP software versions in the market but no enterprise software supplier is that industry specific. There are 9,999 possibilities simply going by the standardized industry classification code at the 4-digit level.
- Speaking of customization, “out of the box,” “no customization required,” “rapidly implemented” and SAP are not terms that roll off the tongue together cleanly unless you are a great poker player.
Actually, the publicized $100 million sought includes estimated lost opportunity costs; in its most recent 10-Q, Waste Management says it would take a $45-$55 million write down “if we decide to abandon the SAP software.” Only in America do we sue someone for $100 million while we keep using their product.
As for the TomorrowNow connection, the initial SAP press release about the Waste Management deals said WM “joins a growing list of companies that are leveraging the SAP Safe Passage program—a tailored package of solutions, technology and incentives—to migrate to SAP…” The legal filings do not say who the migratee supplier is in this case (and likely loser in the sales process) but given the publicity surrounding the law suit, I can guess. Safe Passage was the TomorrowNow-based offering from SAP to support “end of life” of Edwards, Oracle, PeopleSoft, Retek and Siebel solutions. That program has been abandoned and SAP considers TomorrowNow a “discontinued operation.”
As an aside, the legal filings say Shai Agassi was at some of the sales meetings. Maybe this is the real reason he left SAP?