UPDATED 12:53 EDT / JUNE 20 2018

BIG DATA

Teradata sues SAP, alleging trade secret theft

The nearly decade-long romance between data warehousing vendor Teradata Corp. and SAP SE has ended in divorce.

Teradata Tuesday filed suit against the enterprise resource planning giant in the U.S. District Court for the Northern District of California, accusing SAP of taking advantage of a 2008 partnership between the two companies to steal Teradata trade secrets that it then used to develop its enormously successful HANA analytical database management system. Claiming that SAP’s actions have “irretrievably harmed Teradata,” the suit seeks unspecified damages and an injunction against SAP’s continued use of what it alleges is confidential Teradata information.

An SAP spokesman said the company “was surprised to learn of the complaint.” SAP wouldn’t comment on the specifics, but the company “may issue a statement, if appropriate, after it has had an opportunity to review the complaint.”

Teradata’s 36-page case claims that SAP lured Teradata into the joint venture with the stated objective of ensuring fast and efficient interoperation between SAP ERP and Teradata’s enterprise data warehouse. SAP then methodically stole Teradata intellectual property that it used to solve some key, scalability and integration problems before unilaterally terminating the partnership in 2011, the complaint alleges.

The suit alleges “HANA developers … utilized the same solution developed by Teradata’s engineers and developers [during the two companies’ collaboration] using Teradata’s trade-secret techniques for optimizing the execution of  analytical queries and the speed of data storage and retrieval in large-scale databases,” the suit says. It further claims that “key SAP employees, including [former SAP Chief Technology Officer Vishal] Sikka, the so-called “mastermind” of HANA, were aware of and supported SAP’s “misappropriation.”

In blunt language, Teradata alleges that SAP is “now attempting to coerce its customers into using HANA only, to the exclusion of Teradata” in an effort to lock them into the SAP platform. HANA has been a linchpin of SAP’s strategy for much of the last decade and the connective tissue among the company’s latest generation of applications. In January, the company said S4/HANA had 7,900 customers, up 46 percent from the previous year.

Having misappropriated intellectual property, SAP then sought to block customers from using data warehouse technologies other than its own, Teradata alleges. Given the extremely high costs of switching ERP providers, SAP’s ERP customers are effectively locked into using SAP’s ERP applications, and SAP is now attempting to lock them into using only HANA in the [enterprise data warehousing] market as well,” the complaint says.

Intellectual property suits are relatively rare in the computer industry and almost unheard of in the enterprise market, with most disputes resolved behind closed doors. Among the more notable recent examples were the battle between Uber Technologies Inc. and Alphabet Inc. over trade secrets related to autonomous vehicles and Samsung Electronics Co. Ltd.’s legal tussle with Apple Inc. over mobile phone design.

Image: SalFalko via photopin cc

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