As for Oracle, the vendor needs to act to avoid any negative publicity from the suit given that it named many customers whose identities were allegedly purloined by SAP and suggested that SAP customers unknowingly might be using services that contain Oracle's intellectual property. "It could be good for Oracle to say, 'We have no beef with the customer, our beef is with SAP,'" Mitchell said. "Or it could be perceived as Oracle picking on the customer."
Andreas Chatziantoniou, a software consultant specializing in Oracle products with Accenture Technology Services in the Netherlands, wondered about another potential negative hit on Oracle.
"From the reputation side, I believe that this can backfire," he wrote in an e-mail. "Oracle has a reputation for dumpster diving in order to get information about competitors," alluding to an incident in 2000 when Oracle defended the actions of detectives it hired to investigate two research groups that supported Microsoft during its antitrust trial.
The lawsuit might be Oracle's way to gain some extra publicity, following the release earlier this week of the vendor's third-quarter financial results, according to Chatziantoniou. Perhaps a case of "read between the lines: our results could have been much better when SAP would play by the rules," he suggested.
The lawsuit alone won't deter customers from buying SAP's applications, but the noise around the legal action might give both SAP and Oracle users the sense that the firms are distracted and not fully focused on customers' needs, he added.
Now isn't the time for either Oracle or SAP to lose focus, given the competitive threat they face.
Last week, Microsoft, which has tended to focus more on the small to mid-sized business market with its Dynamics applications, vowed to compete more aggressively in the enterprise market against Oracle and SAP.
Another issue that should give vendors pause is that customers have long memories when it comes to scandals, Chatziantoniou wrote. "Even years later, people (the decision makers) remember the 'bad publicity,'" he added. What might suit the vendors' customers and partners is an out-of-court settlement, he concluded.
"So far such a situation has never happened to me in my business life, but if it did I would consider the fact very heavily when doing business with such a company," Manfred Reif, a managing director at HSH Nordbank, a credit investment bank in Luxembourg, wrote in an e-mail response to comment on the lawsuit. "Nevertheless, first of all being suspicious and 'listening' to your gut feeling should be one's daily duty," he added.
Another factor to bear in mind is the number of customers Oracle and SAP share, Seth Ravin, CEO and president of Rimini Street, pointed out. He's a co-founder of TomorrowNow, selling his share of the company to SAP in early 2005 and establishing Rimini Street as a rival supplier of third-party maintenance and support.
While Oracle and SAP compete bitterly in the applications market, plenty of SAP users run their software on Oracle's database and middleware. It's in both vendors' interest to resolve the current dispute rapidly.
"So far, we've only heard one side of the argument," Ravin said, with SAP yet to comment.
Given how closely Oracle and SAP watch each other, he finds it hard to believe that the alleged actions by TomorrowNow were deliberate. "I strongly doubt it," he said, adding that such behaviour wouldn't be in anyone's best interests and would likely be quickly discovered. Oracle appears to require users of its customer support database to be "self-policing," he said, in other words, they have access to more content than their specific needs warrant, which may have led to some confusion about what was OK for SAP to access and what wasn't.
(James Niccolai and Peter Sayer in Paris contributed to this story.)