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Suit alleging SAP HANA database built on stolen IP questioned

Teradata sued SAP, claiming HANA was developed through thievery. But do the claims have merit? Or, is it a case of sour grapes due to loss of market share to a competing technology?

A lawsuit against SAP, in which Teradata alleged intellectual property theft led to the development of the SAP...

HANA database, raises more questions than it answers, according to consultant Joshua Greenbaum.

"The main issue that would be of concern to SAP, in my opinion, has to do with bulk data load -- the ability to pump that much data into a system like HANA," said Greenbaum, principal at Enterprise Applications Consulting. "That was a big issue when HANA was first developed and announced, and it's obviously an important capability."

However, what the columnar in-memory SAP HANA database does and what Teradata's relationship does are vastly different, making the idea of the lawsuit questionable (see sidebar).

"My initial reaction is that this is sour grapes. Here's a company that's being shut out of a data warehouse market that it helped create and feels that SAP has done this in an illegal or illicit way," Greenbaum said. "The idea that companies like Teradata are being disadvantaged in the market because vendors like SAP -- Oracle does this as well -- have put transactional and data warehouse functionality into the same database, that's absurd for Teradata to think that it's an illegal use of market position or in any way an infringement on a purely technical standpoint, because that's simply how the market has evolved."

SAP may feel negative effects of suit

My initial reaction is that this is sour grapes. Here's a company that's being shut out of a data warehouse market that it helped create and feels that SAP has done this in an illegal or illicit way.
Joshua Greenbaumprincipal at Enterprise Applications Consulting

HANA is well-established enough that SAP probably doesn't have to be too concerned, at least in the technical aspects of the case. But Greenbaum said SAP can't dismiss any potential negative effects entirely. The allegation that SAP used the joint venture as a bait-and-switch to gain intellectual property (IP) illicitly could be problematic, particularly in light of a lawsuit brought by Oracle in 2008 that alleged SAP illegally downloaded Oracle software for its now-defunct TomorrowNow support unit.

The Oracle suit against SAP was settled in 2014.

"It's concerning that the last time SAP got caught out in a big lawsuit with the TomorrowNow case, it turned out to be a genuine problem, as someone was misappropriating information in a clearly illegal way," he said. "I don't believe SAP does this culturally and that it's a systemic issue, but it's a little disconcerting to see an allegation like that resurface."

SAP's track record of developing the SAP HANA database on its own should support the technical issues in the lawsuit, Greenbaum said.

"But even if it were proven that there were some illicit acquisition of IP that contributed materially to the development of HANA, I don't think that's going to stall anything; that's a licensing problem that SAP would have to settle," he said. "From a purely technical standpoint, if I didn't do those things and can prove it, I would tell them to take a hike."

Teradata alleges joint-venture shenanigans

Did SAP steal the technology secrets that were used to develop its core SAP HANA database?

That's the contention of Teradata, a data analytics storage company, which filed a lawsuit in June against SAP alleging theft of intellectual property.

According to a Teradata press statement announcing the lawsuit, SAP is using its "powerful position" in the ERP space to gain entrance and "grab market share" in the enterprise data analytics and warehousing market, where it "essentially had no presence" previously.

SAP began this strategy in 2008 when it joined with Teradata in a joint venture that the suit alleges was used to gain access to Teradata's intellectual property. The venture was intended to combine SAP's ERP applications suite and Business Warehouse reporting application with Teradata's massively parallel processing architecture, but Teradata said this was done under false pretenses.

The Teradata press release contended that SAP then stole Teradata's accumulated trade secrets and used them to develop and introduce the SAP HANA database, "a competing (though inferior) product."

According to the statement, SAP then terminated the joint venture and is attempting to "coerce its customers" into using only the SAP HANA database and exclude Teradata by forcing adoption of HANA in exchange for upgrading SAP ERP applications.

Finally, Teradata said SAP could not have "so quickly developed and marketed HANA in the first place without its theft of Teradata's trade secrets."

The suit stated that Teradata learned of the alleged IP theft from an article in Der Spiegel on Sept. 5, 2015, that reported a former internal SAP auditor named Thomas Waldbaum concluded SAP had misappropriated proprietary and confidential information from Teradata during the joint venture.

SAP offered to discuss the allegations with Teradata, but was rejected, according to Andy Kendzie, a SAP spokesperson who sent the following statement via email:

Teradata has been aware of the allegations made by a former SAP employee for some time now. SAP offered to discuss and address these allegations with Teradata in 2015. Unfortunately, Teradata did not accept this offer and instead chose to file a lawsuit over two years later. While SAP remains willing to discuss Teradata's stated concerns, it will vigorously defend itself. The filing of this lawsuit does not impact SAP's ability to continue to deliver value to all of its customers, including SAP HANA customers.

Borrowing ideas from previous technologies is common

Teradata is obviously displeased with some past actions taken by SAP, but its exact motives for bringing the lawsuit are unclear, said Curt Monash, president of Monash Research and a technology analyst who follows the database management industry.

HANA has a different approach than Teradata's RDBMS products, but there are overlapping use cases between the two technologies, Monash said. And it's conceivable that SAP could have obtained some ideas from Teradata's technology that it could have implemented in the SAP HANA database. However, it seems unlikely that Teradata had much, if anything, to do with the original development of HANA.

"HANA's origins are well-known, and they have little to do with Teradata, so this would only be a question of certain particular ideas," Monash said. "I would not be at all surprised to discover that there were certain technical ideas first used by Teradata earlier than they were implemented in HANA, but I would not at all assume that that would mean there was a serious trade secret violation. In general, database management systems borrow all sorts of ideas from predecessor technologies, or improved upon them and then implemented, and nobody thinks this is wrongful."

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