Bad news for IT buyers: Oracle sues Rimini Street

January 26th, 2010 was a black day for the enterprise software business.Late yesterday, Oracle launched a lawsuit against independent support provider (ISP) Rimini Street, alleging 'massive theft' of its intellectual property. Industry analysts had been expecting something like this - Oracle is already suing Rimini Street's predecessor TomorrowNow and was clearly worried that a competitive market would force it to cut the price of its hugely profitable maintenance offering.

IANAL, so I cant comment on the legal merits of the case, but I'm still extremely disappointed that Oracle has taken this step. It should be able to beat independent support providers on quality and value due to its scale, rather than trying to suppress fair competition by legal action on technicalities. I dont believe this is good news for Oracle customers. It may not even be good news for investors, if a 'public interest' defense prompts competition regulators to examine Oracle's software maintenance business model.

SAP will be watching the lawsuit with interest, not only because, as TomorrowNow's owner it is involved in the first case, but also because RiminiStreet is arguably an even greater threat to its business than it is to Oracle's. And it faces the same grumbling about fair competition as Oracle does.

Oracle customers should ask their account manager to explain RiminiStreet's alleged transgression, so they can ensure they dont also get accused of 'massive theft' for the same misdemeanour. Buyers using or considering RiminiStreet should do nothing for now, until Oracle confirms that it wont include them in the legal action.