Teradata lobs sueball at SAP, alleges HANA based on its ‘trade secrets’

Data warehousing biz Teradata has flung a sueball (PDF) at SAP in the District Court for Northern California, alleging the German ERP giant undertook a “decade-long campaign of trade secret misappropriation, copyright infringement and antitrust violations”.

Teradata claims that SAP used its strong position in ERP to “lure” the US biz into a joint venture back in 2008 and alleges it then took the opportunity to accumulate the info necessary to “quickly grab market share” in data warehousing.

The suit, filed yesterday in the Northern District of California, comes just as SAP is attempting to rebrand itself as more than just a boring back-office firm, with the launch of its new CRM suite, and move on from the saga around indirect access and the corruption scandal in South Africa.

Teradata alleges that the bigger firm “stole” Teradata’s intellectual property and used it to create the SAP HANA data platform and gain entry into the enterprise data analytics and warehousing (EDAW) market.

In a complaint (PDF), Teradata said that SAP had developed and deployed HANA in less than a year, alleging that it “could not have so quickly developed and marketed HANA in the first place without its theft of Teradata’s trade secrets”.

The joint venture – known as the Bridge Project – aimed to combine SAP’s ERP applications suite and business warehouse reporting tool with Teradata’s massively parallel processing architecture, and Teradata noted that it had shared proprietary techniques and trade secrets with SAP for that work, and under strict non-disclosure agreements.

However, SAP ended the partnership just two months after it announced general availability of HANA in 2011 – and the complaint claimed SAP then attempted to edge Teradata out by “forcing its customers to adopt HANA in exchange for upgrading their ERP Applications”.

Teradata alleged this included launching a new ERP suite, S/4HANA, that was “wholly incompatible with other transactional databases and can only run on HANA”.

SAP is “exploiting” its position in the ERP market to lock in customers, Teradata alleged.

“Given the extremely high costs of switching ERP providers, SAP’s ERP customers are effectively locked-in to using SAP’s ERP Applications, and SAP is now attempting to lock them into using only HANA in the EDAW market as well,” the firm alleged.

The complaint also claimed that SAP has “begun significantly restricting Teradata’s ability to access customers’ SAP-derived data” and that it was trying to “foreclose Teradata from supplying EDAW solutions to many of the largest corporations in the world”.

Prior to the launch of HANA, Teradata said, the German biz had “essentially no presence” in the EDAW market. In contrast, the US firm claimed that it had been a leading provider for almost 40 years, listing its development history and noting it holds more than 1,000 patents on database and data analytics technologies.

The smaller firm – which reported a 7 per cent drop in revenues, to $2.2bn, and net loss of $67m for fiscal 2017 – claimed that SAP’s “anticompetitive strategy has resulted in irreparable and ongoing harm to Teradata in the form of lost customer relationships and opportunities, lost profits, and continued erosion of market share in the very industry Teradata pioneered”.

The firm is seeking an injunction barring SAP’s “illegal conduct”, along with monetary damages and other relief, and demanded a trial by jury of all the claims and issues set out in the complaint.

SAP told The Reg: “SAP was surprised to learn of the complaint filed by Teradata earlier today in the U.S. District Court for the Northern District of California. Although SAP generally does not comment on pending litigation, SAP may issue a statement, if appropriate, after it has had an opportunity to review the complaint.” ®

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