The legal fight brewing between ERP/wannabe-CRM giant SAP and Siebel Systems has all the makings of a classic playground brawl: A bully, a new kid at CRM school and yes, chocolate. Despite all the grade school elements, this matter will not be settled at recess, but in Pennsylvania state court, where SAP recently filed a lawsuit against Siebel. The suit alleges that the CRM leader has engaged in "predatory hiring practices" and other nasty tactics designed to undrmine "SAP's ability to compete with Siebel in the CRM marketplace."
SAP, a key player in ERP industry, has in the last few years joined other big ERP vendors like Baan and Oracle in focusing their sights on the lucrative, rapidly growing CRM solutions market, a space controlled to a large extent by Siebel Systems. While these efforts are relatively new, to date none of these established ERP vendors has succeeded in capturing significant market share from Siebel.
In the lawsuit, SAP further alleges that, "Over approximately the past year, Siebel has engaged in a systematic effort to injure SAP's business..." which, according to the complaint, "constitutes unlawful, unfair competition, involving the predatory hiring of SAP's key managers and executives," a.k.a. "poaching." The list of allegedly poached employees includes, among others:
- SAP's former Chief Executive Officer
- The President of SAP
- Senior Vice President in charge of Latin American Sales
- Director of e-Commerce Development
- Director of Sales, Western Region
But the allegations don't end there. SAP alleges that Siebel CEO Tom Siebel, never a shrinking violet, has been publicly spreading some nasty rumors about SAP by saying the following:
"Laboring under the unflattering image of a company that takes chocolate away from children, SAP is feeling a bit sensitive these days."
"...SAP is formerly a great company..."
"...the only resume from SAP that had not crossed his desk was Hasso Plattner's (Chairman, SAP America)..."
"...in terms of product development at SAP, someone holds a bunch of press conferences, and then hops on his G-V (private jet) and flies off to sail from Sydney to Perth or Fiji, or somewhere..."
This lawsuit comes on the heels of another unfortunate association between SAP and Siebel Systems. As recently reported on page one of the Wall street Journal, the two companies provided software to all-American chocolate giant Hershey as part of a spectacularly unsuccessful automation initiative that all but paralyzed the candy maker's distribution system. According to the article, Hershey was unable to meet its Halloween orders, and the problem could continue through Easter. The article quoted a Siebel exec as saying in effect that Hershey had assured Siebel-a big Wall street Journal advertiser-that the problem was not with its software, but with SAP's.
Not surprisingly, laboring under the unflattering image of a company that takes chocolate away from children, SAP is feeling a bit sensitive these days. SAP declines to comment on the lawsuit; Siebel simply states that the lawsuit is without merit. But, in the complaint, the hurt feelings come across loud and clear. It states, "The concerted campaign described above on the part of Siebel to tortuously interfere with SAP's contractual relations with its employees, pirate away SAP's key executives and managers, misappropriate SAP's confidential, proprietary and trade secret information and otherwise unfairly compete with SAP, is designed primarily to injure SAP's business and impede SAP's efforts to compete with Siebel."