Teradata sues SAP over Hana for stealing trade secrets

Teradata has filed a legal suit in California against SAP, alleging that the Germany-based business software supplier stole its intellectual property in the late 2000s in order to make the Hana database.

Hana is the in-memory, columnar database platform on which SAP has been building its future since its introduction to the market in 2010. Most recently, it has been put at the heart of SAP’s customer relationship management (CRM) offer, C/4 Hana. And since February 2013, it has been core to SAP’s flagship enterprise resource planning (ERP) system, S/4 Hana.

Over the years, Teradata executives have criticised the in-memory approach on which Hana has been based.

But the data warehousing supplier has decided to take SAP to task in the courts. It has filed a complaint in the United States District Court for the Northern District of California against SAP, citing trade secret misappropriation, copyright infringement and antitrust violations.   

Teradata’s press statement said: “Teradata is alleging that SAP has engaged in a decade-long campaign of anti-competitive behaviour, to the detriment of the parties’ customers and Teradata alike. SAP lured Teradata into a purported joint venture in order to gain access to Teradata’s valuable intellectual property.

“SAP’s purpose for the joint venture was to steal Teradata’s trade secrets, developed over the course of four decades, and use them to quickly develop and introduce a competing though inferior product, SAP Hana. Upon release of SAP Hana, SAP promptly terminated the joint venture, and SAP is now attempting to coerce its customers into using Hana only, to the exclusion of Teradata.” 

The complaint goes on to allege that SAP has used its “powerful position in ERP applications to gain entrance to and quickly grab market share in the enterprise data analytics and warehousing (EDAW) market, in which it previously had essentially no presence.”

In 2013, Teradata executive Martin Wilcox told Computer Weekly that its view was that SAP had taken a wrong turn with Hana. “There are two views in the industry: SAP’s view that all data will be maintained in memory; and the view that unit memory costs are not falling as fast as data volumes are growing, so it does not make economic sense to store all data in memory,” he said. “The latter means you need to combine different storage mechanisms in a classic hierarchy.”

And Teradata’s chief technology officer, Stephen Brobst, said at that time: “For enterprise-class systems, we never see Hana. It is not in the game. It deploys operational data stores (ODSs). It is not economically rational for a large enterprise to put all its data in memory. Memory is getting cheaper, but data is still growing faster.”

But he continued: “I understand why SAP has taken the approach it has, because if you put all the data in memory, you can use brute-force software. Hana is relatively unsophisticated software.

“From a business strategy point of view, SAP does need to get Oracle out of its bed. Most SAP implementations on enterprise customers run on Oracle. They are sleeping with the enemy.”

The complaint is available on Teradata’s website. It turns on a joint 2008 project, called the Bridge Project, in which, according to the complaint, “Teradata and SAP entered into a partnership to develop a solution that would ‘bridge’ SAP’s top-tier ERP applications customers to an analytic solution based on Teradata’s market-leading EDAW product, which would be accessed through the interface of the SAP BW tool (the Bridge Project)”.

Postscript, 22 June 2018. Computer Weekly has received this statement by Vishal Sikka, who was, from 2002 to 2014, one of the SAP executives most closely associated with Hana, alongside Hasso Plattner, one of the supplier’s co-founders.

“As with all my endeavours, my work with SAP HANA was carried out with the highest integrity, professionalism and respect for all obligations towards trade secrets and intellectual property. Although this lawsuit is not directed at me, I categorically deny the baseless and outrageous allegations made by TeraData that attempt to diminish the hard work, passion, and the irrefutable and fully legitimate achievements by the Hana team, including myself.”