Oracle Corporation et al v. SAP AG et al

Filing 853

Declaration of Elaine Wallace in Support of 851 Memorandum in Opposition, Declaration of Elaine Wallace In Support Of Defendants' Opposition To Plaintiffs' Motion No. 1 To Exclude Expert Testimony Of Stephen K. Clarke filed bySAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36)(Related document(s) 851 ) (McDonell, Jason) (Filed on 9/9/2010)

Oracle Corporation et al v. SAP AG et al

Doc. 853 Att. 22

EXHIBIT 22

Dockets.Justia.com

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66.

First, the timing of the license would be critical to both parties: Oracle

w had just agreed to pay multiple billions of dollars to acquire PeopleSoft; SAP anted to take advantage of the fear, uncertainty and doubt of PeopleSoft customers at that time, and knew that it had to strike quickly, which the 1 TomorrowNow acquisition allowed them to do. 67i . Second, Oracle would consider and extract a price for the financial

d pact on Oracle of licensing to a competitor that has abundant resources to m irectly compete with Oracle in providing a level of PeopleSoft and J.D. Edwards serviceTthat has little, to no other, competition.

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52a .

SAP is Oracle's most significant competitor in enterprise applications

nd, under the contemplated database license, would be using Oracle's database software to compete for Oracle's application support business at critical junctures in the two companies' histories (at the time of Oracle's T acquisition of PeopleSoft and Siebel, and at the time of SAP's acquisition of domorrowNow and launch of support service for Oracle applications, as is escribed elsewhere in my report). However, the effects of Defendants'

actions on Oracle's PeopleSoft, J.D. Edwards, and Siebel customer bases have lready been taken into account in my quantification of the value of use of c licenses for those applications. Thus, I have limited SAP's value of use of the t opyrighted database materials in suit to the measure of the lost license fees hat SAP would have had to pay Oracle had it purchased a license (similar to a p separate OLSA) for each relevant customer for which TomorrowNow rovided application maintenance services using an Oracle database.
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m rposes of determining SAP's value of use of the copyrighted database u aterials in suit, I have applied Oracle's pricing for its standard OLSA licensing terms assuming a particular configuration of TomorrowNow hardware. I have not included any fees for options or upgrades that may have been needed by TomorrowNow for each customer in order to emulate its customers' environments. These additional fees could be considerable. For example, some options have additional license fees of 25% 50% of the

U enterprise edition license fees. I understand that for an Oracle Standard (Full E se) license, Oracle would price the database license using its Enterprise dition, utilizing the count of processors (or cores on each processor, for r multi core processors) on the servers with Oracle database installed or unning.526 specifications: x E Oracle's list price per processor for the basic Enterprise 2 dition license and support was consistent between 2004 and 008 at $40,000/processor for the license and $8,800/processor per year for support.527 Therefore, I have used $40,000 per c ustomer per processor as the one time perpetual license fee y and $8,800 per processor per customer as the support fee per 5 ear. In pricing this license, I have considered the following

Discussion with Richard Allison. Oracle Software Investment Guide, TN OR 01765697 752, at 709 and 714. For c urposes of this analysis, a "processor" refers to either the CPU itself for single core chips or each core, for multi p ore processors.
52 B7 Oracle December 2004 E Business Global Price List, ORCL00704411 433, at 412; Oracle September 2006 E Lusiness Global Price List, ORCL00704381 410, at 382; US$ Pricing Oracle Database filename: ePL071708 JDE ocalisable Price lists.xls, ORCL00213686. Oracle's price lists also show options including Enterprise Edition Options such as Real Application Clusters, Partitioning and OLAP. Enterprise Edition Options are priced in a oddition to the license fees and the listed options range from an additional $10,000 to $20,000 per processor per ption. See Oracle December 2004 E Business Global Price List, ORCL00704411 433, at 412.

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o TomorrowNow installed and ran Oracle database software s n numerous servers that had 2 to 4 processors which were single to quad core, or effectively 2 to 16 processors per cerver when considering Oracle's pricing practices, which o w nsiders each core for a multi core processor.528 The server r ith the majority of TomorrowNow local environments aunning on Oracle database was purchased in January 2005 end was a 4 processor Unix server with dual cores, or ffectively 8 processors, based upon which Oracle would f price a license for 6 processors (Oracle applies a .75 processor tactor to Unix processors, so 8 * .75 = 6 processors priced in x he license).529 w Per discussion with Richard Allison, I understand that Oracle ould have priced the license based on the largest server configuration. Therefore, I have assumed that Oracle would
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2 F 8 Defendant TomorrowNow, Inc.'s Eighth Amended And Supplemental Response to Plaintiff Oracle Corporation's irst Set of Interrogatories (Set One), December 4, 2009, Interrogatory No. 11 pgs. 42 55. (Identifying TomorrowNow servers with Oracle database related files). Defendant's First Supplemental Responses And Objections To Plaintiffs' Fifth Set of Interrogatories To Defendant TomorrowNow, inc. and Fourth Set of I nterrogatories to Defendants SAP AG and SAP America, Inc., December 4, 2009, pgs. 7 32. (Identifying a omorrowNow servers with Oracle database related files and confirming that customer local environments T ccessed Oracle database files). Email from Joshua Fuchs (Jones Day) to Nitin Jindal (Bingham McCutchen), February 19, 2010 identifying the number of processors, number of cores and the date of purchase for each server i L entified in interrogatories as having an Oracle database installation. See also, October 28, 2005 email from George d t ester to Jennifer Mrak (SAP), TN OR01020812 818 at 812 (G. Nelson Exhibit 1831), indicating that, "I have been rying to procure a license for Oracle Standard Edition on two of our internal servers, which each have 4 CPU's."; a mail from Alex La Mar (TomorrowNow) to Greg Nelson (TomorrowNow) on March 20, 2006, TN OR01040829 34 E t 829 (G. Nelson Exhibit 1832), indicating "we need to obtain Oracle Standard Edition for a 4 CPU machine running AIX and a 4 CPU machine running Windows." 5 29Email from Joshua Fuchs (Jones Day) to Nitin Jindal (Bingham McCutchen, February 19, 2010 identifying the number of processors, number of cores and the date of purchase for each server identified in interrogatories as having an Oracle database installation. TomorrowNow PeopleSoft Growth Projections, TN OR02171843 848, at 844, identifying Quad Processor Unix Database Server as the location for the majority of PeopleSoft environments r 0unning on Oracle Database software); Discussion with Richard Allison; Oracle Software Investment Guide, TN OR 1765697 752, at 709 and 714 (identifying the Unix processor factor as .75).

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eequire SAP to purchase no less than a license that covered ach customer accessing Oracle database priced at 6 processers per license. A 6 processor Enterprise Edition

Oracle database license would be priced at 6 processors times the license fee of $40,000 per customer, or $240,000 per customer, and an annual support fee of $8,800 times 6 5 processors, or $52,800 per year per customer.530

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r30 Oracle Software Investment Guide, TN OR 01765697 752, at 713 714. I am not aware of any technological reason d lated to Oracle's database or applications to explain why TomorrowNow built environments on servers with e ifferent processor configurations.T

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