Will Oracle's Suit Hurt SAP's Image?

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How should SAP handle the public relations?

If the case is well-founded and goes through, the lasting impact will depend on the messaging. An analogy can be drawn with the HP (HPQ) situation. [Chief Executive Officer] Mark Hurd made a public apology, went through the steps that were being taken to correct the situation, and so forth. That was an example of someone at the top saying, "That's not something we want to happen at our company and this is what we're doing to correct it."

That stopped a lot of tarnish to HP's reputation and helped the public say "that's out of character with HP and let's move on." Similarly, SAP could embrace it, figure out what went wrong—was it a lone wolf, a process issue, etc. And if they find themselves in the same position as HP, say what they're doing to ensure it's not going to happen again. How they respond is a fundamental test of whether it leaves a stain or not.

Rita Clifton

Chairman, Interbrand, London

How should companies deal with situations like this?

In crisis or reputation recovery, you need to first acknowledge the issue. The problem with HP, for example, is that it took ages for them to come out. Management needs to come out and acknowledge that people are concerned, whether they think it's their fault or not. Second, you need to go way beyond what you think is strictly necessary to correct the problem. Third: Communicate, communicate, communicate. The top person in the company needs to go out there saying what the company is doing. The worst thing a company can do is hide behind PR or—worse still—lawyers. In the media spotlight, putting lawyers forward says "We have something to hide."

And how do you think this will affect SAP's image?

With any situation like this the impact on a company's reputation depends on how strong the brand is in the first place, how big the screw-up is, and whether the incident attacks the foundation of why the reputation is strong to begin with.

As far as SAP is concerned, they have a very strong brand, a very strong heritage, and a reputation for trust and reliability. If they can isolate the incident, they can use the situation to highlight what high standards they have and show how they are going above and beyond this. They can use this as a platform not just for recovery but reputation enhancement.

Adam Shepherd

Research Analyst, Dresdner Kleinwort, London

What financial impact could this case have on SAP?

We do not expect SAP's prospects to be materially diminished or for this to have a material impact on customer spending and vendor selection decisions. Our research consistently does not infer any inflection points in terms of customer shift [from SAP to Oracle].

What could this mean for the TomorrowNow subsidiary and SAP's "Safe Passage" program, which attempts to lure Oracle customers over to SAP software?

We think Safe Passage is a peripheral, and not causal, factor in any customer decision to migrate from Oracle to SAP. We understand the majority of customers of Safe Passage are pre-existing SAP clients looking to smooth the transition from peripheral Oracle implementations to SAP. We think TomorrowNow's and Safe Passage's importance in influencing customers' vendor selection process will come under increasing scrutiny.

Do you think there's any merit to the allegations?

SAP is very unlikely to have benefited its own applications through SAP TomorrowNow's downloads from Oracle's support site.

Reinhardt is Europe channel editor for BusinessWeek.com. Norton is a BusinessWeek.com correspondent in London .