The oracle at Compiegne

 

The even forces, at least on paper, that were standing in late 1939 at either sides of the Maginot Line, would not imagine that less than 6 months later, the initially outnumbered German army would inflict the French the worst defeat ever.

22 years earlier, Germany surrendered to the French. The French required the Germans to sign off the Armistice in a train wagon at Compiegne. The French kept the wagon as a monument to the French Victory and as well to the German Defeat. Fro the French, the German surrender of 1918 was a revenge to the German victories in the 1870s, and so it was carved on stone near the place where the train wagon was exhibited.

When in June 1940 the German flags were unfurled in Paris, the French High Command still had to formally sign its surrender, and they were called to do so at, precisely, Compiegne, and precisely in the same train wagon that the French had kept. Fro the German Leader, as important as the victory itself, the Germans were seeking revenge to the limit of humiliation. He instructed specifically his generals to set the ceremony that way. Anecdotally, the Germans made and intentional stop in front of the stone carving before the actual surrender signing.

We have witnessed recently the Oracle-SAP case verdict. It states that the latter has to pay the former the highest ever penalty in copyright infringement cases. Oracle’s victory sounds pretty much like the worst defeat ever inflicted to SAP.

It looks, however, like the Pontifex Maximus at the oracle is looking after his own Compiegne… Not really necessary, not fundamentally changing the lawsuit case, appearing more as a token gesture than a fundamental part of the trial, is this really something beyond a simple wish of humiliation?

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The German Choice

 

Since 1943, many German cities were heavily and systematically bombed by the USAAF and the RAF. The Allies strategy at that time was to use these bombings as a means to help their Soviet friends in the Eastern Front and to weaken Germany in preparation for invading Europe in the West, planned for 1944.

Hamburg, in Northern Germany, was one of the cities included in the bombing plan. After the war, in fact, as many other German cities, it had to be reconstructed from the ground. Anglo-Americans called the bombing of Hamburg Operation Gomorrah. Explicit enough, we’d say.It lasted 8 days and 7 nights.

One of those nights, in late July 1943, hundreds of American bombers approached the city, and started dropping its cargo. Several thousand feet below, a woman had to hurry to the bomb shelter as the nearby buildings started to be hit by the bombs, and fire caught in them. After several days and nights of no sleep, bombing targeted her neighborhood.

The woman was trying to race among hundreds of other women, men, elders and children. Her husband, an infantry officer in Russia, was not there to help, so she had to take care of her three children, aged 2, 5 and 7.

Panic was all over the place, shelters to few and small, were almost fully packed, so being the closest one impossible to enter, the woman had to go on to the next one.

More bombing, more buildings scrambling down, and the fire. Fire tornadoes everywhere (Gomorrah, remember?) with flames roaring so loud that is was impossible to hear the screaming and yelling from the people, from the women, form the elders, from the children, no matter how collapsed the streets were, hos close to each other people were.

The woman was exhausted, and so were her children. Carried along by the mass of people looking for protection, she could just hold her youngest boy in one arm, and hold her 5 year old boy with another. She had no more hands, and just seconds to decide.

But it was the toughest decision in her life. Which kid should she hold, who should run the risk to be left behind? She looked at her eldest, a 7 year old girl, and instructed instructed her to hold her mother’s skirt tight and keep running behind her, as close as she could.

The little girl could not make it. The crowd overran her, and she lost her mother and brothers ahead. Her brothers, held my their mother, made it to the bomb shelter. Two years later, they were still alive. the 5 year old boy, decades later, became one of the directors at Dresdner Bank in the Bundesrepublik Deutschland.

One of us met him years ago, in fact. This is not a fake story.

What choice do you make when you know that whatever you choose you are going to lose?

That German woman had to face a tough choice that would haunt her the rest of her life.

We would not like to be in the shoes of other Germans who have to make very hard decisions these days. And whatever they choose, they will suffer quite much.

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Collateral triangles

 

Every war has, besides its expectable casualties, additional damages that could not be avoided, predicted or foreseen.

In recent wars, the term “collateral damages” has been coined to justify or explain these unexpected damages.

We see a potential collateral damage to a company that has nothing to do, in principle, with the Oracle-SAP case, which is Hewlett-Packard. As much as its current CEO, Leo Apotheker, used to be CEO at SAP, and as much as he was a potential witness to the case, but managed not to show up, this could impact HP’s reputation somehow.

Now, at the same time, we are able to see a potential second collateral effect which might benefit both SAP and HP.

Should SAP shares lose enough value due to the trial’s verdict, it could be a potential good move for HP to do a little M&A with SAP… Still, a careful move to make, as it would be a very special situation for the former SAP CEO to acquire SAP precisely, when SAP just recently came out from the trial like it did.

Nothing against an ex-CEO to purchase as CEO somewhere else his former company. After all, HP PSG’s head, Todd Bradley, used to be CEO at Palm, and Palm is now part of HP, isn’t it? It’s more about the triangle made of SAP Ex-CEO now HP CEO – Trial – Shares losing value…

Interesting theory in our opinion, definitely worth blog posting.

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Beside America’s Cup

 

The jury has spoken, and they have decided SAP is almost as guilty as the oracle anticipated. The bill? $1.3 billion, close enough to the oracle’s demands, which rose to at least $1.6 billion, to quote Safra Catz, co-President at the oracle.

Precisely Safra Catz is probably one of the happiest persons in the industry, as she has been the key exec from the oracle, even beyond the Pontifex Maximus. Her two examples did make the magic on the jury, comparing the case to stealing a $2,000 watch and selling it for just $20, and the analogy based on Warner Bros copying illegally Disney’s movies. Clear examples, though arguable in our opinion,

We honestly thought the jury would take longer to decide, and its verdict would be closer to SAP’s position than to the oracle’s. We thought Big Mouth’s boasting all over, plus a real understanding of the oracle’s argumentation would have made the jury think that way.

Thinking a bit about the case, we think we missed some very important matters, the first one being that the jury is made of average common people, away from technicalities. Example’s like Catz’ have really been worth telling.

The second one is more related to the oracle’s ability to use the case for setting example of what happens when property, intellectual or physical, is stolen. Americans, by tradition, history and character, are extremely sensitive to private property. And this sort of result is what happens to thieves in America, the jury has said.

The third one is linked to the oracle’s ability to place SAP as a careful thief who was knowing exactly what they were doing, and kept on until they were caught. From the very beginning, the message from the oracle (supported by early declarations from the Pontifex Maximus) was pointing SAP as criminals against property.

The fourth one has been smartly played by the oracle too. They could not get hold of Leo Apotheker, and his absence might have been taken by the jury as cowardice, or his intention to hide something. We always thought he should have served as witness, but the possible damage for not having been there might have been too much.

Certainly exemplary, the case has anyway set a record in this kind of cases… Another trophy to stand beside the America’s Cup for the Pontifex.  

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Houdini

 

Harry Houdini was an Hungarian-born American magician and escapologist, besides other aspects of his professional life.

He is best remembered precisely for his escapologist tricks . That was his magic: To escape from any sort of super-complicated wrapping with ropes, handcuffs or even chains, and amazing his audience with his demonstrations.

Today Hewlett-Packard has reported sort of magic results, exceeding analysts expectations.

Given the recent “escapologist” experiences demonstrated by Herr Apotheker, as Oracle has unsuccessfully claimed his attendance as a witness to the current trial it is waging against SAP, it looks like we have a new Houdini at Hewlett-Packard, as he delivers magic results when he disappears!

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Fred’s car could be colourful too.

 

Imagine Bob (figured name) took Fred’s (figured name) without Fred’s consent and used it to get on time to a business meeting that reported Bob $1 million, money which not have been made by Bob if he had been late to his meeting.

After the meeting, Bob was arrested by the police for having stolen Fred’s car. Bob had not damaged the car, and he opposed no resistance to his arrest. In fact, offered to pay for the gas he actually used. The car was worth $30,000.

Certainly Bob caused Fred some damage, as Fred was not able to use his own car for some time, until the police returned it.

Leaving aside the criminal aspect (the actual theft), would Fred really have any right to claim any of the $30,000, just because the actual usage of the car was a necessary step for Bob in the process of making the $1 million deal?

We would say, not being experts at law, that Bob should pay Fred for the actual gas, the insurance cost for the time Fred could not use his own car, and a certain compensation for any additional cost Fred could have had after his car theft: Transportation, phone calls, Fred’s earnings during hose days in case he needed his car for work, plus a certain additional amount for the hassle.

But probably it would be unfair to have Bob paying the $30,000 just because he used it to make the deal.

Last Friday Safra Catz cared to appear once again to give testimony in SAP-Oracle ongoing trial. And she gave another illustrative masterpiece of analogies which could be better understood by the jurors. 

True that the oracle’s intellectual property has a value. True that it should not have been illegally acquired by TomorrowNow. But the fact it is valuable does not increase or diminish the harm made by SAP to Oracle, which is the fact being tried.

Fair to claim $1.6 billion at least, just because the cost of what SAP used was that much? By the way, it was the oracle who said it was worth $1.6 billion at least…

If SAP made $40 million with the 358 customers that were “safe-passaged” from the oracle, by selling projects at 50% discount on the oracle’s fees, it means that the oracle would have got $80 million at the max if having continued business with those customers.

$80 million, plus $120 million already agreed to be paid for attorney’s costs (no criminal charges dropped as well) seem much more reasonable a sentence to us.

Fred could have said, by the way, his car was worth $60,000, or $90,000, based on sentimental value as well… lots of time washing it in the driveway, lots of happy times spent in the back seat, perhaps… and eventual colourful cool tuning, why not.

Weak argumentation in our opinion to claim that much, Kitty… sorry, “Catz”.

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So much by so many to so few

 

After the French defeat in the West in 1940, only England opposed the German Third Reich in its quest to dominate Europe.

The next logical step for the Germans was, obviously, to defeat Great Britain. In order to do that, Germany needed to effectively invade the British Islands, a task that required either domination of the seas by the Germans (rather impossible a mission) or an overwhelming superiority in the air in order to protect landing forces.

On paper, Germany’s might was many times stronger than the British, particularly on ground  and air forces. Therefore, decisions were made, and Germany launched a series of massive air attacks against Britain, which were later to be known as The Battle of England.

Air combat was surrounded by a lot of propaganda from the German side, a lot of boasting, if you will, particularly led by the boss of the German Air Force, die Luftwaffe, Reichsmarschall Hermann Göring.

Numerically inferior, lacking pilots and limited in resources, the Royal Air Force resisted for months, using intelligence, technological advantages like radar and the geographical benefit of battling over British territory.

By the end of 1940, a period described by Winston Churchill, His Majesty’s Prime Minister, as “Britain’s darkest hour”, the German High Command gave up any plans for invading Great Britain.

The full merit of that first and decisive British victory was fully due to the very limited number of pilots who served at the Royal Air Force, RAF, and in one of his most memorable quotes, Winston Churchill said that “never in History was so much owed by so many –the British- to so few” –the pilots.

Our opinion, and not more than just that, an opinion, is that after all the propaganda-like boasting and the even violent attacks by the Pontifex Maximus at the oracle, with all his might and power, and despite the $120 million attorney’s fees to be paid by SAP, whatever the final result might be, the sentence will be closer to SAP’s position than to the oracle’s.

In this case, the savings for SAP compared to the potential total cost will be massive, so it could be considered an actual victory for the Germans. And in this case too, “never in the recent years so much was owed by so many –SAP employees and shareholders- to so few” –SAPs lawyers and particularly Top Execs, so few dared to appear.

Trying to be fair, however, we could have recommended the Pontifex to quote Winston Churchill too when he served his testimony, instead of boasting like a merchant sailor: “never in the recent years so much was owed by so many –SAP employees and shareholders- because of so few” –the actual “safe-passaged” customers.

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Staying in Moscow

 

When Germany invaded the Soviet Union in 1941 the world held its breath. Millions of German soldiers crossed the border, and once again smashed whatever troops the enemy put up against them in a major demonstration of the new way of leading war. Blitzkrieg, they called it.

Soviet units fell one by one anywhere the Germans appeared. Encircled by the dozens, the Soviet divisions surrendered and marched to the POW (Prisoner of War) camps in the German rear, or were killed on the spot. The biggest Army by manpower, the red units lost men by the millions.

The Soviet High Command was a complete disaster. No coherent defensive strategy was in place. And worst of all, Stalin virtually disappeared. It seemed he did not want to face reality, the brutal German invasion. Lacking leadership, Soviet cities fell to the Germans, dashing like lightning towards Moscow.

Soon enough, the Soviet government withdrew eastward, beyond the Urals mountain range, in order to reset itself and try to resist somehow the monstrous German tide. All the cabinet fled. All but Stalin.

When Moscow was nearing the German assault, Stalin finally appeared, almost at the very last moment. He delivered to the people one of his propaganda masterpieces, setting the guidelines for Soviet resistance. He was there, he appeared in the very last moment, proved he had not given up, and Moscow did not fall. Probably the Soviet peoples will to resist and ultimately destroy Germany started there and then.

Quarterly financial numbers have a reasonably good expectation for HP. However, from a share perspective, the HP armies are still being beaten by the major cataclysm of Mark Hurd leaving the CEO job in early August.

While struggling in this entourage, HP’s strategy seems to be the very same one Hurd designed and left for his successor to inherit. And Wall Street is not buying it. The biggest army by revenue, its strategy to recover capitalization value was not there.

And its master leader, its CEO, has not publicly shown up three weeks after his official start date…

If History repeats itself, Léo Apotheker should pop up soon, and as the Soviet people did, the market will certainly need a propaganda masterpiece to spark recovery and confidence in putting HP where it should be from that very moment.

Show up before Moscow falls, Léo. The subpoena matter at the SAP trial is a smoke curtain. You can, you should, you ought to. 

 

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Swift cats

 

Indeed the “trial of the month” moves forward towards its closure. Peculiar trial, dressed with a lot of surrounding attrezzo, from the Pontifex Maximus at the Oracle’s (aka Big Mouth Larry) venomous invectives to all the assumptions made here and there of where all this will end.

There has certainly been a big unbalance between the relative importance of the heavy-weight witnesses presented by the two parts. From the Pontifex himself and co-President Katz from the Oracle to Bill McDermott and Werner Brandt for the Germans, the overall declarations have as well fallen short to expectations, and basically around their original positions: up to $4 billion according to the oracle, not more than $40 million offered by the Germans. And none of the parts have given in more than an inch from those positions.

One of the strongest witnesses from the oracle, however, has been co-President Katz, whose main argument was about rewarding bad behaviour of the Germans. Ironically enough, “Katz” is a German name derived form Katze, meaning cat…

“It’s like stealing a $2,000 watch, selling it for $20, and offering to pay the $20 back as compensation”, she’s declared.

The argument is indeed difficult to respond appropriately after a first thought. It might have made a strong impression in the jurors on behalf of the oracle. as a good finance expert, she has even mentioned figures in her example that are exactly proportional to the figures discussed in the trial. 2,000 is 100 times 20, ad $40 billion is exactly 100 times $40 million. Very, very, very smart from hers.

However, there is a subtle nuance that jurors and judge Phyllis Hamilton should take into account. If someone steals your $2,000 watch, indeed he is stripping you off $2,000. Downloading copyrighted material is basically making a copy of that material. And copying it is not stripping you off the value of that material. So the point is basically that illegally copying copyrighted material, SAP used it for its own benefit without really preventing the oracle from using it on their own. In other words, it’s like an athlete unfairly competing in a running race by using illegal drops that reduce the competitive advantage of a better honest runner.

And this id probably why the actual damages (only 358 customers switched from the oracle to TomorrowNow, according to information available online) have been so small compared to the theoretical potential.

Not denying that SAP behaved bad, the already settled amount of $120 for criminal charges, plus damage reparations of $40 really sounds reasonable in our ears., though this is just an opinion of ours, who do not claim at all any expertise in law matters.

What we really are impressed with is Katz’s rationale and argumentation… together with a much more senior and mature attitude than her boss’. Indeed swift, indeed smart, indeed subtle, and probably very powerful. No surprise she sits where she does at the oracle.

Hard and tough rival in the internal struggle for the Pontifex heritage you got there, Mark Hurd…

 

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Quest for blood

 

The Pontifex Maximus at the oracle is not really willing to give up in his quest for blood from SAP. He wanted Apotheker’s, who fundamentally has been ignoring the case and has probably made a new record in air mileage in the last days.

Having failed there, still they got a heavy-weight official today, Bill McDermott, SAP co-CEO. It looks as if the Pontifex will not give up without a sip. A sip from SAP, naturellement.

Bill McDermott has formally apologized. Yes he has, and this is very positive for him and for SAP.

However, the oracle’s lawyers have repeatedly insisted in knowing if blood was spilt after the case within SAP.

For God’s sake, what else do these guys want? What is the point? Does that really increase or reduce the guilt SAP has admitted and (now) even apologized for? Does that impact the damages SAP has offered to (reasonably) pay for?

As we said in a previous recent post, frankly, they are beating the Germans up too much, as President WIlson and his European allies did in 1919 with the Treaty of Versailles that ended WWI.

The Pontifex’ thirst seems pretty much like a vampire’s… Twilight’s Vulturi?

 

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Bad Germans

 

It has been reported that the priests and the Pontifex Maximus at the oracle might be about to wrap their case up in the known copyright trial against SAP.

I guess it was an easy job for them, for in a nutshell, their summary is probably very similar to the Treaty of Versailles in 1919, which ended World War I.

As in that occasion, the message looks like:

Point One: The Germans are bad. The bill is $1.6 billion.

Point Two: The Germans are veeeeeeeeeeeeeery baaaaaaaaaaaaad. The bill is $1.6 billion.

Point Three: In case of doubt, please review previous Points One and Two. And the bill, in case of doubt, is $1.6 billion.

Very convenient and timely, as Germany recently finished WWI reparation payments, and therefore they are fresh for paying. $1.6 billion, should we have failed in hinting the bill.

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