SAP’s Anti-Competitive Tactics – How SAP Used Accenture to Spy on a Software Partner

ByPrimary Researcher

Executive Summary

  • The reality of the SAP Partnership Program is far different than what is usually presented.
  • This article covers how SAP uses consulting partners to spy on and extract IP from partner software vendors.

Video Introduction: SAP Partnership Program

Text Introduction (Skip if You Watched the Video)

SAP has the most extensive vendor partnership program of any software vendor worldwide. This program presents the following characteristics to SAP customers and the outside world. SAP has enormous control over its partners, and the arrangement is anti-competitive and corrupt. Once in a partnership with SAP, SAP has approval over the partner’s marketing, often restricting any language that would make a vendor partner from being competitive with an SAP product. You will learn how SAP has weaponized its partnership program against partners.

Notice of Lack of Financial Bias: We have no financial ties to SAP or any other entity mentioned in this article.

  • This is published by a research entity, not some lowbrow entity that is part of the SAP ecosystem. 
  • Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department. As you are reading this article, consider how rare this is. The vast majority of information on the Internet on SAP is provided by SAP, which is filled with false claims and sleazy consulting companies and SAP consultants who will tell any lie for personal benefit. Furthermore, SAP pays off all IT analysts -- who have the same concern for accuracy as SAP. Not one of these entities will disclose their pro-SAP financial bias to their readers. 

How SAP Presents Its Partnership Program

  • A Collaborative Affair?: SAP presents this partner network to customers as a highly collaborative affair.
  • A Vibrant Vendor Ecosystem?: The partnership program is used as evidence that SAP has a vendor ecosystem and allows other software vendors to participate in this ecosystem for mutual benefit.
  • How Many Partners? : SAP often talks up how many vendor partners it has without revealing much about how the vendor partner program works.
  • Partner’s Freedom of Expression?: Not a single word is uttered regarding what happens to the partner vendors’ rights of expression.
  • A Pro-Competitive Tool? : Appearances to the contrary, SAP uses the vendor partner program as an anti-competitive tool, something for which it is close to impossible to find published material.
  • One Big Happy Family? : Vendor partners talk up the SAP vendor program to prospects and do not critique it publicly or to customers or prospects. In private, they often bitterly condemn SAP as a partner.

The Case of Accenture and Wellogix

This article describes how SAP used its consulting partner Accenture to extract intellectual property from a software vendor called Wellogix. These quotes are from a CIO article.

This article’s quotations are eerily similar to what has come to be a distinct pattern with SAP. Some quotes include the following:

“While SAP already had an SRM (supplier relationship management module) that could handle some procurement tasks, it was inadequate for “complex services,” according to the complaint. “Wellogix had a working version of this software, and SAP was aware that it worked in a large client environment such as BP.”

After the deal was signed, a number of SAP employees visited Wellogix’s offices for a few days in order to “kick-off the NetWeaver Partner Agreement and perform [SAP’s] due diligence on Wellogix for the purpose of either investment in or the acquisition of Wellogix,” it adds. “During the workshop, employees of SAP went through Wellogix’s P2P software code in person with Wellogix personnel disclosing parts of the code structure.”

But instead of following through with the partnership, SAP used Wellogix’s trade secrets to “replicate the capabilities” of its software and incorporated them into its own SRM products, according to the lawsuit.”

This is all very standard. In fact, after seeing SAP work this way for years, I feel I could have written this script without having to read the article. However, the next part of the allegation becomes even more interesting. This is because SAP did not act alone to steal Wellogix’s IP:

“In 1999, BP America hired Accenture to help it “create a paperless (i.e. electronic) process in oil field services,” it adds. “After a thorough review of over twenty vendors, including SAP, Accenture recommended Wellogix.”

In January 2002, Wellogix and BP signed a software and services agreement, it adds. But Accenture then obtained confidential trade secrets from Wellogix and passed them along to SAP, according to the complaint.

Wellogix also sued Accenture in 2008, and won a $94 million jury award against the company earlier this year. Last month, a judge lowered the award $50 million and told Wellogix it could either accept the new amount or hold a new trial.”

And this is also not surprising. I have been writing that SAP is far too powerful with the major consulting firms. Significant firms usually recommend SAP, no matter how poor the fit is. For most clients I work with, the most appropriate software is not selected from a requirements and functionality perspective. There are several reasons for this, but one primary reason is that significant firms like Oracle and SAP distort the market, making it far less efficient — as an economist would consider it, than the consumer software market. There is a great misunderstanding regarding the nature of market efficiency. Markets do not automatically become efficient through competition. Calls must be kept fair for an efficient market as companies desire to build monopolies. This is generally poorly understood, as some economists (many who take money from cartels themselves) do not emphasize it. This is the entire reason for anti-trust regulations, generally unknown to the public.

Regulation performs the same function performed by referees at any game, and a fair match can only be ensured by an impartial intermediary that enforces the game’s civil rules. Those who use the term “free markets” or competition without understanding this feature of markets fundamentally do not understand the entirety of economics’s history. The efficiency of the enterprise software market is vital for the overall economy’s efficiency, as is discussed in this article.

Major consulting companies maximize their revenues by recommending SAP, which is why software selections performed by the major consulting companies are essentially rigged, as I described in this article.

Accenture and Other Consulting Firms Functioning as Spys for SAP Used Against Partner Software Vendors

In this case, Accenture (not only accused but has been found guilty) conspired with SAP to help SAP steal intellectual property from a smaller vendor. This must have caught Wellogix entirely by surprise.

However, it shouldn’t have.

First of all, Accenture has a terrible reputation for unethical behavior. Major consulting firms like Accenture receive so much of their consulting revenue from SAP that they are almost an arm of SAP. The best terminology I can use to describe the relationship is that they are remotely controlled.

It is now a consulting company (and I would tend to doubt Accenture is the only one) assisting SAP in stealing IP from a vendor, which the vendor freely shared with Accenture. If the FTC or other body does not eventually stop the behavior, it will worsen because SAP grows bigger every year, and very simply, power corrupts.

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