Susan Luzzaro 6:32 p.m., March 16
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Even Later November San Diego Surprise from SAP
No Holiday Response Expected from Embattled Strong Mayor
SAP, lead contractor on the City of San Diego bookkeeping and accounting package that has been intended to unify City records-keeping, ease auditing, and return the City to the business of selling general obligation bonds that are now on indefinite hold, has just made that hold a little bit longer by losing a $1.3 billion industrial espionage judgment to arch-rival Oracle.
Associated Press reported this morning through the San Diego Union-Tribune that earlier this week, a federal jury in the Northern District of California "found that SAP's behavior in plundering software and documents from archenemy Oracle's secured websites was so egregious that it awarded Oracle nearly all of the damages it was seeking." Analysts reached for comment suggest that SAP will either appeal on some arcane as-yet-disclosed theory or simply burn over half of its annual profit to pay off the judgment.
Birds of a Feather...
The City of San Diego recently announced that its SAP-provided-and-maintained OneSD automated finance system was sufficiently corrupted from prior employee usage that audits are now suspended and no maturing municipal bonds are eligible for refinancing.
Preliminary reports by anonymous City employees indicated that the original software system design team was dismissed several years ago as a cost-saving measure. As software delivery deadlines fell by the wayside and the replacement designers and City analysts battled to re-constitute the original work done by the earlier team, vendor analysts from SAP were brought on board, but things are now so well MUNGed (Mangled Until No Good) that any thought of the City of San Diego being able to refinance its general obligation debt Any Time Soon is purely speculative as an academic diversion from handicapping next season's roster for Dancing with the Stars.
At the current time, SAP spokespersons claim that SAP software complexity issues are not a factor in the delayed City of San Diego audits, but confirmation of this is not available from the now-silent strong mayor's office. Ordinary reasonable people may wish to keep the above industrial espionage judgment against SAP in mind when they evaluate SAP corporate statements for their soundness and validity.
Informed watchers are waiting to see if this current convergence of tragicomedy relating to SAP and the City of San Diego generally will result in some action by rating agencies. There may be a ratings agencies' recalibration of San Diego debt issues in the absence of timely reliable audits and the near impossibility of getting the current SAP software package up and running to get those previously-missed audits out before the end of the Mayan calendar. As for SAP itself, its dominance of the industrial-strength business software package market in combination with most of its clients' relative unwillingness to change vendors of mission-critical business functionality on the fly does give SAP a kind of AIG-like cloak of too-big-to-fail invincibility.
This is actually an American security concern of national significance regarding the concentrated risk of economic collapse contained in the hazard of a single firm such as Germany's SAP making the apparently not-infallible software that keeps the authoritative record and tracks the history of so many corporate and municipal business transactions in a global economy.
This writer does not maintain any sort of "cloud" on the Internet as a rather obvious threat to legitimate business trade secrets, either my own or others. As a trained systems analyst and designer, I have no clue why major software purveyors so eagerly intend to convert all Internet-based documents and information into non-trade secret, open publications for anyone and everyone to read and refer to. Despite any amount of advertising to the contrary, the Internet is not secure and never will be as long as it is a network of mostly anonymous and rarely supervised computer servers operating behind closed doors that say "no admittance" except to anyone who happens to be wearing a baseball cap and overalls and carrying anything large enough to hide a laptop with USB ports.