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UPDATE 2-SAP to wind down operations of TomorrowNow

(Updates with SAP comment)

NEW YORK, July 21 (Reuters) - Software maker SAP AG SAPG.DE will wind down the operations of TomorrowNow, the focus of a lawsuit lodged by its arch-rival Oracle Corp ORCL.O, after deciding against a sale of its U.S. unit.

SAP said it would conclude the process before Oct. 31 and is working directly with more than 225 TomorrowNow customers in the transition.

“We carefully considered options for selling TomorrowNow. It would have been an extremely complicated transaction for both the seller and the buyer,” SAP spokesman Saswato Das said on Monday.

SAP does not expect any material financial impact from winding down the business.

SAP, the world’s biggest maker of software that helps companies automate and standardize business processes, said in November it would consider a sale of TomorrowNow as the subsidiary’s chief executive and other managers resigned.

TomorrowNow provides support for customers using PeopleSoft and JD Edwards software. SAP bought the company in 2005 after Oracle bought PeopleSoft, which in turn had acquired JD Edwards, aiming to profit from uncertainty among PeopleSoft and JD Edwards customers.

“Our goal is to assist our customers in transitioning to a new support provider, including Oracle, without a disruption to their support,” TomorrowNow Executive Chairman Mark White said in a statement on Monday.

Oracle is suing TomorrowNow for corporate theft, accusing the SAP unit of illegally downloading masses of Oracle customer service materials and passing the documents to SAP. Oracle said last month the damages it seeks could top $1 billion.

SAP has admitted that TomorrowNow employees inappropriately downloaded some Oracle materials.

Oracle declined comment on the SAP statement. (Reporting by Michele Gershberg, editing by Dave Zimmerman and Gunna Dickson)

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