by Tony Westbrook

Good times down on Rimini Street

Feb 21, 20124 mins
GovernmentIT StrategyMobile Apps

See also: Rimini Street in 20 companies to watch in 2012

If you own a car, since the middle of 2010 EU antitrust legislation has meant that you can get it serviced not just at a franchised main dealer, but also at your local country garage.

Car manufacturers are now obliged to supply both parts and technical data on their cars to help your local grease monkey service the car.

And, if it’s under warranty, as long as your man (or woman) follows the required servicing routines, the manufacturer must continue to honour that warranty.

What a different world from that of the ERP suite.

Both items have a lifespan of around 10 years, but enterprise software vendors in general remain determined to force their customers into binding contracts which force them into in-house support prices and upgrade programmes.

Every CIO is on the lookout for ways to cut costs, so if someone comes along and offers to slash software support costs in half, they are going to take notice.

They certainly have in government circles, where one name has been on the lips of quite a few senior IT people in recent months: that of leading US third-party support company Rimini Street.

If you use an Oracle-related product, you’ll probably have heard of Rimini Street, though Oracle would rather you hadn’t.

The company offers support services across Oracle’s range of products and acquisitions: Siebel, JD Edwards, PeopleSoft and Oracle as well as competitor SAP’s ERP products.

Rimini Street’s proposition is simple: whatever you pay Oracle at the moment, we’ll halve the price and keep your systems operating.

It is an offer of particular interest to keepers of ERP systems of a certain age.

If you’ve had an installation for a few years already, chances are you’ve ironed out its wrinkles, made it do the things you need using bits of custom code and would now like it to earn its keep until you decide to go for a root and branch upgrade.

If so, you may be wondering why you are paying a premium rate for a support contract which includes upgrades you rarely need, is probably not the main focus of development activity for a vendor and which its reducing in value as a result.

“Customers are fed up with getting little or nothing,” says Nigel Pullan, Rimini Street’s European group vice president, of in-house support programmes.

Unnecessary upgrades, he adds, have other knock-on costs such as complex regression testing programmes.

Pullan says that more than 30 UK government bodies are talking to Rimini Street, with one central agency hoping to make an announcement within six months.

But what are the risks for a CIO of taking such a course? Well, Oracle, understandably, is not happy about Rimini Street occupying its territory.

A legal battle to challenge Rimini Street’s operations has been in play for over a year and will not even get to court for another year. The outcome won’t be clear until late 2013.

Rimini Street is postponing its IPO until the result is known. However, Pullan is confident that Oracle can’t make anything stick and that the company’s continuing success proves it.

“Forty-five of the top 500 global corporations already use the product,” he points out, “and they have done their due diligence.”

The whole episode echoes events of 2010 when a third-party maintenance company called TomorrowNow, acquired by Oracle’s arch rival SAP, was found guilty of infringing Oracle’s intellectual property in the course of providing maintenance services for some Oracle customers.

This guilty verdict wasn’t the end of the affair: an original $1.3bn jury award was reduced by the judge to $272m (£229m), followed by a further $20m (£16.8m) fine late last year. But, unhappy with this decision, Oracle has announced its intention to go back to court to challenge the reduction.

But if you can continue to get support on old systems at a much reduced price now, the result of what might transpire between two of your suppliers one or two years down the line may be irrelevant.