Rimini Street Keeps Cashing in on Half-Off Oracle and SAP Maintenance Fees

At SAP's Sapphire show, Rimini Street CEO Seth Ravin expands his quest to provide an alternative maintenance and support service to Oracle's and SAP's -- for half their price.

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CIO: Who's the ultimate decision-maker on signing on with Rimini Street—CIO, CFO or CEO?

Ravin: The decision process is almost exclusively done by the CIO and CFO together. But the CFO is often pushing it because they're focused on dollar savings. So they're looking at the financial aspect—and, sure, risk is a key part of that equation. But they're looking at the risk-reward from the financial perspective. And the CIO is the one who's going to chime in on whether it will work from them, and will be able to run the business, and run the software they way they want to. So each of them plays a part.

But I would say, more often than not, it's the CFO who actually pushes our service through the door and signs for it.

CIO: What about what happened in Germany last month?

Ravin: It was pretty wild. I've been saying this for years: The last place that we expected to be was in Germany, because nobody takes on SAP on their home turf. Not Oracle. PeopleSoft didn't. It just wasn't something you did.

And here we were invited in by 30 CIOs who wanted to see an alternative to SAP maintenance. SAP was beside themselves over the whole incident. They clearly were perturbed. This is a good reason why we launched our website in German yesterday. We could have a potentially large footprint in Germany.

CIO: Do you have the talent and manpower to handle all this new business while taking care of the existing customer base?

Ravin: We've gotten hundreds of resumes, many of them from SAP employees who are looking to do something different, who are excited by the service. We've heard such things as: "SAP is not the same company that it was years ago, when it was customer-centric." That is the type of things that are driving a lot of folks to our door.

If you asked us years ago if we were concerned that there was not enough SAP talent out there, we would have said yes. Clearly we have benefited from so many projects cancelled due to the economic situation, and that's allowed us to pick up a huge amount of additional talent that might have been harder to acquire a year or two ago.

CIO: SAP is positioning Business Suite 7 as a product that will take care of upgrades and many of the hassles that are at the heart of Rimini Street's low-cost services. Are you concerned about Business Suite 7?

Ravin: Not at all. SAP has such a complex product line and road map that they've lost track and they're confused themselves. It's a nice vision of doing partial upgrades. But the problem is, if you really want to drive value, your parts have to connect together.

The whole strategy of moving one piece forward and not others sounds great from a whitepaper perspective, but if you saw what happened recently, SAP was having a hard time articulating to customers, who actually wanted to move forward on this path, what is that path? Do you have to apply all the different updates or separately? Are there dependencies from one to another? Pre-requisites? Co-requisites?

And don't forget, there are a huge number of SAP customers on older releases, and in order to even more forward to take advantage of a Business Suite 7, they will have to spend a huge amount of money to upgrade from their current releases just to get there before they can even take advantage of a future strategy. So you're talking about having to still write a check for a huge amount of money—new hardware, infrastructure, retraining of personnel—just to get to the point where you could actually take advantage of that.

CIO: Do your customers ever talk about "life after Rimini Street" and what will happen in a decade with their ERP systems?

Ravin: There is a group of companies so focused on current issues and bottom line that, for them, talking 10 years to 15 years from now is an eternity. They're trying to survive the next couple of years.

Some customers say, we'll look at a new product 10 years or 15 years down the line, and see what's available. And then with all the money we saved over the decade, we'll go on a capital shopping spree, and we'll pick our next system based on an actual vendor analysis—not because we paid for the upgrade 10 times over—but because we're going to pick the system that works best for us with the latest technology a decade from now.

The other important part of this is, [Rimini Street] is in a transitory service no matter what. We're trying to get customers to our model's vision: Basically once a decade or every 15 years, you're going to replace these back-end systems with a whole new system.

But the model that's been sold by the current software companies is: You install it and then you do these major upgrades every two to three years. And by the time you've finished getting one upgrade done you have to start planning for the next. It's a perpetual process.

CIO: You're selling a service that is directly opposed to SAP's maintenance-business model. Does that get confrontational at events like Sapphire?

Ravin: You mean, am I wearing a bullet-proof vest?

CIO: Yeah. Are there any awkward stare downs in the hallways as you're walking around?

Ravin: I was a VP at SAP for a short time, so I know these guys. I have a lot of respect for this management team.

You've seen where they said that they believe in competition in the market. We're a little competition [for them], and they may lose some points with some customers. But think about it: Those customers might have been lost to other software products. They're still running SAP products. They're just choosing a different vendor to get their support from.

At the end of the day, if everything works as the market should, SAP is going to have to work a lot harder building a better [support] program that's going to be more compelling to customers, and so are we. So the customer should win.

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Copyright © 2009 IDG Communications, Inc.

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