TomorrowNow and the future of third-party support providers

CIO Magazine has a long recap and analysis of the situation with SAP's TomorrowNow unit, which is the target of an Oracle lawsuit for IP theft. The article also looks at the future of the third-party support industry, which includes competitors of TomorrowNow, such as Rimini Street.

The conclusion: major enterprise vendor support business is hugely profitable--up to 90% gross margins--which gives a lot of room for third-party providers to make money doing it for less.

Rimini Street’s Ravin says neither the lawsuit nor the SAP press release has dampened his business. “Our business grew and went through the roof after the lawsuit was filed,” he says. That’s because in the lawsuit Oracle included dozens of companies from TomorrowNow’s customer list, which, he says, made other companies wonder, "Am I the only guy paying full price?"

Vendor such as Oracle and SAP, by charging an arm and a leg for support, have in essence created the business opportunity for third-party providers. If TN goes out of business, or Rimini Street acquires it, expect others to rise up to compete as well. That's the free market.

CIO's Magazine's article has more.

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