Tuesday, March 17, 2009
Vinnie Mirchandani has a new post today, calling attention to another third-party maintenance firm, Spinnaker, which provides an alternative to JDE support directly from Oracle.
Read Vinnie's entire post for the details. In addition, Spinnaker's FAQ page has a good FAQ, which outlines the support services it offers, along with its perspective on how its services are different from those offered directly by Oracle.
I expect to see more firms like Spinnaker rising up these days, for two reasons:
For those consulting firms that are partners with major vendors, such a move will not be viewed kindly. On the other hand, some of these vendors have not been such great partners themselves in the current economy, in many cases competing with their partners for services business. So, what will the partners really lose by competing for the maintenance business?
- Customers are growing tired of escalating costs of enterprise software maintenance and support contracts. For too long, these services have been dominated almost exclusively by the software developers themselves. This has created an unhealthy, anti-competitive, situation where the cost of maintenance often far exceeds the value delivered. A backlash has been brewing now for several years, especially among customers of Oracle and SAP, which have escalated their support costs to the neighborhood of 22% of the original software license cost. Do the math: in less than five years, you will have paid twice for your system.
- The current economic recession is causing consulting firms, VARs, and other services providers to look for ways to diversify their businesses. The project-based nature of implementation and version upgrade services is difficult to manage: in boom times, they never have enough people, and in lean years, as today, they can't keep people busy. The contract maintenance business, in contrast, is a subscription business, with regular recurring revenues--something that sounds particularly attractive in today's economy. In addition, these firms often have personnel with many years of experience in particular software packages, sometimes much more than those staffing the vendor's support desk. So, why not go into the contract maintenance business?
I want to see firms like Spinnaker thrive. In the long run, a robust third-party support industry will be good for customers and good for enterprise systems overall.
If you know of other third-party support providers, whether for Oracle, SAP, or other vendors, let me know, and I'll be glad to call attention to them.
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