Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Wednesday, July 15, 2009

No recession for Rimini Street third-party maintenance business

Rimini Street, which offers alternative maintenance and support contracts for Oracle and SAP customers, reports today that its books in the first half of 2009 increased four-fold over the same period last year. It gets better: second quarter bookings increased six-fold over the same quarter last year.

In further evidence of a surging business, Rimini Street reports:
  • A four-fold increase over last year in its J.D. Edwards client base
  • US-based staff growth of almost 25%, while expanding its support operations into Europe and Asia-Pacific
  • Signing up its first SAP clients, complementing its support for Oracle JDE and Siebel customers
  • Delivery of tax and regulatory updates ahead of the "primary software vendor’s planned release date for similar updates"
It's remarkable to do all this in a time of economic recession. But the recession may in fact be helping Rimini Street's business as Oracle and SAP customers are pressed to look for alternatives to inflated maintenance fees from these two vendors.

I also note Rimini Street's report of a strategic investment from private equity firm Adams Street Partners. The money will be used to fund Rimini Street's global expansion. Apart from this, however, to me this is a serious endorsment of the third-party maintenance model in general, and Rimini Street in particular. No doubt, Adam Street did their due diligence. If they came to the conclusion that third-party maintenance is a worth investment target, will others be far behind?

I hope not. I would like to see other private equity firms funding other third-party maintenance providers as well. The more the better.

Rimini Street's press release has details.

Update, July 31: Bob Evans at Information Week has an excellent article on the excessive nature of Oracle's and SAP's 22% maintenance fee practices and the door that this has opened for Rimini Street, and hopefully others. One tidbit:
Some CIOs object, usually in language most charitably described as "colorful," that because the world's two largest enterprise software companies have built such wildly successful cash cows out of their support and maintenance businesses, SAP and Oracle have completely lost sight of the customer connection in that context. Most grating of all to these CIOs have been public comments made separately by top-level executives at the two companies indicating quite explicitly that whatever customers might or might not think about the 22% fees, that revenue is indispensable to the stock valuation of each company and so cannot be changed.
This article should be required reading for any enterprise software buyer or CIO.

Related posts
Rimini Street, SAP, and the future of third-party maintenance
Rimini Street to provide third-party support for SAP
Legal basis for third-party ERP support industry

by Frank Scavo, 7/15/2009 09:10:00 AM | permalink | e-mail this!

 Reader Comments:

Frank, I have been one of Rimini's earliest and continued supporters. Not just investors I hope SW vendors wake up to the fact that it is healthy to have 3PM around them so their customers have choice. They brag about large impl ecosystems but are scared of support alternatives?

From a customer stand point Consumer Reports consistently finds independent garages do a better job and are cheaper than dealers of high end cars. Same in SW. For routine support why not let 3PM take over?

I updated Ray Wang's SW Licensee Bill of Rights to specifically allow for 3PM - and also for sw vendors to themselves offer a lighter support tier - see

http://dealarchitect.typepad.com/deal_architect/2009/07/bill-of-rights-and-other-amendments-to-the-enterprise-software-constitution.html
 
Post a Comment
 

Links to this post:


 

Powered by Blogger

(c) 2002-2016, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo, at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

My IT research firm, Computer Economics provides metrics for IT management, such as IT spending and staffing benchmarks, ROI/TCO studies, outsourcing statistics, and more.


Go to latest postings


Search the Spectator!
Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed RSS News Feed

Computer Economics
ERP Support Staffing Ratios
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report

Get these headlines on your site, free!


Awards

2014 Best Independent ERP Blog - Winner

2013 Best ERP Writer - Winner

Alltop. We're kind of a big deal.
 
Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs


Key References
Strativa: Business strategy consulting, strategic planning
Strativa: IT strategy consulting
Strativa: Business process improvement, process mapping, consultants
Strativa: IT due diligence
Strativa: ERP software selection consulting and vendor evaluation
Strativa: CRM software selection consulting and vendor evaluation
Strativa: Project management consulting, change management
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Enterprise IT News: diginomica


Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
September 2015
October 2015
November 2015
February 2016
May 2016
June 2016
July 2016
August 2016
September 2016
Latest postings