Oracle co-President Mark Hurd weighed in on the contentious topic of third-party software maintenance at the Collaborate user group conference in Denver this week.
Some Oracle and SAP customers have turned to third-party maintenance providers such as Rimini Street in search of a cheaper alternative to Oracle’s annual fees. Oracle has sued Rimini Street, claiming it uses Oracle software illegally in the process of supporting customers.
“Our maintenance isn’t just support,” Hurd said Tuesday in response to a question from Ray Wang of Constellation Research, who was on stage hosting Hurd’s keynote. “Our objective is to provide you with perpetual rights to the software.”
New versions of Oracle’s software must be obtained through a valid support contract with Oracle, Hurd noted.
Also, there are other ways customers can save money besides turning to third-party maintenance providers, Hurd said, though he didn’t offer examples.
He did not mention that many customers who choose third-party maintenance do so because they have stable systems and aren’t interested in upgrading due to the cost and bother typically involved. Rimini and others provide tax and regulatory updates, bug fixes and support for customizations made to the software.
But Hurd did allude to Oracle’s ongoing lawsuit against Rimini Street. “Typically we don’t like people messing with our intellectual property,” he said.
Rimini has filed a counterclaim and says it acts within the boundaries of its customers’ Oracle software license rights. Oracle has already won a judgment in a similar action against SAP and its former subsidiary TomorrowNow, although the case is tied up in appeals. Rimini CEO Seth Ravin was a TomorrowNow co-founder.
Proponents of third-party support have compared the situation to a car buyer getting their repairs done at the local garage to save money, rather than at the dealership.
But Oracle and other software vendors are loath to see a vibrant market for third-party support emerge, given the high profit margins offered by maintenance contracts.
Privately held Rimini Street remains fairly small but has reported steadily growing revenue. Some customers are reportedly managing to get discounts on their vendor maintenance renewal with the help of a competitive proposal from Rimini.
The specter of litigation didn’t faze one Rimini Street customer who was on a panel Tuesday at Collaborate.
Oracle’s action against Rimini was “common knowledge” to Kimberly Griffiths, senior vice president of global technology programs at commercial real-estate services provider Jones Lang LaSalle. “I’m a big fan of not being bullied,” and if anything drastic occurs as a result of the court case, her company could revert back to Oracle support, she said.
But Griffiths confessed to being “very nervous” before inking a contract with Rimini Street. “I wasn’t against it, but I can’t say I was in favor of it,” she said. However, “for me I looked at what we were paying in native vendor support and the value wasn’t there.”
Griffiths rationalized that if she saved 50 percent off her JD Edwards support bill by going with Rimini Street and ended up with the same level of service, at least Jones Lang LaSalle would be saving money.
But Rimini’s service “exceeded my expectations on so many levels,” Griffiths said. “That’s why I’m here today.”
Bugs are getting fixed faster and Rimini stays on top of needed tax and regulatory updates for the software when countries change local laws, she said. Technicians have even been helpful with infrastructure-level issues that fall outside the core application, according to Griffiths.
However, Jones Lang LaSalle will probably end up back with Oracle at some point, when Oracle’s software evolves enough to warrant an upgrade, she said.