While enterprise application vendors continue to relentlessly raise annual support and maintenance (S&M) fees year over year, and report ever higher S&M revenues and profit margins, some dismayed or conservative customers might consider turning to the likes of Rimini Street (http://www.riministreet.com). Such third party S&M providers are enabling, at this stage, mostly some of the disconcerted Siebel, PeopleSoft, and JD Edwards licensees that want to improve the return on their existing software investments through alternative support programs. These programs promise to significantly reduce annual support fees while eliminating forced upgrades, delivering services not available with standard vendor support, and guaranteeing a much better service-level commitment.
Moreover, given the possible taint of TomorrowNow's and SYSTIME's hidden agendas (on behalf of SAP and Oracle, respectively—see Alternative Software Support and Maintenance Options), Rimini Street remains the leading, independent (vendor-neutral) third party maintenance provider. Founded in late 2005, the company is headquartered in Las Vegas, Nevada (US), with operations in several major metropolitan cities throughout North America. Offices in Australia and New Zealand are planned for early 2007. The company is hoping to further redefine the market with its support program, which promises to enable Siebel, PeopleSoft, and JD Edwards licensees to remain on their current software releases without any required upgrades or migrations for ten years or more.
In addition to its commitment to a higher level of service, Rimini Street also strives to provide customers with an average savings of more than 50 percent in annual support fees as compared to Oracle. While more details on the offering will follow, for now, major features include up to ten years of support; application fixes; tax and regulatory updates; and, particularly attractive and differentiating, support for client-made application customizations and systems' interoperability and performance.
All the above features are available without any forced upgrades, and they are significantly cheaper compared to Oracle's annual maintenance fees. Furthermore, these standard program features will be available internationally, and will include a named, primary support engineer assigned to each client, as well as a thirty-minute engineer response time at no additional cost.
Some may note that there is quite a similarity between the value propositions of Rimini Street and TomorrowNow (for detailed information on TomorrowNow, see Alternative Software Support and Maintenance Options). The similarity is largely because of Rimini Street's founder and chief executive officer (CEO), Seth A. Ravin, and his involvement with both companies.
Essentially, whether a legacy product licensee chooses to hold steady on its current release, wants only to get additional years of return out of its existing information technology (IT) investment, or is looking for more valuable support at a significantly lower annual cost, Rimini Street and TomorrowNow offer more affordable, high-quality, and specialized S&M options to meet the current and long-term needs of such licensees.
Ravin, a former PeopleSoft vice president whose responsibilities included worldwide release support policy and special support programs, has extensive experience designing and delivering support solutions for PeopleSoft products. Consequently, Ravin has already helped over one hundred Fortune 500, mid-market, and public sector PeopleSoft licensees save tremendously on their annual support fees while enjoying more responsive levels of service and leveraging their IT investments.
Prior to founding Rimini Street, Ravin cofounded TomorrowNow support services for PeopleSoft and JD Edwards products, and served as president and chief operating officer (COO) for TomorrowNow. Ravin sold his 50 percent stake in TomorrowNow to SAP in January 2005, and retired (albeit for a short while) to pursue other entrepreneurial ventures.
For background information on users' typical problems with S&M, please see Will User Enterprises Ever Get Onto an Easy (Support and Maintenance) Street, What Is the Value Proposition of Support and Maintenance?, What Are the Support and Maintenance Options?, and Alternative Software Support and Maintenance Options.
Distinct Value Proposition
Hence, being a third incarnation, or a step up in the evolution of a service provider (that is, PeopleSoft, TomorrowNow, and Rimini Street today), and having a proven management team that combines a long track record of delivery and exclusive focus on the needs of PeopleSoft, Siebel, and JD Edwards software licensees, Rimini Street and Ravin believe they have an even more refreshing option for the underserved market.
Since its launch in the fall of 2005, Rimini Street has initially worked to build the necessary processes, tools, and infrastructure to provide an advanced support program called Rimini Street Support Services for Siebel Products. This support program has enabled a handful of Siebel 5.x, 6.x (2000), and 7.x licensees to remain on their current software releases without any required upgrades for years to come, and with significant annual savings. Rimini Street's objective was not to simply provide a more affordable S&M program to Siebel licensees, but also to offer a program that delivers the actual services clients need most for day-to-day operational success.
To achieve its goal of providing a more relevant support model with higher-value, Rimini Street has redefined enterprise software support beyond the traditional support contract items (that is, installation and upgrade process support, configuration support, application and repository fixes, and documentation fixes), especially in terms of offering the following:
- Support for client-made, mission-critical customizations—while traditional enterprise software vendor and first-generation third party support programs leave licensees uncovered by only including support for "vanilla" or non-customized software code, Rimini Street includes support coverage for client-made code customizations at no additional fee, providing a complete support coverage solution for licensees with older releases. Sure, there are certain restrictions (for example, the code has to already be working in the client's live environment), but once the customizations are put under maintenance, Rimini Street guarantees that these customizations will continue to work with whatever changes Rimini Street might introduce to the code afterwards. The firm also provides support to ensure data quality, which is an issue that occurs in the real world, and one that traditional vendor support contracts do not cover.
- Support for performance-related issues—consistent with Siebel software use in call-center environments, system performance is a critical operational requirement for Siebel licensees. Again, traditional counterpart and competitive support programs do not provide general coverage for performance tuning issues, and licensees are usually forced to hire consultants at an additional cost. Conversely, Rimini Street includes support coverage for performance-related issues at the application and technology foundation layers of client systems.
- Support for interoperability—these major enterprise systems operate in complex environments with a variety of other software and system layers, and traditional enterprise software vendors and first generation third party support programs do not include general coverage of environmental issues outside the software package. Rimini Street includes support coverage of environmental issues, and will work with other software vendor support organizations to try to diagnose and recommend solutions to complex environmental interoperability issues.
- Flexible and no-frills support terms—traditional S&M programs require prepaid or noncancelable support terms, which require significant commitments from licensees, and may not align with their IT investment strategies, budgets, or cash flow models. To assure Rimini Street clients have maximum flexibility with no long-term commitments, Rimini Street support agreements have monthly, quarterly, and annual billing options, and are cancelable at any time, for any reason, with prorated fees. Users are able to more effectively manage their maintenance programs, including eliminating maintenance for unused users, products, or licenses.
This distinctive offering was particularly bolstered by the early 2006 acquisition of a customer relationship management (CRM) and enterprise resource planning (ERP) technology consulting firm, Sidney Blue, LLC. Founded in 2002 and based in the San Francisco, California (US) area, Sidney Blue was a boutique consulting firm specializing in implementation, upgrades, and technology services for Siebel licensees with large, complex environments. The firm had earned a reputation for outstanding expertise and experience with Siebel products, providing services both directly and as a subcontractor for other vendors needing deep Siebel expertise and resources. Over the years, Sidney Blue has served the needs of many Siebel licensees, including premier clients such as Toyota Financial Services, Philips Medical, Peregrine Systems, Juniper Networks, Blue Cross Blue Shield, Restoration Hardware, and others.
Current State of Affairs
Fast-forward to today, Rimini Street's focus has expanded to provide support for PeopleSoft (in mid-2006) and JD Edwards products (in late 2006). The provider will also likely expand its offerings to SAP R/3 support down the track, owing to many reported inquiries about Rimini Street by these users. Certainly, in terms of size, Rimini Street is hardly a major threat to Oracle's maintenance revenues (nor will it be to SAP's once it begins to provide third party S&M for the vendor's products in the near future). Today, the firm employs about thirty people only and has over twenty customers. About 70 percent are Siebel customers, and the remaining 30 percent are PeopleSoft customers (given that offerings for JD Edwards customers are relatively new). Yet, although these absolute numbers are not large, the client list does include some notable, brand-name, Fortune 500 firms.
While many providers have third party S&M that will appeal mainly to small and mid-size companies looking to save some money, as it turns out, large companies have the same idea and urges. This is especially true of large companies that have heavily modified their vendors' software and have no plans to upgrade any time soon. Some of these companies are not willing to continue paying 22 percent of the nominal sales price to Oracle for product upgrades that they are not likely to ever install. Further, by having mature systems, they do not need Oracle's help desk support either.
Some vertical segments, such as retail, health care, and public sector organizations, seem to be amenable to Rimini Street's offerings—the latter especially in cases where there are significant state and local budgetary constraints. Therefore, although the provider's client base is still new and budding, the company has been quite bullish because of the accelerating demand for its service lines and because of its healthy win ratios and a solid execution of its aggressive business plan. The growing client base has been successful with Rimini Street's services, and is therefore glad to provide references and partner with the company, since Rimini Street is seen by its clients as an independent, trusted advisor and mission-critical support provider.
In addition to launching international operations in the Asia-Pacific region, another recent highlight was the company's exceptional first year in business, which culminated in the appointment of enterprise software industry veterans from Siebel, PeopleSoft, and SAP to the executive management team; the hiring of senior support professionals; launch of the three product lines; and closing of a significant number of customer contracts. Rimini Street continues to, for the time being, aggressively (albeit on "as required" bases) hire Siebel, JD Edwards, and PeopleSoft support and engineering specialists.
In addition to the above mentioned contractual items, today, all support programs for the three product lines feature the other items, most of which are not available within the original vendors' standard S&M contracts, such as
- named, US-based primary support engineers (who research and understand the user's environment for the best possible delivery) assigned to each client, which typically results in a higher level of service
- support through to 2015 and beyond for existing releases without forced upgrades
- 24x7 support coverage with 30-minute or less guaranteed response
- application fixes for serious issues and tax and regulatory updates, which are delivered specifically for the user's current release, and with no requirement to upgrade—users can apply only the fixes they need
Again, as in the case of TomorrowNow, these support programs are delivered at more than a 50 percent cost savings compared to Oracle's annual support fee. This is not counting if the user company is paying maintenance for products it has not implemented or user seats that it is not using, in which case the price might drop even further. Rimini Street points out that its offering is not for those Siebel, PeopleSoft, and JD Edwards licensees who prefer an early-adopter migration to new technology platforms. Rather, the provider's offering is for those that are choosing more conservative paths that will allow time for technology and features to mature, and time to work out any unknown operational challenges, costs, and benefits. In the meantime, these user organizations should be able to continue using currently available product releases for many years to come.
This is part one of the two-part article Is There a Street Corner for a Vendor-neutral Third Party Support and Maintenance Provider? Part two takes a look at Rimini Street's latest developments, including new product releases and recent alliances.