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November 20, 2015

Rimini Street CEO: Taking the software ‘golden goose’ from SAP & Oracle

Exclusive CEO briefing: Seth Ravin, CEO Rimini Street, on competing with SAP and Oracle to offer lower software maintenance and support costs.

By James Nunns

Rimini Street is an independent software support company that offers services for software from companies such as SAP, Oracle, and its subsidiaries Siebel and PeopleSoft.

Since 2010 it has been locked in legal battles with Oracle regarding copyright infringement.

October 2015 saw the end of a five year legal battle which saw Oracle being awarded $50 million from Rimini Street by a Las Vegas court in relation to claims that Rimini Street had benefited from illegal downloading and storing of Oracle software and support and software documents

While Oracle is now pursuing an injunction against Rimini Street (company statement), both sides claimed some victory.

Oracle is feeling vindicated because of the award against Rimini Street.

Rimini Street issued a statement saying the judge and jury had rejectged Oracle’s claim for $246m and concluded that it could continue to sell thrid party maintenance contracts.

CEO Seth Ravin,Ravin says that Rimini Street gives end user companies a way to buy up to ten years on their existing platform in order to maximise their return on investment while they decide what their next platform will be.

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The company says that it can offer support and maintenance costs at 50% less than what SAP and Oracle charges customers and that it has over 1000 customers.

Asked whether this makes them unpopular, Ravin, said: "I would say that the software vendors don’t enjoy it. We’re certainly adding a level of competition where they traditionally drive close to 90% gross margins – this is the golden goose for the software companies."

According to Ravin this makes them a threat to the status quo, which is forcing the likes of Oracle and SAP into a defensive posture.

"So in many ways the vendors are in a completely defensive posture, their goal is to hold on to as much as they can with everybody trying to take a piece of their business," said Ravin.

While legacy systems have been given a bad name as something that reduces agility, his company is making it so that customers don’t need to switch to newer cloud software until it suits them.

Ravin says that this helps companies to: "Re-allocate the extra spend which would normally be going in Oracle or SAP’s pocket back in to their own existing environments."

So it may not be necessary to immediately transition from traditional software to cloud software, Rimini Street focuses on getting more functionality out of the existing system.

Ravin also says that cloud may not be as good a fit as it is pitched. "They’re not nearly as robust as the current on premise systems," said Ravin.

"From our customer perspective a lot of the cloud offerings are far too simple and not nearly robust enough functionally yet to even seriously consider for deployment."

Explaining this, he went on to say that due to the highly customised nature of the systems that have been built around operations, it is not easy to match up those needs with a, "more generic cloud offering."

Although he says that some vendors will try to adjust their systems a little to fit the customer, it is a very difficult proposition.

The problem particularly lies with supply chain and manufacturing, segments that tend to be extremely customised.

Citing Toyota North America as a customer, Ravin says that they are very complex systems that would potentially take years of work and hundreds of millions of dollars to replace.

"There’s no need for it, the systems are working and they are working well."

It’s not the backbone systems that companies are looking at to change, instead it is the dynamic front-end where they want to interface with customers.

Ravin looks at it like driving a car until you’ve used up its useful life, believing that the money it can potentially save customers can be better used re-investing in other technologies.

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