October 14, 2016 | Michelle Wilkinson | Director, Marketing
Gartner has built a powerful brand as the independent research voice in the IT space. So it comes as no surprise that the pros at Gartner have recognized third-party software support as an important force in the marketplace.
Last month, Gartner undertook a comparison of the two leaders in the field of third-party software support, Rimini Street and us at Spinnaker Support. While we both offer alternatives for SAP and Oracle clients, we do differ in many ways. For those short on time, this blog will serve as a summary of the report and will dive into some facts that didn’t make the article. For those looking to read the report in full, you can find it here.
When it comes to Oracle and SAP software support, there should be no debate about five salient points:
- Enterprise clients dislike being force-marched by a technology supplier
Hundreds of enterprises have recently asked Gartner for advice on finding a way out of pricey manufacturer contracts that too often deliver low-quality maintenance and support. They are tired of paying maintenance fees for software licenses they don’t use. These 22% in maintenance fees often run into the millions of dollars.
- There are two dominant players in the third-party support business
Both Spinnaker Support and Rimini Street deliver third-party support for SAP and Oracle enterprise applications at a significant savings, at least 50 percent, off software publishers’ maintenance fees. When you know you are unhappy with your current solution, but unsure of your next step, you need to research both vendors. Competition ensures the right support level at the best price.
- There are differences between the leading third-party vendors
There are many differences between the two providers in approach to customers, values, risk averseness, and breadth of service offerings. One of the differences that at first glance stands out in the report is that Rimini Street appears to have a substantial size advantage in terms of customer and employee count. But let’s measure apples to apples. An estimated 40% of Rimini Street’s customers run PeopleSoft, an application Spinnaker Support has chosen not to support. Many of their employees are dedicated to the support PeopleSoft products, including the huge requirement of providing tax and regulatory updates. Excluding Rimini Street’s PeopleSoft practice, Spinnaker Support owns an estimated 40% share of market.
Another difference lies in the breadth of services Spinnaker Support has chosen to offer customers. We built distinct practices for maintenance and support, managed services, and consulting because we understand the high value placed when a single vendor that can drive deeper into their operations with a broader set of cost-effective services. Well over one-third of our global clients have leveraged at least two of these major service offerings to reduce costs, advance their technology stacks, minimize vendor count, and eliminate finger pointing.
- Legal and financial risk mitigation matters to prospective adopters of third-party support
The Gartner research paper affirms that there is no legal reason why a third-party cannot provide cheaper and better support for Oracle and SAP customers. Executives from both SAP and Oracle have publicly stated that third-party support is fine as long as it is done the right way.
However, the risk is introduced when prospective third-party support adopters see news about lawsuits involving Rimini Street and Oracle. And the legal troubles between the two companies are far from over. It is public knowledge that Rimini Street now owes Oracle almost $125 million in damages, fees, and interest charges resulting from the first case. To a lesser extent it is known that there is a second legal battle underway. Couple the legal issues with the recent loan taken by Rimini Street from Colbeck for $125 million, there is some question as to whether that is actually being used for growth and expansion or to pay for their legal fees.
Increasingly more enterprises are choosing the safety and security of Spinnaker Support because risk-mitigation matters to them. Spinnaker Support has a sterling reputation for respecting and complying with the intellectual property rights of others, a built-to-last financial profile, a broader suite of services, and a strong history of customer satisfaction and loyalty.
- Third-party support brings better service for a fraction of the cost
All licensees of SAP and Oracle software pay 20-22% maintenance and support fees. As time passes, comprehensive vendor support morphs into “customer self-service.” Prices aren’t reduced though. Switching to third-party support restores comprehensive support, even adding support for customized code and embedded technology advisory services. Spinnaker Support customers average a 62% reduction in support costs versus vendor costs, in large part due to the way we align fees with actual usage. These savings are being used in a number of innovative ways, including helping fund cloud migration. Taking a “maintenance vacation” is a great way to get better support for a fraction of the cost.
Your efforts can save your company millions, money that can propel you into the next generation of ERP solutions.