Rimini Street is the leading global provider of third party support services for Oracle and SAP enterprise application software. Today, we serve 525 organizations doing billions of (dollars/euros) of transactions in more than 70 countries. Rimini Street support REPLACES your current annual vendor support at more than a 50% ANNUAL SAVINGS and also provides MORE RESPONSIVE SERVICE and SEVERAL ADDITIONAL SUPPORT FEATURES. Just as you have a choice of vendors from whom you can purchase your implementation, customization, training, and upgrade services, Rimini Street provides software licensees a choice of annual support vendors and programs. Analogy: (Car Dealer and service analogy if appropriate…taking your car to your local mechanic vs the dealer…your choice. Same for software.) I would also like to point out that annual support is “just another product” from the software vendor that you can choose whether or not to purchase every year. The annual support is completely separate from your perpetual license agreement that gives you the rights to use your software. This means you can continue using your software regardless of whether or not you purchase annual support from the software vendor. So, instead of automatically renewing your costly annual support with the software vendor, you would instead switch your support contract to Rimini Street. Going forward, you would get all the support you need such as break/fix support, tax, legal and regulatory updates, and 24/7/365 phone support from Rimini Street rather than the software vendor. You will no longer have any reliance on the software vendor for support, and you will no longer have to abide by their mandatory upgrade requirements and support policies I will go into more detail about our overall support features and the differences from the vendor’s support program in just a moment. From a pricing perspective, as I noted, we provide our support at a minimum 50% annual savings from what you are paying the softwarevendor today. However, because our support model is very different from the vendor’s, our clients can achieve a total cost of ownership savings of up to 90% over a decade.
Rimini Street replaces your Oracle or SAP annual support with a more responsive support program built specifically for today’s mature, customized enterprise software. And we do this at a 50% savings compared to what you pay Oracle or SAP today. The savings and value we helped bring to the Fortune manufacturer on the prior slide, which is representative of the savings and value we bring all our clients, are key reasons Rimini Street has grown quickly since its founding 8 years ago in 2005.• Our executive team is credited with creating the third party enterprise software support industry. We’re acknowledged as visionaries who continue to innovate the space. All of our executives have 20+ years of experience in the technology industry, and we are one of the world’s most experienced teams in the design, sale and delivery of enterprise software support. • Today, we offer 7 product lines: Oracle’s Siebel, PeopleSoft, JD Edwards, Oracle E-Business Suite, Oracle Database and Hyperion products and nearly all of SAP’s product lines from 4.x to ECC 6 • We have operations throughout the US and Canada, UK and Australia. Additionally, we have new offices in Amsterdam, Munich, Singapore, and Brazil. • We have experienced phenomenal growth since inception. Now have nearly 525 clientsWe continue to set records each quarter with our performance, in fact, we’ve increased our revenue every quarter in our historyWe have $500M in sales backlog and had a 130% increase in sales bookings in 2011• Rimini Street has a 99% client satisfaction rate and has very high employee satisfaction as well. • We are recognized as the leading 3rd party support provider by top industry analysts like Gartner and are regularly featured in leading publications like the Wall Street Journal, The Financial Times, Barrons, and many others.
Hundreds of Global, Fortune 500, Mid-Market & Public Sector Clients6 Major Product Lines – SAP, PeopleSoft, Siebel, JDE, Oracle EBS, Oracle DatabaseGlobal Service ProvisionAnnual Renewal Rates Over 90 Percent
That Total Cost of Maintenance contributes to what is really the big problem that has to be addressed by IT and Finance executives. A very recent Gartner report states that 80% of IT budgets go to “keeping the lights on,” leaving only 20% for new initiatives.There are cuts happening everywhere in our lives including the Federal Government and yet the HW and SW companies didn’t get the memo.The overall size of the pie is shrinking, but your maintenance costs are fixed, so new initiatives and people are getting cutThe problem is that if you don’t do anything about this, you won’t be helping the company innovate, drive competitive advantage and meet the company goals…
Now let’s talk about how your enterprise software world has changed. Ray hit on a few of these points in his presentation but I think it’s important to summarize how the current state of ERP has changed. Full-featured Stable Software-Today’s software is mature stable and more than meets your needs-Every possible feature and function built in-Back in the 90s when I was at PS, needed next release just to complete biz processes and get sw that actually worked-Today, incremental releases add very little value, in fact, most customers are over-softwaredCostly Forced upgrades-Mature software and low value upgrades, clients don’t want or need to upgrade-vendor support timelines force customers to upgrade to stay supported, but there is no ROI-These forced upgrades are huge cost, distraction, resource strain and risk – and don’t add valueLack of Innovation-One of the reasons upgrades don’t add value is that Oracle and SAP are not innovating at the pace we would all like, they are at the trailing edge of the innovation curve-Innovation is coming from smaller, more agile vendors providing SaaS, mobile, BI, and other innovations-Look at SRM and eProcurement, if you had waited for ERP providers, you would have waited ten years for a viable solution, or you could have saved millions a year with a solution like AribaExpensive, Low-value maintenance fees-Despite not getting value from upgrades or innovation, the ERP model is to keep paying very expensive maintenance fees-92% margins, huge profits for Oracle and SAP, but little value in return-Anything new is often packaged into a module that you have to license anyway!Service Dissatisfaction-This is why a majority of ERP customers are dissatisfied with the service and value of vendor annual support-Expensive, but I’m not getting any competitive advantage or ROI-When sw was immature, needed to get continuous bug fixes… but in today’s stable mature environment I don’t see the value for my spend.Service Irrelevance-And to take it a step further, Oracle and SAP support is really IRRELEVANT for today’s mature enterprise software-65% of all issues we receive, and 85% of P1 isssues, are related to customized code – Code the vendor doesn’t even support!So if you compare the enterprise software world today with when you originally licensed your software, the world is dramatically different. Yet the business model and software support models from Oracle and SAP haven’t changed in any meaningful way – except that they have raised prices to a full 22% of your license fees.
What’s worse, is that Oracle and SAP support don’t even address the majority of issues customer like you have with their ERP systems.This may be the most important slide in the whole deck and will certainly raise some eyebrows out there. A full 85% of all Priority 1 Production Down problems occur on custom code and Oracle and SAP do NOT support custom code.Those that think they have a “great insurance policy” with Oracle and SAP support should dig deeper and see what they really have.
Like the automotive services industry cartel that taught us to change our oil every 3,000 miles, there is a thriving “cartel” doing the same thing in your IT organizations. And they are not just the software vendors, but the hardware vendors and systems integrators as well. Why? Because they have to answer to Wall Street. Wall Street expects greater and greater profit every quarter and one way to make that happen is to force all of you to upgrade to new hardware or software, with or without a business reason to do so.Think about this for a minute: How does this “cartel” make their money? The only way they make their money is when CHANGE happens in your environment. In this case, change isn’t a simple oil change, it’s the constant churn of ERP upgrades just to stay supported, and all the related overhead inherent in today’s ERP maintenance model. The problem is “we are changing for the sake of change way too often” and not making investments that move our companies forward. We are spending money to “keep the lights on” instead of investing in innovation – the innovations that Ray spoke about in Mobile, Social, Cloud, Big Data, and Video – and the innovations that our business units are demanding to differentiate ourselves in our industries. This “cartel” is preaching the gospel of change as a way to keep their coffers full, and they too are fully aware of the feature rich 20-30 year old mature enterprise software in your organizations. Software that is so feature rich already that any new release rarely adds to your company’s top-line revenue or reduces your bottom line expenses. In fact the exact opposite happens. Expenses are increased significantly without increasing competitive advantage for your company.I use the word “Cartel” somewhat to over-exaggerate what is happening in the enterprise today. Many of these Hardware Vendors and Systems Integrators are great companies and deliver great products and services but they are “complicit” in what is going on today and they have a “responsibility,” as you all do, to be good stewards of your company’s precious IT dollars. They need to change their ways in this area and companies like Rimini Street and many industry analysts like Ray, and Gartner, and Forrester are shining a BIG, BRIGHT LIGHT on this unnecessary spend.Why is this important? Because poor company management could lead to layoffs, poor company performance, and eventual bankruptcy. Since 2008, many once great companies, in fact household names, went bankrupt including General Motors, Chrysler, American Airlines, Lehman Brothers, Washington Mutual, Borders Books, Blockbuster, Circuit City, and many more. Business bankruptcies were three times higher in 2009 than they were in 2006.This is a real issue that needs real oversight and the “new” CFOs and CIOs are demanding this accountability today before approving any unnecessary projects.
So let’s sum up what is really needed in today’s support models. What you need, what the industry needs, is a new approach to how we support and maintain our ERP systems, and how we manage our ERP roadmap and strategy. We need to shift from vendor centric to client-centric We need to have fair profit margins We need a model that supports custom code We need Engineers with 10 – 20 years experience at client sites and not just “book trained low-level resources” We need to be able to upgrade on timelines that make sense for our businesses We need to realize that innovation comes from a multitude of different vendors and that we must have the flexibility to make our own choices.With that, let’s open it up for questions and thank you all very much for attending our Webinar today. We hope the information was useful.
As I mentioned earlier, Rimini Street Support REPLACES the higher-cost annual support you pay the software vendor for today. However, in addition to the minimum 50% annual savings, we provide a MORE RESPONSIVE, premium level of service and SEVERAL ADDITIONAL SERVICE FEATURES not included with the vendor’s standard annual support program. Our program is different than the software vendor’s program. We like to say that our program “provides you everything you need and nothing you don't.” Rimini Street support includes all the key support features you get today from the software vendor and expect from any support vendor and program, such as: • Diagnostics • Break/fix support • Fixes, patches, and workarounds for your applications • 24 x 7 x 365 support for urgent issues However, Rimini Street goes much further than those key features. We also provide the following additional standard support features at no additional charge: • Every client is assigned a named, Primary Support Engineer, or PSE, to be your primary support contact. Unlike the vendor with whom you call into a call center and are routed to a different, book-trained, front-line call technician, with Rimini Street your team will call directly into an assigned senior level, experienced engineer. Rimini Street only has senior engineers and does not use a “tiered” call center model at all. This results in having senior engineers who are knowledgeable about the systems they support and who will begin working urgent issues in an average of 3.5 minutes from the time a case is opened by a client. Rimini Street’s engineers have an average of 10+ years experience in the field performing installations, implementations, configurations, upgrades, migrations, and system support. Many of these individuals have come from the software vendors and the Big 4 consulting firms like Accenture, so they are very experienced individuals who have been out in the field solving customers’ technical and functional challenges. Our PSEs are also surrounded by a team of senior functional and technical specialists who also average 10+ years experience. Together, they form the client’s technical and functional support team. • We have a 30 minute guaranteed SLA 24 x 7 x 365 for a senior engineer to begin working an urgent issue. During the business day, Rimini Street targets a 90% live call answering by each client’s assigned Primary Support Engineer. The 30 minute guaranteed response would cover any calls not answered live. Although we have the 30 minute SLA, our ACTUAL response time averages just 3.5 minutes for a senior engineer 24 x7 anywhere in the world. That is faster than you can probably navigate either Oracle’s or SAP’s hotline phone tree! • We have the most comprehensive tax, legal and regulatory support in the industry. Rimini Street offers employment, transaction, and financial regulatory support for all 190 U.N.-recognized countries. Oracle and SAP each only offer a fraction of that coverage. We continue to invest heavily in our Tax, Legal and Regulatory organization and capability, and view our program as a true differentiator: • The organization is run by the former Managing Partner of PwC’s Global Tax practice and staffed with career tax specialists and lawyers schooled at institutions such as the London School of Economics. • To date, we have delivered over 45,000 tax, legal and regulatory updates to our clients operating in more than 70 countries. • We historically deliver updates on average a few days before the software vendor’s equivalent updates. • The updates are packaged and installed similar to what your teams are used to receiving today, and no new skills or processes are required to install our updates. Hundreds of companies already use our tax, legal and regulatory updates to process millions of paychecks and billions of (dollars/euros) of transactions. In fact, even the most respected “tax guys,” like HR Block and CCH get their tax updates from Rimini Street! • We will support your current application release for a minimum of 10 years from initial contract date. Rimini Street support includes all tax, legal and regulatory support to keep your release operating smoothly in compliance. On the other hand, Oracle and SAP require significant minor and major application maintenance updates to be installed over the years in order to remain eligible to receive support. • We will support your client-made customizations. The software vendors only support the uncustomized code they deliver to clients. They will not provide support for any changes to the code made by the client. Rimini Street, on the other hand, will provide support for ALL application code – including client-made customizations – at the SAME SLA commitment and at no additional cost to the client. [Gartner, Forrester and other analysts note this as a hugely popular and unique feature of Rimini Street support that our clients rave about.] • We will provide you interoperability support to ensure your overall environment remains stable and works appropriately with your applications. Rimini Street is a member of TSANet, an organization that allows over 100 technology companies like Rimini Street, IBM, and Microsoft to work directly with each other to solve interoperability issues for their mutual clients. • We will assist you with performance tuning. Over time, all systems tend to process more data and increases in data can lead to various performance challenges in transaction processing and report generation. If processing or reporting functions show degrading performance, Rimini Street engineers will work with your support team and provide recommendations for improving performance. And lastly, but not any less important: • We will provide you an assigned account manager to ensure a smooth transition to Rimini Street and long-term success and satisfaction with the service. This resource is in addition to your assigned PSE. Rimini Street Account Managers have an average of 15+ years experience with system implementations, upgrades and migrations. AM’s will work with each client on their mid and long-term system strategies and challenges, and assure that clients get maximum benefit out of their Rimini Street support.
SAVINGS DETAIL:FEES – RETAIL will cut their annual support fees by at least 50% and save nearly $600,000 every year, and this doesn’t include the savings by avoiding annual increases from Oracle.UPGRADES – The upgrade savings is $490,909 annually. (This is an annualized cost based on an upgrade every 5 years costing $2.5M in 5 years. RETAIL would be forced into an immediate upgrade since 8.8 is on “sustaining” support and RETAIL will no longer get tax and regulatory updates). CUSTOMIZATIONS – Customization savings total $399,600 per year. 65% of Rimini Street cases involve non-vanilla code and over 80% of P1 cases are issues that contain customizations. Oracle will not address any case of non-vanilla code.MAINTENANCE RESOURCES – Savings from these efficiencies adds up to $327,600 per yearThat is a total of $1,818,109 in savings each year for a company paying roughly $1.2M in annual support fees.
Purpose and Intent: Constellation Research recently conducted a survey to identify the impact of third-party maintenance (3PM) providers on maintenance contract negotiations for Oracle and SAP customers. Executive Summary: In the first quarter of 2013, Constellation surveyed 184 organizations with maintenance contracts from Oracle or SAP; the purpose was to see what impact third-party maintenance has on contracts from the original software vendors. In the 184 organizations, 149 respondents actively negotiated software license contracts and recognized the availability of 3PM options. Based on the survey results and hands-on experience in assisting clients with contract negotiations, Constellation believes third-party maintenance plays a key role in providing pricing leverage and options in overall apps and contract negotiations strategy. While not a statistically significant sample size, these market leader and fast follower respondents, who secured a proposal from a third-party maintenance provider when evaluating all maintenance options, on average received a 13.7 percent discount on maintenance if they chose to renew with the software vendor. Respondents who chose to switch to a third-party support provider saved up to 50 percent off Oracle’s and SAP’s list prices for maintenance fees. Report Highlights:Third-Party Maintenance Creates Counter-Balance and Choice for Oracle and SAP Customers Oracle and SAP customers, fortunately, have third-party maintenance (3PM) options for their software portfolios. While, third-party maintenance providers do not provide new features, they do deliver regulatory updates, tax updates, bug fixes and performance enhancements at reduced rate. Often, the fees can be as low as half the cost of original vendor-provided maintenance. The advent of third-party maintenance providers creates choice in a highly-consolidated and increasingly non-competitive market. Constellation’s recent survey sought to identify the impact of third-party maintenance providers on maintenance contract negotiations with Oracle and SAP. The Oracle and SAP maintenance survey identified 149 respondents who were aware of 3PM out of 184 who played a role in Oracle or SAP maintenance contract negotiations. Of the 149 respondents actively involved in Oracle or SAP contract negotiations, the results show the following: Awareness of third-party maintenance options remains high. More than 79.2 percent of respondents indicated general awareness of an option to receive maintenance from a provider other than the software vendor (See Figure 1). Once thought of as a novelty, third-party maintenance options continue to grow in the overall apps strategy for customers. More than half used a competitive proposal in negotiating deals. Over half of respondents (51.7 percent) had applied a competitive proposal from a third-party maintenance provider to a deal (See Figure 2). As customers explore 3PM options, they will increasingly use a competitive proposal in contract negotiations, regardless of whether the customer chooses ro remain with the software vendor or switch to a third-party provider. Over 60 percent of organizations believed that third-party maintenance improved negotiation leverage. For 62.3 percent of respondents, growing awareness of options has led to some price pressures on vendors in contract negotiations (See Figure 3). The availability of options has provided much-needed competition in a traditionally captive market for software vendors. A majority of respondents found using a competitive quote effective in contract negotiation. Competitive quotes provided 71.9 percent of customers with an advantage in contract negotiations (See Figure 4). In fact, for those customers choosing to remain with the software vendor for support, deeper conversations revealed reductions in maintenance fees ranging from 5 percent to 25 percent off Oracle and SAP list prices. Respondents who secured a proposal from a third-party maintenance provider on average received a 13.7 percent discount on annual vendor maintenance fees. More than 70 percent stayed with the original vendor for maintenance and support. Most respondents remained with their software vendor for convenience and for relationship reasons. However, nearly 30 percent moved their maintenance and support to 3PM providers in order to upgrade, modernize or support a two-tier Enterprises Resources Planning (ERP) strategy.
Sebastian Grady, President & COO at Rimini Street - How to Cut Oracle and SAP Maintenance Costs by 50% with Third-Party Support
How to Cut Oracle and SAP Maintenance Costs by 50%with Third-Party SupportThe CIO EventWhittlebury Hall19th March 2013