Oracle's IP lawsuit foe: We'll fight SAP tooth and nail in Europe

ERP vendors are being attacked by the cloud and are now at the core of thier maintenance business by new comers. Aivars Lode avantce

By | Gavin Clarke 25th June 2014 08:04

Oracle's IP lawsuit foe: We'll fight SAP tooth and nail in Europe

Rimini Street: We'll have your large and mid-sized customers off you, ta

Rimini Street, the fast-growing business software support specialist currently fighting Larry Ellison’s database giant in US courts, appears to have SAP in its sights in Europe.

“Look out SAP,” Rimini Street chief executive Seth Ravin warned the giant in a recent interview with The Reg.

“We are going to fight them tooth and nail on these large and mid-sized companies,” he continued.

It’s the opening shot of a new campaign that will formally get under way next week with the opening of brand new offices in London, at Canary Wharf.

The UK features strongly in the global growth plans of a company that claims to provide service and support to SAP customers for half the price charged by the software giant.

Discounted pricing has helped push Rimini towards revenue increases of 40 per cent a quarter.

The United States accounts for 80 per cent of that, but the CEO’s plan is to decrease reliance on the US by expanding the global share of the pie from from 20 to 40 per cent.

The UK and Europe – the latter the backyard of SAP, which is based in Waldorf, Germany - are going to be big chunks of that total 40 per cent, Ravin promised.

“It’s a brutal battle – breaking open any new market is a tough play.”

Can you ever uncouple from the biz who does your support and upgrades?

Rimini Street is putting corporate noses out of joint in this battle for ERP wallets and minds – and SAP and Oracle are twitchy. Ravin’s company threatens a fundamental and increasingly vital piece of their business – support and upgrades.

Rimini Street specialises in making and delivering updates and fixes for SAP and Oracle enterprise resource planning (ERP).

SAP and Oracle already provide this support, but Rimini claims to undercut them by 50 per cent on an annual basis. That’s a problem for SAP and Oracle because support has become a critical component of their businesses as sales of new versions of their software has slowed to a single-figure limp.

Support for SAP software accounted for the $18.8b (€13.9bn) of the company’s total revenue stream of $22.8bn (€16.8bn) in 2013.

Support was Oracle’s second largest business line during its most recent year - $18bn out for $38.2bn, accounting for 47 per cent of all the money it made.

Oracle, which reported its full year last week, wasmauled by investors for – yet again - missing their expectations.

Rimini Street is still small fry by comparison – only just heading towards $100m in revenue, according to Ravin. But what’s important is that once Rimini has customers, it has them for life, and keeps them signed up and updated.

But this isn’t about price alone.

Rimini’s ongoing development work sees it deliver updates and fixes for customers that allows them to prolong the life of crucial ERP systems rather than get forced to upgrade to a new versions because Oracle and SAP no longer support their version.

ERP is a knobbly piece of software and Rimini Street keeps all kinds of updates coming for SAP, Oracle, Siebel PeopleSoft and JDE (owned by Oracle) on the finer details of tax, legal and regulatory changes plus the standard compatibilities with other companies’ software and hardware as they change – as part of the service.

Ravin points to a recent Cobol compiler for PeopleSoft developed and delivered with IBM. He says that Rimini Street delivers the IBM/PeopleSoft Cobol compiler (combined with a Rimini pre-compiler) – for free but claims that Oracle charges a licence fee of $25,000 (PER YEAR?).

Also, there’s customer service: Ravin claims a 30-minute response time on urgent issues with a dedicated primary support engineer for each account.

“We are spending a good deal of money on the technologies because it’s a part of the overall solution and it makes us very sticky,” Ravin claimed.

“[Oracle and SAP] want you to spend money on upgrading because that’s the only way they make money. We are the only guys who come to us and say: 'You don’t need to spend a penny'. So it gives us a very different relationship with the customer.”

Oracle in the US had had enough by January 2010. It struck out at Rimini Street, taking the company to court alleging “massive theft” of Oracle software and support materials had taken place through Remini's work supporting Oracle ERP customers.

What's emerged since then is an effort by Larry Ellison's company to protect the entire support business – not just on ERP. In 2013, Oracle accused independent Solaris fix-it companies Terix and Maintech of stealing its copyrighted code in supporting customers’ Oracle servers. All the cases are ongoing.

But while Oracle might be miffed, its users aren’t.

Since Oracle chose to take on Rimini Street in the courts, Ravin reckons customers have been voting with their chequebooks: he claims Rimini Street has grown in size between six to seven times since Oracle fired the first shot in its legal war.

Already in the UK with 30 employees, it has 400 worldwide, Rimini Street claims a growing number of local names that include Jaffa Cakes and Jacobs’ crackers maker United Biscuits as well as supermarket chain Sainsbury's. Overall, Rimini Street claims nearly 900 customers worldwide in the Fortune 500 and in the public sector.

Born during Y2K

A former head of worldwide support policy for PeopleSoft, Ravin said he saw the opportunity in providing such customers extended support during the rush to replace systems ahead of Y2K. He founded Rimini Street in 2005.

Expanding in the UK and Europe will mean even more clashes with Oracle and particularly SAP, given its based in Germany. Already, Ravin claims to have already snatched Germany's flag-carrying telco Deutsche Telekom from its ERP masters.

“SAP hates us with a passion... but we do have the ability to talk to SAP,” Ravin said. He admits to a frosty working relationship.

“We have a structure set up with our lawyers and their lawyers to talk.”

Ravin sees Rimini Street as disrupting the all-powerful giant support businesses owned and operated by SAP and Oracle.

Legal fights, midnight phone calls and bare-knuckle customer fights with SAP and Oracle don’t seem to bother Ravin. Rather, he seems to be more concerned by the potential threat posed by other companies similar to Rimini Street appearing to take business.

The UK and Europe expansion should be seen as a way of setting down boundaries and signing up sticky customers before others get in on the act.

“We know on the other side of the litigation when we win we will have a good 10-15 companies jump in, so our goal is to be a global player in every market,” he said. ®