Oracle tormentor Rimini Street wins Gartner endorsement
More firms moving to third-party maintenance options, Gartner finds, adding that practice can support business growth
Rimini Street's claims that more end users are ripping up maintenance agreements with ERP vendors such as Oracle and SAP and moving to third-party support have been endorsed by Gartner.
Annual expenditure on ERP maintenance is one of the biggest line items in the IT budget and can run into the millions or tens of millions of dollars for customers of the larger vendors, Gartner noted in a report out this month.
Between five and 10 per cent of the install base have moved to third-party support but the number of end users exploring this option is "steadily increasing", Gartner said.
The research was flagged up in the latest PR statement from Rimini Street, which claims to have grown for 38 consecutive quarters and is currently locked in a legal battle with ERP vendor Oracle.
Seth Ravin, chief executive of Rimini Street, which provides independent support for a range of Oracle and SAP products, argued the tide is shifting in his firm's favour.
"Enterprise software licensees are struggling with the low value and poor service received from increasingly expensive vendor annual maintenance fees and this report verifies that many licensees are actively considering independent support options," Ravin said.
In the report, Gartner concluded that cancelling the ERP vendor's maintenance agreement "is not right for everyone".
"However, cancelling can play an important role in enabling an enterprise to run current mature application releases more cost-effectively, shift funds to business growth initiatives, and position itself flexibly for the best-fit future application platform," Gartner said.
It added: "The third-party market for ERP technical maintenance and support is maturing, but many ERP leaders don't understand their options for support if they cancel their ERP vendor's maintenance agreement."
Gartner said it was aware of only two providers of independent support who do so on a global basis: Rimini Street – which now claims to have 600 staff – and Spinnaker Support. Independent support is one of four support alternatives for end users considering cancelling their ERP vendor's maintenance agreement, alongside self-support, ad hoc consulting services, and global consulting services, Gartner said.
Independent support providers usually undercut the software vendor's annual maintenance fee by a half or more, Gartner said.
"Customer feedback indicates that these vendors' dedicated support teams provide more responsive service than the software vendors," it said.
"This option is best for enterprises that need highly responsive, ongoing support services, beyond the application itself, and especially for those wanting tax and regulatory updates."