What recession? Oracle support provider quadrupled its customer base

In a year when a lot of other companies floundered, Rimini Street, Inc. -- a services provider for PeopleSoft and other Oracle-owned software products -- picked up 150 new business customers in 2008, four times its 2007 number.

How did Rimini Street pull off that feat? A "significant number" of new customers came to Rimini from Tomorrow Now (TN), a SAP business unit which disbanded last year in the wake of an acrimonious lawsuit with Oracle. But other customers, fed up with Oracle's high software maintenance and upgrade fees, migrated to Rimini directly from Oracle, said David Rowe, Rimini's senior VP of global partnerships and alliances, in an interview this week with Betanews.

Founded in 2005 by ex-TN executive Seth Ravin, Rimini has seen its sales bookings mushroom from $1 million in 2006, to $9 million in 2007, to $86 million in 2008, according to Rowe. Sales bookings for multi-year contracts are counted according to when they get signed.

The year 2009 could shape up into a lucrative one for Rimini Street, too. The third-party services provider is now launching a SAP practice, adding to its existing practices for disaffected users of Oracle's PeopleSoft, JD Edwards, and Siebel CRM, ERP, and sales automation software. Sales bookings for the new SAP practice aren't even included in the company's 2008 numbers, Rowe noted.

SAP originally purchased TN back in 2005, using the business unit to provide customer support for both its own software and products garnered by major rival Oracle Corp. through a string of buyouts.

But in mid-2007, SAP admitted that members of its TN unit had improperly downloaded materials from Oracle's Web site by posing as Oracle customers. By November of that year, SAP announced that several of TN's top executives had resigned, including Andrew Nelson, its CEO and founder.

After trying fruitlessly to sell TN, SAP pulled the plug on the unit in October of 2008, giving TN's remaining customers just two or three months to "find a new home" for software maintenance and support, according to Rowe.

Rimini Street inked some TN customers even in 2007, Rowe said, during an earlier interview. But a lot more came on board in 2008, particularly at the end of the year, the senior vice president told Betanews this week.

In any case, the market is ripe right now for third-party maintenance and support, according to Rowe. With budgets strained from the economic crisis, fewer customers than ever are willing to fork over Oracle's software maintenance fees, which amount to 22% of the cost of software licenses, he said.

Users also tend to be less interested in costly upgrades by Oracle to solutions aimed at providing better integration with Oracle's own brand of applications and middleware.

Many businesses want to maintain their existing investments in Peoplesoft, JD Edwards, and Siebel software and customizations for the next five or even ten years, contended Rowe. "At that point, they might look at SaaS solutions like Workday or NetSuite, once these things are widely deployed and more mature," he conceded.

SAP, too, is now charging maintenance fees of 22%, up from its previous level of 17%, according to Rowe. "But their timing isn't good. It's terrible," he added.

As for its own new SAP practice, Rimini Street isn't targeting customers of the German-based software vendor that are based overseas.

The third-party provider is taking its time, starting out right now with a small group of reference customers. "Customers are giving you their mission-critical systems. You need to make sure you get it right," Betanews was told.

But Rowe claimed that Rimini Street already has a growing waiting list of potential SAP customers. "We have a methodology for building third-party support, and we connect that methodology with specific applications. We're building a support program for SAP now, for full roll-out later this year," he elaborated.

Author: Jacqueline Emigh @ www.betanews.com

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