Rimini Street's managing director for Asia Pacific and Middle East Andrew Powell told iTWire that his company has recently received an unusually large number of applications from former Oracle support staff, lending credence to the report that Oracle's Australian support centre has been closed.
Powell said the Oracle customers he talks to want access to highly skilled onshore support staff, and onshore support is highly valued in certain parts of the market such as the public service.
Since Oracle products have been widely used in Australia for many years, there are plenty of very experienced people in the industry. Rimini Street requires its support staff to have at least 10 years of product experience, and the average in Australia is 15 years: "We're not asking our customers to deal with graduates."
Rimini Street just revealed that NSW electricity transmission provider TransGrid moved its Oracle Database support to the company in 2014. The transition took about six weeks, and "not only do we save money by switching to independent support, we also receive superior service and access to local experts on Oracle Database and software," said TransGrid planning and architecture manager Michael Milne.
Globally, Rimini Street has a 30-40% CAGR, and in Asia Pacific the figure is "closer to 80 to 100%," said Powell.
"More and more organisations are questioning the value of paying for annual maintenance [from vendors]," he said. In particular, boards increasingly doubt the value of software upgrades, especially when they are forced on the business as a condition of the vendor's support contract, and would rather 'sweat the asset' of a perpetual licence.
Based on Oracle's published results, the company enjoys a 93.7% margin on licence updates and product support, Powell said, and suggested that the reduction in Australian staff was to support that level of margin.
But that degree of profitability means Rimini Street and similar businesses are able to provide better service at lower prices, he claimed. The company supports customisations as well as the basic products.
Powell said Rimini Street has "a very simple pricing model": 50% of Oracle's or SAP's charges. And by avoiding forced upgrades, the five-year TCO can be reduced by 150% of the current support fees. For example, one customer saved $2 million a year by moving to Rimini Street and also avoided a $15 million upgrade.
Losing access to security patches is not an issue in most cases. Organisations in the defence and other security-sensitive sectors are "comfortable" with their IT security under the Rimini Street support model, he said. "Robust solutions are available" that don't require vendors' security patches, and in many cases organisations do not bother applying such patches because they protect against vulnerabilities that have been public knowledge for up to 18 months.
"We are genuinely changing the market," Powell told iTWire. "The days of blindly paying vendor maintenance each year... are rapidly drawing to an end."