Rimini Street started by Seth Ravin in 2005 with interesting concept – to change support model for enterprise applications.
To understand how well entrenched Software Support model is for Enterprise Application companies , look at below numbers.
- SAP reported 20797 MN Euros of revenue out of which 10094 MN Euros. Software support revenues grew 14 percent YOY. Only other revenue stream which grew faster than Software Support is Cloud-based subscriptions.
- Oracle reported 38226 MN $ in FY 2015 out of which Software Licenses Updates and product support contributed to 18847 MN $ .
As you can see, software support constitutes of almost 50 percent of revenue streams for large on-premise ERP system vendors.
Rimini Street launched SAP Independent Support (for SAP ECC) in 2008 and expanded to SAP Business Objects in 2013.
Here are some numbers which indicate growing acceptance of third party support in Enterprise Applications.
In 2014, Rimini Street had over 1000 clients with 42 percent net revenue growth YoY. They now claim to support 99 for Fortune 500 companies. In terms of SAP Support, they are currently servicing more than 150 clients (more than 200 applications). Almost 50 percent of the SAP applications are on SAP ECC and rest on lower versions of SAP ERP.
This is how Rimini Street’s Support model differs from traditional SAP Support.
- It allocates dedicated primary support engineer and Global account manager for every client. SAP follows three-tier support model based on support messages and can be time consuming.
- It replaces SAP’s annual maintenance (Tier 3) – including
- Break/Fix for application code
- Tax/Legal/Regulatory updates
- Customization Support
- It adopts same development tools as other system integration firms to deliver fixes.
- It also offer guaranteed 15 years support for current release of the client. Thus, it saves costs in terms of unnecessary upgrades and related maintenance.
- It works on guaranteed 30 minutes or less response time SLA.
- It supports client specific customizations/configurations.
- It offers client specific fixes instead of source code modifications as typically done by SAP via Notes/Patches.
- It also offers almost 50 percent reduction in Annual maintenance for clients.
As you can see, that it offers much more client-specific value (at half price) than traditional (fit-for-all) SAP Support model.
It would be very interesting to see how third party support model will evolve over time as customers are looking to divert investments from on-premise ERP systems to front-end technologies.
It is not going to easy for sure. Check this out.