Oracle Files Suit Against Low Cost Maintenance Provider Rimini Street
A short 11 months ago on March 15, 2009 I posted an article in this Blog entitled Oracle Maintenance Fees Under Attack. At the time we, as a nation, were (and arguably still are) in the worst recession since the Great Depression on the 1930’s. The installed customer base of many of the large ERP vendors, as well as, prospective customers were all searching for a way to cut costs. The larger ERP vendors, in particular Oracle, soon to be followed by SAP, had raised their annual maintenance fees to 22%. One solution highlighted in the March ’09 posting was to take advantage of the services being offered through the third party maintenance provider, Rimini Street. Claims of 70% savings on an overall maintenance bill and 50% savings on the annual maintenance expense were being made by Rimini Street’s CEO, Seth Ravin, see May 8, 2008 posting this Blog entitled SAP Sapphire 2008.
Now here’s where it gets a bit convoluted. Seth Ravin is co-founder of a company called TomorrowNow. TomorrowNow touted its ability as a third party maintenance provider and the savings it could provide to the Oracle installed base. SAP purchased TomorrowNow in January 2005 and Ravin used those profits to start Rimini Street in September of that same year. It is of particular interest and can shed some light on the attitudes and approaches of those involved in this mix if you read Richard Adhikari’s article entitled Rimini Street Adds SAP, Passes on TomorrowNow cited in my May ’08 Blog posting. In particular pay close attention to the following subsection entitled Who needs TomorrowNow? Here is a brief snip-it:
“While Rimini Street is gearing up to add new support offerings to the mix, one way it's not planning to expand its business is through acquiring TomorrowNow.
Rimini Street had at one time been widely viewed as a likely purchaser of the firm, a provider of third-party support for Oracle applications that had been co-founded by Ravin. He ultimately sold the firm to SAP in 2005.
Rimini Street executives shrugged off their decision.
‘We don't have to buy TomorrowNow because we're getting all their customers already and there's no sense in paying for it,’ Ravin said.”
Then in 2007 Oracle sues SAP, claiming that its new business unit TomorrowNow illegally obtained Oracle copyrighted maintenance materials by using customer log-in ID’s on its password protected web-site.
This all brings us to the latest in this soap-opera which comes to us from Reuters via Internetnews.com’s article entitled Oracle Sues Rimini Street:
Oracle has filed a suit against a little known rival that provides low-cost software maintenance services, in a case similar to one that Oracle is fighting against rival SAP AG.
The lawsuit, filed in U.S. district court in Nevada on Monday, alleges that privately held Rimini Street stole copyrighted material using the online access codes of Oracle (NASDAQ: ORCL) customers.
Rimini Street Chief Executive Seth Ravin denied the allegations, saying in an interview on Thursday that his company had done nothing wrong.
"We are going to fight this battle," he said. "The specific allegations we are going to be answering vigorously and aggressively when the time comes in court."
Las Vegas-based Rimini Street sells updates and bug-fixes to Oracle's software for about half of what Oracle charges its customers. Ravin said his company booked about $150 million in business last year.
The charges are similar to claims that Oracle made in a high-profile lawsuit against SAP's TomorrowNow business unit.
That case is due to go to trial in San Francisco federal court in November.
Maintenance service contracts worth billions
Maintenance services are one of Oracle's core profit generators. That business generated $11.8 billion in its most recent fiscal year, or about half Oracle's total revenue.
"We are committed to enforcing our intellectual property rights against those who steal or infringe" upon them, Oracle spokeswoman Deborah Hellinger said in a statement.
Copyright 2010 Reuters. Click for restrictions.
For additional information and more on this saga see also Paul McDougall’s article in InformationWeek entitled Oracle Sues Rimini Street For 'Massive Theft'
