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Oracle vs. Rimini Street

 
 
 
 
 
 
 
 

By Tony Kontzer

If you haven't been paying attention to the emerging war between Oracle and Rimini Street, a third-party provider of support for enterprise applications, then it's time you did. The two are, quite possibly, in the midst of determining the fate of the third-party support model, which has been kind to the budgets of many an Oracle or SAP customer.

In the latest heating up of their showdown, Rimini Street this week filed a countersuit against Oracle, accusing the corporate software giant of anti-competitive practices, along with copyright abuse, defamation, disparagement and trade libel. This was in response to the suit Oracle filed against Rimini in January, in which it alleged that Rimini has stolen its software and support materials.

Rimini CEO Seth Ravin has, naturally, maintained his company's innocence over the months, suggesting that Oracle is motivated by a desire to wrap up all of the support revenue generated by its products. In the press release announcing its countersuit, Rimini calls Oracle's suit "baseless" and "false and malicious."

I'm clearly in no position to comment on the allegations and counter-allegations, but what I can say is this: Anyone with oversight of an IT budget out to be rooting for Rimini Street. Boasting support services that cost a fraction of Oracle's maintenance contracts, Rimini has been muscling in on what Oracle clearly sees as its rightful ecosystem, and delivering strong value to Oracle customers.

What I can also feel safe in saying is this: Oracle does not like third-party support providers. For all the evidence you need, I cite two recent cases:

- The Sun Microsystems user community is ruffled over Oracle's moves to force them into signing on for maintenance with Oracle or be blocked from access to critical patches.

- Less than two years ago, a lawsuit helped Oracle to get SAP to shutter TomorrowNow, a provider of third-party support for Oracle applications SAP had acquired a few years earlier.

I may be proven wrong, but Oracle's strategy here seems to me to be ill-advised. In fact, it reminds me more than a little of the Recording Industry Association of America's campaign against file-sharing sites, a short-sighted misjudgment that completely failed to acknowledge the emerging business model presented by the Internet. It also could be interpreted as a chink in the armor--a sign that Oracle knows it's clinging to an outdated business model, rather than accelerating its transition to the cloud computing phenomenon.

Larry Ellison can scoff at the cloud all he wants--perhaps even deservedly so--but if he underestimates the lure of the cloud to an increasingly budget-conscious and complexity-phobic IT market, he may find himself on the outside looking in, filing lawsuits for a living. Clearly, I'm exaggerating, but hopefully you see my point.

My advice to Oracle: Let the third-party support providers pick the meat that's left on the licensed software market. Instead of fighting over it with as if you were a vulture to Riminy's hyena, shift your full focus to the model that trades in maintenance contracts for monthly subscriptions, and don't ever look back.

You can still sell your big packaged apps to the late adopters, but you'll engender valuable customer affinity that will be worth its weight in gold when you find yourself selling the cloud above all.

 
 
 
 

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