Posted by: Shayna Garlick
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New research findings from Rimini Street help validate something that Oracle will not be happy to hear: Oracle customers who use third-party support experience ongoing savings, both in terms of material cost and organizational efficiency.
The third-party support provider recently conducted an independent research project with Nucleus Research that compared Rimini Street support to software vendor annual support. The resulting report, “Benefits from Third-Party Support: Rimini Street,” highlighted how Rimini Street gives customers benefits such as improved support and reduced upgrade costs.
This seems to be something the majority of customers already know. In March, a report from analyst Ray Wang revealed a 113.8% increase in interest in third-party support from Q3 2009 to Q1 2010, with Oracle users expressing the most interest in it.
The Rimini Street study, however, included specific candid responses from Rimini Street customers about their experiences with third-party support, such as:
“”We were paying $2,750,000 and now we’re paying $750,000, so we save about $2 million.”
But if Oracle is worried about losing its customers to third-party support, could they simply lower their 22% annual fees? This is something many users wonder — especially when they don’t feel they are getting what they pay for — but with Oracle reporting a 90% profit margin on maintenance services, it seems unlikely.
Oracle’s support policies are not changing with the Sun acquisition, either. The software giant announced in March that it was clamping down on Sun support contracts, requiring Sun customers to get their contracts in order with Oracle for their hardware. One customer admitted that Sun’s service pricing model was “horrible,” but wasn’t sure if Oracle’s would be any better.
In his view, Oracle’s approach looks to be easier to administer but (and this is a big, bad but), customers may not care how easy it is if their support costs go through the roof.
How far will Oracle continue to go to weed out third-party support providers? And how far will customers go to continue to seek them out?