Eye on Oracle

Mar 3 2010   5:07PM GMT

Users need to fight back against Oracle’s third-party support clamp down

Shayna Garlick Shayna Garlick Profile: Shayna Garlick

Using a third-party maintenance and support vendor can be a smart decision for some Oracle customers given those customers can expect better service, a significant reduction in fees and more flexible maintenance policies.

Naturally, Oracle hates this.

In January the software giant sued third-party support provider Rimini Street for intellectual property theft, claiming that the company and CEO Seth Ravin are responsible for “massive theft of Oracle’s software and related support materials.” It also accused Rimini Street of alleged copyright infringement, fraud, breach of contract and unfair competition.

Two years earlier, Oracle made TomorrowNow the target of a similar lawsuit, in which the software giant made numerous allegations – including committing “corporate theft on a grand scale” and stealing software products — against the SAP-owned third-party support provider, some of which SAP admitted to.

But as Oracle turns against third-party maintenance providers, more and more users are turning toward them.  In a new report from Altimeter Group analyst Ray Wang, interest in third-party maintenance services are shown to have increased by 113.8% from Q3 2009 to Q1 2010.

So what’s causing such a surge?

According to Wang, survey results show that high costs (Oracle charges 22% annual fees) and reduced budgets are the biggest culprits, but other contributing factors include customers disliking the vendor, poor service and feeling they are not getting enough value for their money. Also, 30% of respondents reported delivering their own support, having no need to pay for outside maintenance.

In Oracle‘s defense, it has good reason to be concerned with protecting its intellectual property. Wang’s survey showed that the vendor had the highest percentage (88.1%) of users who expressed interest in seeking third-party support with SAP coming in second at 76.2%.

But how will Oracle’s legal battles with third-party providers affect not only the companies they put under fire, but their own customers?

In his article “ERP Support: How far will Oracle go to protect the golden egg?” Thomas Wailgum wonders if continued litigation by Oracle will discourage competition, giving customers little choice but to stick with Oracle for support at a time when, as Wang points out, they already have few options.

If Oracle has reasons other than simply protecting its $3 billion in profits from maintenance and support to file lawsuits and providers are actually breaking laws, Oracle should protect its rights. But customers have rights as well, and third-party enterprise support is entirely legal.

Wang is encouraging users to band together and take action.  “Users and user groups must vigorously defend their positions in contracts and legal action or lose this right.  Failure will result in a continued software maintenance monopoly. Success will ensure market competition and renewed innovation.” he writes.

Do you use third-party support? Why or why not? Do you feel like you have enough third-party maintenance options? Do you think Oracle has gone too far in going against providers of third-party support?  If you have any answers or opinions to these questions we would like to hear from you.

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