Eye on Oracle

Sep 12 2007   1:31PM GMT

netCustomer CEO makes case for third-party support

Derek Kuhr Derek Kuhr Profile: Derek Kuhr

Oracle’s charges of industrial espionage against SAP’s TomorrowNow arm have brought third-party support vendors into the limelight. Users want to know if they’re credible, if they’re honest and if they can really save a company as much money on support costs as they say they can.

This week we asked Punita Pandey, the CEO of netCustomer, to make an argument for third-party support. Before Oracle acquired PeopleSoft, netCustomer provided support for PeopleSoft customers through a direct contract with the CRM giant. The firm has since parted ways with Oracle and now offers its support services as a third-party.

Give it a read and let us know if you think she makes sense. Also, we’d like to know if you or your company would ever consider going with a third-party support provider? Why or why not? And if you have gone with a third-party support provider like netCustomer, Rimini St. or TomorrowNow, what has that experience been like? I’m interested to hear your opinions, because I’m sure they’ll be a big help as we continue to cover the Oracle-SAP case.

From Punita Pandey:

What’s wrong with this picture?

You consumed a good chunk of your IT budget in buying an enterprise applications suite.  You hired an IT consulting firm to implement the software. The implementation cost over 10 times what you paid for the software and took over a year to complete. Since the product had several shortcomings, you had to apply various patches, again using expensive IT consulting resources.  Then you invested in upgrading your IT team skills to manage this applications environment.  The vendor then asked you to upgrade to the next version to get all the features you had wanted.  Again, the upgrade project chewed up a lot of time and money.  Then you realized that several functions you needed were still missing in the latest version and you ended up customizing the code to suit your needs. 

It took a few more years in building all the features you wanted and stabilizing the applications environment. Then you run into an issue and you call the vendor for support. As soon as the support person finds out that your issue may be located in the customized portion of the code, they wash their hands off. You also realize that you may not want to upgrade to next version of the software since you have spent all this time customizing the setup.  Besides your applications environment is now stable and you do not want to deal with new bugs and instability that the new version will bring, not to mention the added cost of consulting services.

But you realize that you are still paying a hefty amount (up to 22% of your license fee) to the product vendor as support and maintenance fee. 

And you wonder why?

In a scenario like this, won’t you, the customer, think that you should a pay minimal fee for support and maintenance and be able to run your applications for as long as you want? After all these years in the software industry, won’t you expect the product vendor to innovate on the support front so it is hassle free and cost effective? Won’t you expect your IT consulting firm to offer you a pay-for-performance model and be able to deliver services on-demand without having to foot expensive hourly rates and travel expenses.

For years we have been behind-the-scenes support provider for several leading ERP vendors including PeopleSoft and JD Edwards. With the ongoing consolidation in the ERP space, we believe the time is right for us to offer our services directly to the end customers. After all, what’s good for the goose should be good for the gander.

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  • Bill
    All of the above has warrent and is becomming clearer as time moves forward. With older, stable versions keeping the Business afloat and with yearly IT budgets being reviewed every QTR, items like maintenance are being questioned more and more. Third party maintenance needs to be made available for applications like SAP to allow for the assurance of coverage for Break Fix issues as the Application continues to age. Other things to be considered are access to Developer Keys for regestering SAP objects when need be and Disaster Recovery Hardware Keys made available when need be for testing and the ultimate Disaster scenario.
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