No question Oracle is one of the most dominant and financially successful tech companies in the world. In fact, almost everyone reading this probably directly or indirectly owns a small part of Oracle in their investment portfolio. However, through sales practices, audit actions, acquisitions and never-ending lawsuits, Oracle seems to be relying increasingly on legal tactics and maneuvers to shut down competition and show growth to Wall Street, rather than be a disruptive innovator. Some would say that Oracle’s core competency now is litigation, not innovation.
Ongoing War with Rimini Street
We have long advocated for seeking alternatives in support wherever and whenever possible to ensure you get the best possible balance of price and service. One of those viable market options is Rimini Street. Starting in 2010, Oracle has been suing Rimini Street almost non-stop for all kinds of copyright infringements. Oracle has scored its share of victories along the way, only then to give much of those monetary awards back to Rimini on appeal.
Recent Activity
January 2022: An appeals court ruled on ten items before the court, and ruled in favor of Rimini on five, and Oracle on the other five, which resulted in Rimini being sanctioned for $630k. Both sides claimed some level of victory, but the war is far from over.
October 2022: There is still a pending case called Rimini 2 which is in the pretrial stage. While it’s too early to tell how that will turn out, just this week there was an interesting 8-K SEC filing by Rimini Street. The key line in the filing is “On October 10, 2022, Oracle filed a Notice with the Court, indicating its intention to agree at an October 14, 2022 Court status conference to withdraw all of its monetary damages claims against the Company in Rimini II and to proceed with a bench trial instead of a jury trial for its claims for equitable relief.”
While still early, some might read that as Oracle backing away from some of their claims acknowledging their case is not that strong. Time will tell however, but sounds like in the near term, its business as usual.
Big Picture: Oracle (and SAP) hates Rimini Street
No one has encapsulated this better for both parties than CEO, Seth Ravin of Rimini:
"We came at this with a disruptive competitive offering that we knew was a multibillion business. When the support business generates more cash than most countries have, you're going to fight pretty hard to hold on to that money. There's no surprise there."
That probably explains Oracle’s true motivations. SAP once started down the same litigation road, but opted to buy Seth Ravins first company, TomorrowNow instead. Can you guess what happened next? Oracle sued SAP. They won over $1B in the initial finding, but on appeal that was reduced to $345M, and Seth seemed to bounce back nicely.
Irony: Oracle raising support rates.
Interesting to note that while all this litigation is happening, Oracle announced earlier this year that it would leverage its inflation index clauses to raise support rates. In the USA, that will be an 8% increase starting in Oracle’s new 2023 fiscal year (which started June 1). If you are based in the UK or elsewhere, it may be higher (or lower) based on what your rate of inflation is. So, while they try to stifle competition with litigation to protect market share, they raise rates on existing customers – good model!
What does this mean for you?
From Shakespeare’ Hamlet: “The lady doth protest too much methinks.” In this context, it means third party support is the real deal and should always be considered. Yes, Oracle may win some legal skirmishes in this battle, but the numbers awarded in litigation thus far barely registered as a percentage of revenue, are maybe .01 or .02%? Clearly, Oracle is in it to protect their business from going elsewhere in this multibillion-dollar support market.
In this time of cost cutting, slowing revenue, and inflation, now is the perfect time to consider Oracle and SAP third party support options.
Note that both SAP and Oracle applications software have been orphaned by the OEM. With no new innovations, OEM support is an expensive "insurance" policy that insures only that you will pay more in the future, either due to inflation or stepping into your OEM’s cloud version. Be prepared if you go your OEM’s cloud route, as you will pay exponentially more due to their pricing policies which punish their captive customers.
Rimini Street isn’t the only option out there, and we’ve worked with most of them. We can help map you to the right options, compare capabilities, optimize the products, and negotiate the deal – and return an ROI of 500%+ in most cases.
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