Oracle Puts Third-Party Support in Crosshairs

Oracle says it will focus strongly on customer service and support forcustomers of both its products and those of Sun Microsystems, whoseacquisition it completed on Wednesday.

“We believe our customers deserve the best level of support and it’sour job to make that extremely compelling,” Juergen Rottler, executivevice president of Oracle global customer services, said at a briefingon the company’s plans at the Oracle conference center in RedwoodShores, Calif.

Oracle aims to rationalize and improve Sun’s customer support and wantsto hire support engineers with expertise in Oracle and Sun products,Rottler said.

He also warned third-party support providers that Oracle is coming after them.

It’s All About the Service

There’s big money in customer service and support: In fiscal 2009,services provided Oracle with US$15.4 billion in revenue, Rottler said.

Oracle will bring its expertise in remote support and proactivesupport “very aggressively” to Sun customers, Rottler announced. Itwill also simplify Sun’s support pricing. “It gets very complicatedwhen each product has a custom support price. Fiveyears ago, we decided at Oracle to offer one support level — the verybest in the industry. You should expect something very similar for theSun customer base,” Rottler said.

“A lot of the support from Sun is fragmented,” Oracle CopresidentCharles Phillips said. “Some was done by Sun, some by third parties,some by nobody. We want to offer a more comprehensive support plan.”

Oracle will integrate its support tools and offer proactive supporttools that can collect information about customers’ systems,anticipate problems, resolve them immediately and recommend changesto customers’ systems.

Oracle is also looking to add more supportengineers to its payroll, Rottler announced. “If you’re a good Oracle or Sun supportengineer with good knowhow, we want to see your resume,” he said.

Whether or not Oracle can deliver on its promise is open to question.”There’s a difference between saying something and delivering on it,”Charles King, principal analyst at Pund-IT, pointed out.

“Extra effort and slimmer profit margins tend to erode a vendor’s bestintentions,” he told the E-Commerce Times.

The Third-Party Support Problem

Oracle has a fight on its hands to maintain customers — over theyears, its customers have been flocking to third-party serviceproviders to cut costs. “Oracle does a good job ofprotecting customers, but it’s far from cheap,” Rob Enderle, principalanalyst at the Enderle Group, told the E-Commerce Times.

That cost has sent Oracle customers to third-party providers like Rimini Street, whose revenueshave gone through the roof. “Our 2009 revenues were nearly triplethose of 2008,” David Rowe, Rimini Street’s vice president of globalmarketing and alliances, told the E-Commerce Times. “Client satisfactionrates maintain their extremely high levels at 99-plus percent; clientsextended the length of their contracts from five years to seven in2009; and Rimini Street more than doubled its employee countworldwide.”

Rimini Street’s success doesn’t sit well with Oracle. “We believe weshould be the ones to support our customers,” Rottler said. “We needto make this a lot more compelling than it was in the past for somecustomers.”

“This is where Oracle makes a lot of money, and it feels third-partyservice providers are stealing from it,” Enderle said. “They are logging into Oracle systems and taking advantage of customer programs that, bylicense, they shouldn’t have access to.”

Oracle is gearing up to protect its turf. “If you’re a third-partysupport provider offering multivendor support, we’re coming,” Rottlersaid. “We’re coming.”

On Tuesday, Oracle filed suit against Rimini Street and its CEO, SethRavin, in the U.S. District Court for the District of Nevada. Oraclealleges the defendants have been stealing its software and relatedsupport materials through an illegal business model.

Rimini street logs onto Oracle’s password-protected technical supportWeb sites using customers’ credentials and downloads more software andsupport materials than the customer is entitled to under its licenseagreement, Oracle alleged.

The complaint also accused Ravin of continuing a corrupt businessmodel that causes Oracle irreparable harm.

Echoes of TomorrowNow

Oracle’s charges against Rimini Street are very similar to those itlaid in 2007 against SAP and the latter’s TomorrowNow division, whichprovided third-party support for Oracle’s PeopleSoft and JD Edwardssoftware at a discount. That action forced SAP to shut downTomorrowNow in October of 2008. Oracle’s suit against SAP continues.

TomorrowNow apparently used techniques very similar to those Oracleaccuses Rimini Street of using. Rimini Street’s Ravinfounded TomorrowNow and sold it to SAP in 2005.

Rimini Street is fighting the lawsuit directed against it. “With results like these andour huge and growing pipelines of business around the world, we do notthink it is surprising that Oracle feels compelled to take some actionto try and halt growing customer defections,” Rimini Street’s Rowesaid.

“Rimini Street offers a valuable support program at a savings of morethan 50 percent compared to Oracle. Hundreds of companies have alreadyselected Rimini Street’s support, and Rimini Street will continue itsfight to ensure that enterprise software customers have a choice ofvendors and support options.”

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