Since 2005, Rimini Street has grown by offering ERP customers the choice to extend the life of their products or access support at discounted rates, CEO Seth Ravin tells TechRepublic.
Rimini street reported revenue for the third quarter of 2023 at US$107.5 million (AU$163 million), up 5.4% from the same period last year. According to CEO Seth Ravin, the result shows the company is moving closer to its goal of becoming a US$1 billion (AU$1.5 billion) company.
If these revenues are achieved, they will come at the expense of some of the world’s largest enterprise software providers. Rimini Street has built its business providing end-to-end enterprise software support, products and services to customers using enterprise resource planning products from SAP and Oracle.
Instead of upgrading in line with ERP software release cycles, buyers, including brands such as Telstra, The Entertainment Group, Alliance Group and MYOB in Australia, use Rimini Street to support their products, thereby extending product life and support costs can lower.
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Rimini Street promises to give ERP customers more options
Since its launch in 2005, Rimini Street has grown by providing enterprise software buyers in the U.S. and internationally with software support for products such as SAP and Oracle, while competing with the support and roadmaps of the vendors themselves.
Rimini Street’s promise is to provide more choice to enterprise customers who have had to invest significant amounts in updating and supporting their ERP systems. Instead of being forced to follow vendor-dictated roadmaps, the idea is to give IT another path to consider.
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First, customers have the flexibility to extend the end of life of their products, meaning they can invest in potentially costly upgrades if necessary. You can also access third-party support for products, which Rimini says can reduce overall support costs by up to 90%.
The current economic environment is driving thinking
Rimini Street sees the current economic environment as an opportunity. Bringing CIOs and CTOs in APAC, as well as in the US renewed attention to IT spending Efficiency. Rising inflation essentially means they have less money on hand and are looking for ways to cut costs.
Companies are also looking at where they could get the best return on investment for their spending. While ERP software systems are critical, Rimini Street is betting that business buyers will recognize the value in investing saved money into growth-oriented initiatives for the future.
Rimini Street continues to face litigation
Rimini Street’s business model meant a tough time. The group has been in a legal battle with Oracle for 13 years. It was only A new judgment was issued in July 2023 in the recent court battle in which both Oracle and Rimini Street won partial victories.
Companies extend ERP lifespan and pay less for support
Rimini Street’s Seth Ravin doesn’t cut corners when it comes to the organizations he competes with. In fact, he says his point is to open the eyes of technology buyers who are collectively forced to spend billions on upgrades they may not want or need.
Extension of software end of life
Enterprise customers are aware that they face ongoing upgrade timelines for new versions of ERP platforms. The upcoming migration deadline for SAP S/4HANA in 2027, which had to be extended from 2025, is just one example of the implementation of this ERP software business model.
Ravin argues that the technology and software industries are alone when it comes to telling customers how long they can keep what they use running. He says it would be like a car owner who plans to extend the life of his car to 15 years, even though he is told he can only use it for two years.
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“Companies that have large, mission-critical systems – ERPs, CRMs, payroll systems – are being forced to make system changes even though they wouldn’t make those changes without coercion; They would use their money, their time and their people in different ways,” Ravin said.
Service and support services
Service and support from standard providers can also be expensive with ERP providers such as SAP and Oracle, as the profit margin is around 90%. Ravin said those margins do not represent a healthy consumer market for enterprise software support services compared to other industries.
Three reasons why customers should consider new options, according to Rimini Street
Ravin said companies should examine their return on investment from major system upgrades and compare the value they get from adhering to vendor roadmaps with the value they could get by investing those funds in other areas for future business growth.
The difference between business critical and strategic systems
Ravin said organizations distinguish between “mission-critical” and “strategic” systems. Just because something is mission-critical to a company – such as a payroll system – doesn’t mean it’s a good strategic investment that will support company growth, he said.
Customers must invest time, staff and money in upgrades
IT and business teams will always have more to do than they have the time, money or people to do it with. Ravin said IT leaders who accept this need to think about where they can best allocate their time, people and money to align with the company’s strategic goals.
Customers care more about what systems do than who runs them
Rimini Street argues that businesses, like consumers, care less about the brand or system they use and more about what the system actually does for them. This focus on utility makes them less loyal to specific brands and systems, as well as where they receive service and support.
Powerful customers could drive changes in the ERP market
The ERP market now has a general understanding that options like Rimini Street exist. However, Ravin said buyers are still largely unfamiliar with the business model, so there is “a huge opportunity to engage with more CIOs and CTOs” to grow the business.
Rimini Street focuses on education. Ravin said this means making technology buyers aware that, as he put it, “they are being gamed and manipulated,” and showing them that there are alternatives to software vendors’ mandated upgrade timelines and support models.
Customer power is a factor in the future of ERP software business models
Ravin believes that a revolution of sorts is coming to the enterprise ERP market. He said “customers have tremendous power” and if more customers rejected vendors’ roadmaps, major ERP vendors and the industry would have to adjust their approach.
“If you don’t feel or understand that you have choices, you don’t have freedom — and you don’t have a strong consumer market,” Ravin said. “Companies are starting to look and say, ‘I know what you want me to do, but I have a choice now.’ What a wonderfully changed position of power this is.”
