Oracle Puts Third-Party Support in Crosshairs

Oracle says it will focus strongly on customer service and support for customers of both its products and those of Sun Microsystems, whose acquisition it completed on Wednesday.

"We believe our customers deserve the best level of support and it's our job to make that extremely compelling," Juergen Rottler, executive vice president of Oracle global customer services, said at a briefing on the company's plans at the Oracle conference center in Redwood Shores, Calif.

Oracle aims to rationalize and improve Sun's customer support and wants to 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 proactive support "very aggressively" to Sun customers, Rottler announced. It will also simplify Sun's support pricing. "It gets very complicated when each product has a custom support price. Five years ago, we decided at Oracle to offer one support level -- the very best in the industry. You should expect something very similar for the Sun customer base," Rottler said.

"A lot of the support from Sun is fragmented," Oracle Copresident Charles 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 support tools that can collect information about customers' systems, anticipate problems, resolve them immediately and recommend changes to customers' systems.

Oracle is also looking to add more support engineers to its payroll, Rottler announced. "If you're a good Oracle or Sun support engineer 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 best intentions," he told the E-Commerce Times.

The Third-Party Support Problem

Oracle has a fight on its hands to maintain customers -- over the years, its customers have been flocking to third-party service providers to cut costs. "Oracle does a good job of protecting customers, but it's far from cheap," Rob Enderle, principal analyst at the Enderle Group, told the E-Commerce Times.

That cost has sent Oracle customers to third-party providers like Rimini Street, whose revenues have gone through the roof. "Our 2009 revenues were nearly triple those of 2008," David Rowe, Rimini Street's vice president of global marketing and alliances, told the E-Commerce Times. "Client satisfaction rates maintain their extremely high levels at 99-plus percent; clients extended the length of their contracts from five years to seven in 2009; and Rimini Street more than doubled its employee count worldwide."

Rimini Street's success doesn't sit well with Oracle. "We believe we should be the ones to support our customers," Rottler said. "We need to make this a lot more compelling than it was in the past for some customers."

"This is where Oracle makes a lot of money, and it feels third-party service providers are stealing from it," Enderle said. "They are logging in to Oracle systems and taking advantage of customer programs that, by license, they shouldn't have access to."

Oracle is gearing up to protect its turf. "If you're a third-party support provider offering multivendor support, we're coming," Rottler said. "We're coming."

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

Rimini street logs onto Oracle's password-protected technical support Web sites using customers' credentials and downloads more software and support materials than the customer is entitled to under its license agreement, Oracle alleged.

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

Echoes of TomorrowNow

Oracle's charges against Rimini Street are very similar to those it laid in 2007 against SAP and the latter's TomorrowNow division, which provided third-party support for Oracle's PeopleSoft and JD Edwards software at a discount. That action forced SAP to shut down TomorrowNow in October of 2008. Oracle's suit against SAP continues.

TomorrowNow apparently used techniques very similar to those Oracle accuses Rimini Street of using. Rimini Street's Ravin founded TomorrowNow and sold it to SAP in 2005.

Rimini Street is fighting the lawsuit directed against it. "With results like these and our huge and growing pipelines of business around the world, we do not think it is surprising that Oracle feels compelled to take some action to try and halt growing customer defections," Rimini Street's Rowe said.

"Rimini Street offers a valuable support program at a savings of more than 50 percent compared to Oracle. Hundreds of companies have already selected Rimini Street's support, and Rimini Street will continue its fight to ensure that enterprise software customers have a choice of vendors and support options."