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Rimini Street survey results indicate continuing strength for 3PM

Den Howlett Profile picture for user gonzodaddy October 2, 2014
Summary:
Rimini Street survey results implies continued momentum for 3PM and surprising similarities with SAP customers.

In a relatively low key announcement, Rimini Street published the findings of a survey (signup required) among 139 Oracle customers that assesses attitudes to Oracle Fusion, upgrades and maintenance. Unsurprisingly, the results support the continuing growth in 3PM (third party maintenance) offering good insights into why customers might choose this option.

The results also indicate surprising similarities between Oracle and SAP customers.

Let's be clear up front, I'm not a huge fan of vendor surveys and 139 is not a particularly large sample out of a potential pool of 90,000 Oracle applications customers (PDF). While Rimini Street claims it has one of the best Oracle customer databases, it is tight lipped on just how many that 139 represents. On the other hand, when i spoke with the company, they said that the survey results didn't present any special surprises, based upon what they see in market.If anything, Rimini Street say the results support what they see in the market.

Go figure for yourself whether the Rimini Street sample is representative but some aspects of the results resonate. Last year for example, a Forrester report came to broadly similar conclusions to that being reported upon today. That would suggest there has been little change in customer attitudes over 18 months.

In some senses, Oracle is caught in a trap of its own success. According to the survey, only 5% plan to migrate to Fusion Apps, Oracle's take on cloud applications. Of the remainder, more than 50% cite 'no strong business case' as the reason for not migrating. (see chart below)

rimini street - fig2
Where have we heard that recently? Last month, we discussed the results of an ASUG survey among American SAP customers:

Three-quarters of the customers who said they have not yet purchased any SAP HANA products say they can’t identify a business case that justifies the cost. That reason topped the next closest set of responses by nearly 40 percent (we allowed for multiple responses). Following that reason were skillset, roadmap and upgrade issues.

It would be interesting to hear what Oracle customers say today, given they've been given the full OpenWorld experience this week and where we saw good direction but a degree of backfilling required in the roadmap.

Continuing with the success theme, it turns out that 75% of customers are either satisfied or extremely satisfied with Oracle support but 57% are either dis-satisfied or extremely dis-satisfied with the cost of support. In short, customers largely believe Oracle does a decent job supporting its applications but resent that it comes at premium cost. No surprise there and an all too familiar refrain among enterprise software buyers.

Once again, we see a set of familiar themes when it comes to issues with Oracle support. See chart below:

riministreet fig 10

Escalation is found to be difficult by just shy of 35% respondents.  This shouldn't surprise because when you look at the maintenance model, Oracle's management will naturally try and squeeze as much margin as possible out of this highly profitable line of business. However, it represents an opportunity for improvement that should inform Oracle as much as validating customer gripes.

All of this is good news for 3PM players like Rimini Street. It is hard to see how they can invade the territory of Oracle's top 500 customers which are closely managed by Oracle. But if you generalize the survey results to the remainder of Oracle's customers, that still leaves a huge market to attack.

Disclosure: Rimini Street, Oracle and SAP are premier partners at time of writing

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