A significant part of enterprise IT costs are taken up by infrastructure and systems maintenance, whether that involves keeping servers up and running or ensuring that software is kept up to date and error free.
The component nature of modern hardware means that faulty parts can be removed and replaced without crippling a system, but software is a much more murky area.
Many of the big software vendors, notably Oracle and SAP, charge on average around 20 percent of their initial licensing fee per year for the maintenance of enterprise resource planning (ERP) software. This recurring cost ensures that ERP systems critical for the daily operations of a company are kept patched, robust and up to date.
However, Sebastian Grady (pictured), president of enterprise software support firm Rimini Street, claims that there is more to these maintenance contracts than meets the eye - although the fact his firm offers an alternative means he has a vested interest in this notion.
Grady argued in an interview with V3 that ERP software vendors' upgrade cycles force enterprise customers to upgrade with them if they want to continue receiving maintenance support.
Often the vendors cease supporting and patching previous generations of ERP applications.
Grady said this need for change imposes costly migrations on enterprise customers and provides no support for any of the customisations they have made to older software to support the specifics of their business.
"For the last 30 years, a whole cartel of hardware vendors, software vendors and systems integrators have forced you to change for the sake of change, not because it's going to be the right thing for your company. But it's how they all get paid," he said, claiming that Rimini Street offers a different approach.
"Nobody wants the music to stop. We're the only company out here that's saying: ‘Time out. Let's take a real look at this thing. Do you really need to do everything everybody's telling you to do? Do you really need to spend all this money when we all know you have very limited IT budgets?'"
In response to this situation, Rimini Street offers software support for Oracle and SAP ERP deployments that are no longer maintained, as well as support for complex company-centric customisations.
"We will support that ECC 6.0 software for half the price [customers] are paying SAP today. And we'll support not just the base code but all the custom code for that same 50 percent price," Grady explained, using SAP's core ERP offering as an example.
Grady acknowledged that software from the likes of SAP and Oracle is some of the very best in the world, offering robust and functional systems that give them a well-deserved market share, but he is not so convinced by the support they offer.
Understandably, he championed third-party support and boasted a strong reception from Rimini Street's clients.
"We do support as if it was designed by the customer, not as if it was designed by the vendor," he said, noting how the company employs veteran IT consultants, coders and administrators who work from home or local offices, rather than offering support through outsourced call centre teams.
"If we took the same types of people that come from consulting and development and put them on the help desk it would be insulting. They would quit if they thought they were sitting in a pen with lots of other people with a headset on," he said.
"We set them up like Star Trek in their houses. We give them the best internet support, the best screens, the best computers, the best VPN access. Everything they need to be wildly successful. That to me is the face of the new helpdesk."
Jill Harrison (right), managing director of Rimini Street's Europe and Africa divisions, added that the way the company sets up its support teams means it employs near to an even split of female and male support workers.
"We've got an abundance of women working for us because it gives them a lifestyle opportunity to be at home with their children yet still work," she said.
Grady noted that Rimini Street can provide a level of support beyond that offered by the software vendors to over 1,000 clients owing to the company's willingness to accept much smaller profit margins.
Rimini Street boasts that not only does it offer an alternative road to the maintenance options presented by software vendors, but the firm also has a loftier goal of encouraging better support and maintenance contracts throughout the IT industry by showing it can be done for less cost if the vendors accept lower profit margins. However, this message is unlikely to be well received among shareholders of those large enterprise software vendors.
Careful with the cloud
But there is a potential fly in the ointment for Rimini Street in the form of the cloud, whereby companies that adopt cloud-delivered services receive them as a continuous service rather than licensed software.
This effectively avoids the need to be concerned about supporting on-premise software deployments.
Yet Grady is not convinced. He understands that cloud-powered software is the direction in which big vendors are heading, but said that they lack applications and functionality that are comparable to their own on-premise equivalents, which have benefitted from years of development and evolution.
"There's a perfect storm because Oracle and SAP are forced to be so relevant in the cloud, and both companies have announced their whole future is in the cloud. But they don't have the product, so the existing customers are scared to death," he claimed.
"The fear is that [vendors] are not going to invest in [on-premise applications] anymore. But the cloud apps are five or 10 years away, so what do I do in the meantime? And that's why I think it's a perfect gap for us."
Grady also advised enterprises to proceed with caution when it comes to adopting cloud-based services, warning that, while some systems can be pushed into the cloud, core businesses platforms require more thought.
Moving from a customised and well-established ERP set-up to a less tailored cloud service puts overly eager companies at risk of problems through early adoption.
"Sit on the sidelines. That's my recommendation to every client. Sit on the sidelines until you see how all this shakes out," he said. "And most CIOs I believe think that way. They are not buying the marketing hype."
Grady and Harrison raised interesting points about the direction software firms are heading and how maintenance and support needs to be considered by the customers and the vendors.
They also present a compelling case for software contracts, on-premise or cloud-based, to be more customer focused rather than simply pushing technology evolution for the sake of industry trends.
Yet it could be argued that some software vendors are already taking such action. For instance, SAP enhanced its HANA for cloud deployment last year but still promised continued on-premise support.
Then earlier this year SAP showcased an evolution of its Run Simple strategy that encompasses a strong cloud direction but shows that the firm has no intention of abandoning its on-premise customers.
More IT companies are getting comfortable with the cloud and investing heavily in platforms and services, but it remains to be seen whether Grady's warnings have merit or will be mitigated by the sheer scale, breadth and interoperability that the major software and cloud vendors can offer.
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