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How to Negotiate Maintenance Discounts
from Oracle® and SAP® New analyst research uncovers the positive pricing
impact of third-party maintenance for Oracle and
SAP customers
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Featured Presenters
Our knowledgeable speakers today are:
R “Ray” Wang Principal Analyst & CEO Constellation Research
Sebastian Grady President & COO
Rimini Street
David Rowe SVP & CMO
Rimini Street
• Current State of Enterprise Software Market
• How to Negotiate Maintenance Discounts from
Oracle and SAP
• Get The Best Maintenance Pricing and Service
Terms
• Panel Discussion- Q&A
Agenda
Current State of Enterprise Software Market
David Rowe
SVP & CMO
Rimini Street
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 6
The Big Problem
• High Cost, Low Value Maintenance Expenses Limit Innovation
20% New IT Initiatives
80% Ongoing Operations
and Maintenance
*Gartner; “Gartner's Top Predictions for IT Organizations and Users, 2012 and Beyond:
Control Slips Away”, November 23, 2011
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 7
“Despite hundreds of billions of
wasted on failed R&D
projects, most market
influencers would agree that
enterprise software vendors
have produced a dearth of
innovation over the past
decade…Innovation came
from the consumer tech side
and next-generation solution
providers.”
– Ray Wang, SoftwareInsider
Finding Funds for Growth and Innovation
ERP
System
Mobile
Apps
Open
Source
BI Industry
Apps
SaaS
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 8
The Big Opportunity
“As steward of the company’s IT budget, I am responsible for ensuring that
every dollar pays dividends. When I took a look, I found that my ERP
maintenance was costing me approximately 20% of the entire budget”
Eric Robinson, CIO
Color Spot Nurseries
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 9
Polling Question 1
How much of your IT budget is ERP maintenance?
• Less than 10%
• 10% ̶ 20%
• More than 20%
• Not Sure
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
TM
How to Negotiate Maintenance
Discounts From Oracle and SAP
And the Seven Steps to Contract Negotiations Success
R “Ray” Wang (@rwang0)
Principal Analyst & CEO
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
Survey Results Show Impact
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
Customers feel locked into existing
contracts
Customer lock in
Support an maintenance fees go
up despite lower costs to maintain mature software
Legacy applications face forced end of
life deadlines
Market consolidation leads to fewer choices for perpetually licensed
software
12
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
Benefits of Third Party Maintenance
13
Copyright © 2011 R Wang and Insider Associates, LLC. All rights reserved. Source: Software Insider Survey: State of 3PM Q3 2009 n = 51/260, Q1 2010 n = 101/241, Q2 2011 n = 139/244
Contain runaway costs
Buy time for reimplementation
Begin modernization
efforts
Sunset legacy systems
Pay for innovation Outsource tax and
regulations
Improve performance
Consider two-tier ERP
Move to Cloud
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
Third Party Maintenance creates counter
balance and choice
• Support and maintenance fees go up despite lower
costs to maintain mature software
• Legacy applications face forced end of life deadlines
• Market consolidation leads to fewer choices for
perpetually licensed software
14
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
15
Copyright © 2013 R Wang and Insider Associates, LLC. All rights reserved. Source: Software Insider Survey: Oracle or SAP Contract Negotiations n = 149/184, Q1 2013
Awareness of Third Party Maintenance
remains high
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
16
Copyright © 2013 R Wang and Insider Associates, LLC. All rights reserved. Source: Software Insider Survey: Oracle or SAP Contract Negotiations n = 149, Q1 2013
More than half surveyed using a
competitive proposal to negotiate deals
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
17
Copyright © 2013 R Wang and Insider Associates, LLC. All rights reserved. Source: Software Insider Survey: Oracle or SAP Contract Negotiations n = 149, Q1 2013
Over 60% of organizations believe third
party maintenance provides leverage
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
18
Copyright © 2013 R Wang and Insider Associates, LLC. All rights reserved. Source: Software Insider Survey: Oracle or SAP Contract Negotiations n = 149, Q1 2013
A majority found a competitive quote is
effective in contract negotiations
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
19
Copyright © 2013 R Wang and Insider Associates, LLC. All rights reserved. Source: Software Insider Survey: Oracle or SAP Contract Negotiations n = 149, Q1 2013
Almost 30% left Oracle or SAP for third
party maintenance
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential 20
Next Steps
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential
The seven steps to negotiating success
1. Assemble the right team
2. Identify the key business drivers
3. Align with the software ownership
life cycle
4. Determine the adoption plan
5. Align contract strategy with
product adoption
6. Identify main leverage points
7. Finalize the negotiation strategy
21
© 2010 - 2013 Constellation Research, Inc. All rights reserved. Client Confidential 22
Thank you
R “Ray” Wang
650.918.6619
Twitter: @rwang0
http://blog.softwareinsider.org
www.ConstellationRG.com
Get the Best Maintenance Pricing and
Service Terms
Sebastian Grady
President & COO
Rimini Street
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 24
• Competition = Good: Competition is good for any industry, and ensures
customers have a variety of choices to meet different needs.
• Software Vendor Maintenance Fees Continue to Rise: Despite
"Expensive Maintenance Fees" being the number one dislike among users,
software vendors continue to raise maintenance fees.
• Awareness: Many Oracle and SAP customers are unaware that competitive
third party support options exist, and have been needlessly overpaying for
annual maintenance.
• Many Will Make the Switch: We believe that many customers will select
the 50% annual fee savings, more responsive service, and innovative
support features of Rimini Street's support program once they compare the
two options.
Why Rimini Street is Helping Licensees
Negotiate with Oracle and SAP
CUSTOMERS WIN EITHER WAY
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 25
Third-Party Support has Reached a
Tipping Point
• Third-party support market has grown explosively Widespread adoption and a long track record of client
satisfaction and success
• Third-party support is changing Oracle and SAP
maintenance market Challenging monopolistic-like practices, policies and pricing
• Third-party support proposal provides leverage Savvy customers are now using competitive third-party support
proposals for annual maintenance to successfully gain
leverage1,2,3
1Forrester Research, "Rimini Street Challenges Big Software Maintenance Fees,“ July 20, 2012
2ZDNet, "Third-party support will lead to more competitive negotiations,“ October 23, 2012
3Constellation Research, "The Positive Pricing Impact Of Third Party Maintenance For Oracle and SAP Customers," March 13, 2013
4Cowen and Company, " SAP Is Offering Significant Discounts on Maintenance Renewals," November 20, 2012
"We recently spent time
talking with a handful of large
SAP customers that have
received roughly 50%
discounts on maintenance
renewals.” 4
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 26
• Introduced
third-party
support for
PeopleSoft and
JD Edwards
• Expanded
coverage to
Canada
and Europe
• 100+ clients
• Launched SAP
support
• Expanded
coverage
to Asia Pacific
• Over 275 clients
• Global tax and
regulatory
capabilities
to 190+ countries
• Office expansion
to Latin America
• Adams Street
Partners private
equity investment
• Over 350 clients
• 40%+ revenue
growth
• Launched Oracle’s
E-Business Suite
application support
• Filed patent
for proprietary
tax, legal and
regulatory system
• Over 450 clients
• 130% growth in
YOY new sales
bookings
• $400M contract
backlog
• Quadrupled
international sales
bookings
• General availability
of Rimini Street
Tax Engine
• First and only ISO-
certified provider of
global third-party
enterprise software
support services
• 550 clients and
growing
• $550M contract
backlog
• Tripled Oracle
new sales
bookings over
the past year
• Tripled SAP
revenue over the
past year
• Launched CNC
Managed
Services for JDE
• Closed first major
U.S. Federal
client
• Rimini Street
founded
• Introduced
third support
for Siebel
IT Vendor
of the Year
Top 12 Most Disruptive
Enterprise IT Vendors
20 Companies to
Watch in 2012
Rimini Street is Leading the Way
• Over 600 clients
and growing
• $630M contract
backlog
• $52M revenue
run rate
• Only ISO
9000/27000
certified 3rd Party
Support provider
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 27
Over 600 Clients 71 of Fortune 500, 15 of Global 100
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 28
• “You now you have a choice where
you obtain software support. In the
past, you could only get support from
the software vendor. Without
competition, your negotiation options
were minimal. Now that 3PSMPs have
given you an alternative, you can use
the threat of moving to them to help
you negotiate a better deal with your
software vendor..”
• You do have a choice. Having a
choice means you now have
negotiation leverage. Negotiation
leverage means you can cut your
Oracle or SAP support costs.”
Forrester, “The Emerging Third-Party
Software Support Marketplace: Questions
And Answers” October 22, 2012
“You Do Have a Choice…. Negotiation Leverage
to Cut Your Oracle/SAP Support Costs”
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 29
“The vendor didn’t take our negotiations seriously until we mentioned
we had a proposal from Rimini Street.”
ERP Licensee attempting to negotiate maintenance terms with vendor
Competitive Proposal From Rimini Street Leverage and Credibility at the Bargaining Table
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 30
Or Choose a More Relevant Support Model
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 31
A Fundamentally Different Support Philosophy
• Engineers Assigned Directly to Each Client- Every
client is assigned a Primary Support Engineer (PSE)
with an average of 10 years of real-world experience
• 30-Minute Guaranteed Response – With average
engineer to client response time of 3 ½ minutes
• Every Issue is Important – Our PSEs immediately
begin working your issue like it’s a severity 1 without
requiring clients to jump through hoops to justify first
• Relevant Service – PSE relationship enables additional
support features including support for customizations at
no additional charge
• Engineer Compensation Based on Client Success –
Compensation based on client satisfaction and retention
Rimini Street is passionate about providing clients the most responsive and
effective enterprise software support in the industry delivered through direct,
personal relationships with highly experienced expert engineers
IT Vendor
of the Year
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 32
www.riministreet.com/proposal
You Win Either Way
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 33
Initial Proposal Package Getting Leverage with the Software Vendor
Cover Letter Quotation Initial
Proposal Buyer’s
Guide
www.riministreet.com/proposal
Panel Discussion – Q&A
Please submit your questions now.
R “Ray” Wang Principal Analyst & CEO Constellation Research
Sebastian Grady President & COO
Rimini Street
David Rowe SVP & CMO
Rimini Street
An Information Week Webinar Property of Rimini Street ©2013 | Proprietary and Confidential 35
Thank You
Download these Resources from the Console:
• Constellation Research Report: "The Positive Pricing Impact Of Third Party
Maintenance For Oracle and SAP Customers," March 13, 2013
• Forrester Research Report: “The Emerging Third-Party Software Support Marketplace:
Questions And Answers” October 22, 2012
• Rimini Street White Paper: “Take Back Control of Your ERP Investment.”
Webcast Recording and Slides:
The webcast recording will be available in 48 hours and you will receive an email with the
playback instructions. To request a copy of today’s webcast slides, email:
To learn more about third-party support, contact Rimini Street at:
www.riministreet.com
Tel: 888 870-9692
Intl: +1 702 839-9671
