Why SAP and Oracle Customers are Rapidly Switching to Independent Support to Cut Maintenance Costs

Transcription

1 Why SAP and Oracle Customers are Rapidly Switching to Independent Support to Cut Maintenance Costs Andrew Powell Managing Director, Asia-Pacific and Middle East Rimini Street, Inc. Gartner Enterprise Application & Architecture Summit 2015 Tokyo, Japan

2 Forward-Looking Statements This presentation may contain forward-looking statements. The words believe, may, will, estimate, continue, anticipate, intend, expect, and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties, and are based on various assumptions. If the risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Rimini Street assumes no obligation to update any forward-looking statements or information, which speak only as of the date of this press release. 2

3 Discussion Today Current State of Enterprise Software You Now Have a Choice Business Impact of Independent Support Freeing Up Funds for Innovation Client Examples Nihon Rimini Street K.K. Top 5 Frequently Asked Questions 3

4 Current State of Enterprise Software Market

5 What are we talking about today? ANNUAL IT BUDGET software is either the first or second largest category of IT dollar spend. Of that amount, 50 to 60 percent of software spend goes on maintenance and support. The problem is that many of these dollars are wasted. Source: Accenture, How software maintenance fees are siphoning away your IT budget and How to Stop it. 5

6 The Enterprise Software World Has Changed 90 S Full-featured Stable Software 00 S 10 S Costly Forced upgrades Lack of Innovation from ERP 80 S Expensive, Low Value Maintenance Fees 93.5%(1) Profit Margin Service Dissatisfaction 59% Dissatisfied (2) Service Irrelevance Add-on development issues Vanilla code issues (1) Oracle Corporation, Financial report for Six Months ended 30 November 2014: Software License Updates and Product Support: US$8,948M Revenue Software License Updates and Product Support: US$ 573M Operating Expenses Software License Updates and Product Support: US$8,375M Operating Profit (i.e. 93.5%) 6 (2) Oracle Application Customer Satisfaction, Attitudes, and Plan Computer Economics Special Report. Nov % expressed dissatisfaction with the Cost of Support from Oracle.

7 You Now Have a Choice

8 Rimini Street Summary Rimini Street replaces the annual software maintenance service of SAP and Oracle Our price is 50% off what is currently paid to SAP or Oracle per annum We support old and new versions of the software for up to 15 years. Our customers are not forced to upgrade We provide Tax, Legal and Regulatory updates for Japan and across 200 countries Our service includes support for add-on developments We are the first and only independent software support provider to earn both ISO 9001:2008 and ISO 27001:2005 certifications Our service is ultra-responsive, including a named Primary Support Engineer and quick 24/7 call-backs Top 12 Most Disruptive Enterprise IT Vendors Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 8

9 Rimini Street Supported Products Product Lines: ALL Releases: 5.x, 6.0.x, 6.3.x, 7.0.x, 7.5.x, 7.7.x, 7.8.x, and 8.x Product Lines: HCM, FIN, CRM, EPM, SRM, SCM, Public Sector, and Campus Solutions Releases: 7.x, 8.x, and 9.x Product Lines: HCM, Financials, Distribution and Manufacturing Releases: ALL Product Lines: ALL Releases: 10.7 and later Product Lines: ALL All releases certified in conjunction with supported applications Product Lines: Majority of the Oracle Fusion Middleware Products All releases certified in conjunction with supported applications Product Lines: Merchandising Operations Management, Merchandising Planning and Optimization, and Supply Chain Planning and Execution Releases: 10.x and Later Releases Oracle Hyperion Planning, Oracle Essbase, Oracle Hyperion Financial Management, Oracle Hyperion Financial Close Management, Oracle Hyperion Strategic Finance and Oracle Financial Management Analytics Product Lines: ALL Releases SAP ECC 6.0 and earlier, BW 3.5, SAP Business Suite - including BI7, SCM, CRM, EWM, PLM, and GTS Product Lines: BusinessObjects Enterprise, Advanced Analysis, Interactive Analysis (Web Intelligence), Explorer, Dashboard Design (Xcelsius) and Crystal Reports Releases: BusinessObjects 6 and later releases 9

10 Support Comparison Overview Standard Support Program Feature Rimini Street Vendor Named, Regional Primary Support Engineer for Each Client Named, Global Account Manager for Each Client 24/7 Support with Guaranteed 30 Minutes or Less Response Global Tax, Legal and Regulatory Updates Installation & Upgrade Process Support Configuration Support Operational Support Application & Repository Fixes Documentation Fixes Fixes for Add-on Developments Performance Support Interoperability Support 50% Annual Cost Savings 10

11 Value & Client Success Drive Growth IT Vendor of the Year Top 12 Most Disruptive Enterprise IT Vendors Nearly 1,000 clients 42% Net Revenue growth YoY Rimini Street founded Introduced independent support for Siebel 20 Companies to Watch in 2012 Introduced Independent Support for PeopleSoft and JD Edwards Expanded coverage to Canada and Europe Over 100 clients Launched SAP Independent Support Expanded coverage to Asia Pacific Over 275 clients Global tax and regulatory capabilities in nearly 200 countries Office expansion to Latin America Adams Street Partners private equity investment Over 350 clients 40%+ revenue growth YoY Launched Oracle s E- Business Suite independent support Filed patent for proprietary tax, legal and regulatory system Over 450 clients Signed first seven figure deal General availability of Rimini Street Tax Engine First and only ISO-certified provider of independent support Over 550 clients Oracle new sales increase 200% YoY Launched CNC Managed Services for JDE Closed first major U.S. Federal client Over 700 clients 40% net revenue growth YoY Oracle new sales growth over 200% SAP new sales growth 165% YoY First and only ISO certified independent support provider Launched SAP BusinessObject s and Oracle Retail support Expanded footprint in APAC - launched local operations in Japan Launched standalone support for Oracle Database /Middleware and Oracle EBS Payroll Support (US & UK) Launched Rimini Street Cloud Services for Salesforce and Workday Launched and expanded Rimini Street Technology Support Services Extended guaranteed support for all software releases to 15 years 11

12 Snapshot of Rimini Street Clients Fortune 500 and Global 100 Nearly 1,000 Clients Including: - 94 Fortune Global

13 Business Impact of Independent Support

14 Total Maintenance Savings With Independent Support 14

15 Total Maintenance Savings Example Software licensees will save 1.5 times their vendor annual support fees by switching to Rimini Street Support Example: Licensee paying 200M in vendor support fees will save 300M with Rimini Street EACH AND EVERY YEAR Paying 200,000K Annual Maintenance Fees 100M 50% savings on 200M 81.8M Annualized savings by avoiding 2 upgrades over 10 years 66.7M 4.44 FTEs* 54.5M 3.64 FTEs* 303M Total savings of 1.5x 200M * 15M full loaded FTE cost 15

16 Hybrid IT Model Not Dependent Upon the ERP Vendor for Innovation BPM Mobile ERP CRM Database BPM BPM Suite Applications Analytics & BI StatSoft Worklight KonyOne Platform XenMobile MDM MDM Platform Cloud Solutions Big Data SPSS Analytics Enterprise Mobility MDM Mobility Management Apps Social Mobile Analytics Eloqua ExactTarget HCM Core Systems of Record Supply Chain Management Finance & Accounting Manufacturing Logistics Mobile Business Intelligence Worklight KonyOne CRM HCM Business Discovery Platform Source: Gartner, Develop a Strategic Road Map for Postmodern ERP in 2013 and Beyond, July 31,

17 Freeing up Funds for Innovation Client Examples

18 Kumagai Gumi Co., Ltd. Objective: Rebuild Kumagai Gumi Central Systems including applications and infrastructure. Impact of Remaining with SAP: High SAP maintenance fees Almost JPY 50,000,000 annually Paying maintenance for an older (v4.7) version out of Mainstream Maintenance since 2013 Upgrades with no must have functionality expensive upgrades with no business benefit 18

19 Rimini Street Risk Analysis Withdraw from Japan Market Product Roadmap Quality of Support Changeover Risk Rimini Street Commitment CEO Seth Ravin committed to Japan market and clients. Risk of withdrawal is low. Vendor investment in current path is low. Rimini Street commitment to scale resources. Ability to upgrade while supported by Rimini Street. 19

20 CAC Corporation Objective: Maximize Oracle E-Business Suite investment Impact of Remaining with Oracle: High Oracle maintenance fees We were paying Oracle about tens of millions of yen Unable to fund growth initiatives ~80% allocated to ongoing maintenance Potential forced upgrade to EBS 12.2 to stay on a supported version 20

21 Rimini Street Decision Factors We will NOT upgrade EBS no business value Receive premium support for existing EBS application We will receive low ROI with Oracle support Realize up to 1.5x total maintenance savings We want to lower our support and maintenance costs Redeploy resources towards strategic IT projects 21

22 Industry Recognition for Transformational Leadership Tom Grooms Vice President & CIO The Valspar Corporation 2014 Golden Bridge Awards CIO of the Year Eric Robinson Chief Information Officer Color Spot Nurseries 2014 Frost & Sullivan CIO Impact Award Alexandre Baule Chief Information Officer Embraer S.A InformationWeek Brazilian IT Executive of the Year Avoided ~ 1B in forced upgrades Saving 459M annually in Oracle maintenance Funding new roll-outs in 50+ countries Reduced SAP maintenance costs from 20% of IT budget to 9% Re-investing savings in strategic IT initiatives Cut SAP maintenance costs from 50% of IT budget to 25% Using savings to roll out global SAP implementations, strategic IT initiatives Valspar was able to reallocate a portion of its total global IT budget to growth initiatives with the stroke of a pen. We reduced our software maintenance costs from 20 percent to only 9 percent of my overall IT budget, and significantly improving the level of support we receive. Our percentage ratio of IT maintenance costs to innovative projects, which formerly was 70/30, is now 50/50. And we envision further reversing the original ratio to 30/70, putting even more money into innovation. 22

23 Nihon Rimini Street K.K.

24 Our Momentum in Japan 1. Rimini Street has launched its awardwinning Software Maintenance Service in Japan in March We bring competition to a segment of the IT market in Japan that is: a) Very large b) Very profitable for SAP and Oracle c) Completely uncompetitive until now 3. Companies in the US and Europe have benefited from Independent Software Maintenance services for over 10 years, including 94 Fortune 500 Corporations 4. Japanese companies can now also significantly benefit from this option 24

25 Getting Off The Vendor Support Treadmill Inside SAP Magazine One of the factors driving (Rimini Street s) 40% year on year growth for fiscal 2013 has been an undercurrent of dissatisfaction with increasing support costs and service levels that fail to delight. Far from deserting SAP though, for many customers, freeing up additional budget by cutting their support costs in half, typically, means they can then reinvest with SAP in other areas. - Freya Purnell, Inside SAP Magazine, March 26, 2014 Consider bringing an independent maintenance provider to the table when undertaking contract negotiations or planning application strategy. - Ray Wang, Constellation Research 25

26 Rimini Street In the News 26

27 Nihon Rimini Street Executives Mr. Kazuya Ohta Country General Manager Mr. Tomonori Oku Vice President, Service Delivery Mr. Hisamichi Nagamori Vice President, Sales 27

28 Top 5 Frequently Asked Questions 1. Is my software license contract separate from maintenance contract? 2. Can I still upgrade once I switch to Rimini Street? 3. Can I continue to add licenses or buy new products from Oracle or SAP? 4. Have there been any issues that Rimini Street can t fix? 5. What about all my tax, legal and regulatory requirements? 28

29 Next Steps: Meet with Rimini Street to Learn More Visit Rimini Street s Booth General Contact Info: Kazuya Ohta( 太 田 一 矢 ) Country General Manager( 支 社 長 ) 東 京 都 新 宿 区 西 新 宿 新 宿 パークタワーN30 階 オフィス(Office):

30 APPENDIX

31 Meet Tom Grooms, CIO, Valspar Our Main Objective: Continue Implementing Our Stable ERP As We Make Acquisitions Not Upgrade Impact of Staying on Oracle Support: No driver or ROI for upgrading ~ 1 Billion Significant business disruption ~ 24 Months Continuous implementation mode 50+ countries Highly customized environment 3 Dedicated FTEs Annual support costs extremely high ~ 300M 31

32 Freeing Up Funds to Support Valspar s Top Corporate Initiatives The example below highlights how Valspar will save 459,058,670 EACH AND EVERY YEAR for the next 10 years for a Total Maintenance Savings of 4,590,586,717 Reinvesting Savings and Driving Innovation through Analytics/BI, Master Data Management (MDM) and Pricing Initiatives Paying 312,765,000 in Oracle Annual Maintenance Fees Upgrades Customization Support Maintenance Resources 184,041, ,700,000 35,590,500 23,727,000 50% savings; annual 3% increase Estimated cost to upgrade to R12. Required to remain supported Liberated 3 customization support FTEs to deliver new functionality Liberated 2 FTEs from self support/testing to strategic work 459,058,670 Total savings annually for Valspar By partnering with Rimini Street, Valspar was able to reallocate a portion of its total global IT budget to growth initiatives with the stroke of a pen Tom Grooms, CIO 32

33 Meet Alexandre Baule, CIO, Embraer Our Main Objective: Develop on our SAP application for a long time without upgrades Impact of Staying on SAP Support: SAP Maintenance Costs >50% of IT Budget Increasing SAP maintenance and upgrade costs Strategic innovation initiatives required funding without increasing overall IT budget Supporting a heavily customized environment internally 33

34 Freeing up Funds for Global SAP Rollout and Strategic Innovation Embraer CIO, Alexandre Baulé, named IT Executive of Year for using Rimini Street to cut SAP maintenance costs to Fund Innovation Embraer reduced SAP maintenance costs from 50% of total IT budget to less than 25% Embraer can run and develop on the SAP application for long time without upgrades Enjoy Rimini Street s dedication to client service and success with more responsive and comprehensive service Transition to Rimini Street took less time than expected Free up funds for innovation and global expansion CIO of the Year Our percentage ratio of IT maintenance costs to innovative projects, which formerly was 70/30, is now 50/50. And we envision further reversing the original ratio to 30/70, putting even more money into innovation. - Alexandre Baule CIO, Embraer S.A. 34