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Expect a new wave of third-party SAP support providers, expert says

Todd Morrison

Rimini Street probably will prevail in its legal battles with Oracle Corp., and that victory will inspire a wave of companies -- including large systems integrators

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like Accenture PLC and IBM -- to begin competing in the lucrative third-party SAP support market, according to the predictions of one IT industry analyst.

"I suspect it'll be resolved in Rimini Street's favor, but they may have to change some of the processes in terms of how they internally work. I think it will [help further] validate the market," said Mark Bartrick, an analyst with Cambridge, Mass.-based Forrester Research Inc.

A Rimini Street defeat of Oracle also will mean more options for businesses interested in cutting their SAP support and maintenance costs by going with a third-party support vendor.

Oracle filed a lawsuit against third-party support and maintenance provider Rimini Street in 2010, alleging that the company had downloaded "illegal copies" of Oracle software and related documentation on behalf of its customers. Oracle claims that Rimini Street also could be stockpiling the downloaded software in a single repository that could be shared with its other customers, according to Bartrick.

Rimini Street has denied any wrongdoing, claiming it only downloaded software that its customers were legally entitled to receive. Rimini Street has countersued Oracle, claiming libel, among other charges.

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Neither Oracle nor SAP, however, has challenged the right of companies like Rimini Street to provide third-party maintenance, Bartrick said. He expects the court case to be resolved one way or another by later this year, or early in 2013 at the latest.

A resolution of the court case in Rimini Street's favor will serve as the cue for more companies to enter the third-party SAP support market, Bartrick said. Big players – perhaps the likes of IBM, Accenture or any of the major players on the services side -- will find the third-party support market too lucrative to pass up once those legal challenges are cleared up, he said. That would result in a second wave of third-party providers on top of the first wave of entrants that now includes Rimini Street and more recently, Spinnaker Support LLC.

Others aren't so sure about whether more companies will enter the third-party support market. "Maybe," said Cindy Jutras, principal at Mint Jutras LLC, a business applications consulting company based in Windham, N.H. "But I wouldn't put any money on it."

Companies that are using SAP support only for bug fixes and software updates might want to consider going with a third-party support provider, Jutras said. Switching to one of these providers simply to cut costs probably isn't a good idea, however, she said. And organizations considering switching just to cut costs probably would be better off negotiating a better support contract with SAP, she added.

"The problem is that companies don't take advantage of the value [of SAP's support offerings] and they don't understand what's possible," she said.

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