A Risk Worth Taking

By David F. Carr  |  Posted 2006-08-15 Print this article Print

Companies are turning to third-party maintenance providers to support applications from PeopleSoft, J.D. Edwards and Siebel—the three enterprise software players recently acquired by Oracle. Here's why.

A Risk Worth Taking

Bill Leake, president of Austin, Texas-based Internet marketing firm LC Growth, says that's a risk he's willing to take. LC Growth purchased Siebel's sales force automation software earlier this year and is still covered by the vendor maintenance contract, which was included with the initial purchase. But Leake retained Rimini Street for maintenance, believing its support will help him stretch the life of the application over five to 10 years.

"With the major enterprise applications, the software is mature enough now that it's perilous to be on the absolute most recent version—because that's where all the bugs are," he says.

And Beekley Corp. of Bristol, Conn., a medical device manufacturer, is using Rimini Street as a transitional measure, as it plans to move from Siebel to Microsoft customer relationship management software.

Geris Papajani and Nick Carey of Beekly's information-technology team say they got much more attentive service from Rimini Street than they were ever able to get from Siebel, perhaps because they were a relatively small Siebel customer. Rimini Street "took care of issues that had been lingering for a long time," cleaning up the application database to make it run faster, Papajani says.

Although TomorrowNow has an obvious reason for not cannibalizing its parent company's maintenance business, that doesn't mean SAP is immune to this move toward third-party support. "Oracle, SAP or any other enterprise vendor must justify the value of their premium maintenance. If you are delivering innovation and value and can justify the premium cost, then great," says Nelson of TomorrowNow.

Besides savings, there are other factors to consider with third-party maintenance contracts.

Both TomorrowNow and Rimini Street support customizations that the enterprise has added on top of the standard product, something that's not usually provided by vendor maintenance contracts. They also patch and update the core software product; for example, they have released updates for tax and regulatory changes.

On the other hand, admits Rimini's Ravin, "The risk is that we don't have all the source code," so customers have to understand that "there are things we can fix and things we can't fix."

David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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