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Third-party Oracle application support continues to grow in popularity

Mark Fontecchio

El Camino Hospital is a PeopleSoft shop through and through, running about 14 different applications including accounts payable, personnel and payroll. But at some point, getting third-party Oracle application support made sense from a financial perspective.

“While we were happy with the software, we were challenged with the cost of support,” CIO Greg Walton said. “We decided that we could get quality support and save money and absorb risk” by going with a third party.

Walton’s story is becoming more common. According to a recent SearchOracle.com reader survey, 43% of the 438 respondents use third-party Oracle support services. That is about the same as the 44% who use My Oracle support.

Those results are bolstered by a report earlier this year from analyst R. “Ray” Wang showing a

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114% increase in the interest for third-party maintenance services from Q3 2009 to Q1 2010. Further, Wang’s research found that 92% of end users were considering third-party Oracle support in the first quarter of this year, far above the numbers for SAP, IBM and others.

Cost was the No. 1 reason cited.

“Budgets continue to be flat or have been reduced,” Wang wrote. “Organizations must do more with less. Add pressures to innovate, [and] CIOs must find fat without trimming bone.”

El Camino Hospital chose Rimini Street as its support vendor, but Walton had to be convinced. At a previous job, he oversaw a big Oracle shop. And he said he always thought that one should get support from the company that sells the product.

But benefits that are “in the neighborhood of 50% savings” were just too good to pass up. Oracle has notoriously high 22% support and maintenance fees, and Walton was looking for places to save money. He didn’t know how support costs changed after Oracle acquired PeopleSoft in 2005. All he knew was that when he arrived at El Camino almost three years ago, they were high.

So the hospital started looking at third-party Oracle support options, and Rimini Street came to the forefront. Walton found other health care companies that used Rimini Street for support of their Oracle software, and received positive feedback. So he went with it.

“I don’t want to bash Oracle because I think they’re a good company,” Walton said. “But the technical team has been very pleased [with Rimini]. They’ve gone through instances of all shapes and sizes that you go through with any software product.”

In some cases, Oracle is ferociously fighting back against third-party Oracle support companies. It is currently embroiled in a lawsuit with Rimini Street, with Oracle claiming Rimini stole intellectual property from Oracle and Rimini claiming anticompetitive practices on the part of Oracle. Oracle also filed a legal complaint against TomorrowNow -- now owned by SAP -- for similar perceived theft. Despite SAP closing the books on TomorrowNow two years ago, Oracle still seems poised to litigate the claim against SAP.

Mark Fontecchio can be reached at mfontecchio@techtarget.com.


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