Rimini Street to Oracle: enough is enough

Summary:It's been a long time a-coming but Rimini Street has finally had enough of what it sees as Oracle's attempts at reducing competition in the enterprise applications maintenance after market. Rimini Street's position is perhaps best summed up in the opening statements it makes in a motion to dismiss:"Oracle’s Complaint “throws in everything but the kitchen sink.

It's been a long time a-coming but Rimini Street has finally had enough of what it sees as Oracle's attempts at reducing competition in the enterprise applications maintenance after market. Rimini Street's position is perhaps best summed up in the opening statements it makes in a motion to dismiss:

"Oracle’s Complaint “throws in everything but the kitchen sink.” Beyond a thinly pled copyright infringement claim, Oracle tacks on a dozen additional claims, including that Rimini Street has violated the Computer Fraud and Abuse Act, violated the California Computer Data Access and Fraud Act, violated Nevada Rev. Stat. 205.4765, committed breach of contract, induced breach of contract, intentionally interfered with prospective economic advantage, negligently interfered with prospective economic advantage, committed unfair competition, committed trespass to chattels, has been unjustly enriched, has committed unfair practices, and a claim for an accounting. Yet, not one of these add-on claims identify sufficient facts to “plausibly suggest[] that the pleader is entitled to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007).

This case should be determined on the merits, not by the ability of Oracle to use the process to bury Rimini Street. To that end, the Court’s control over this litigation, even at this early stage, is critical."

Long story short - Rimini Street is saying that Oracle is playing the legal bully while Oracle accuses it of theft. Having trawled through the three court documents I get Rimini's point of view. I'm no lawyer so anything I say on that front should be taken with the sack of salt it deserves. However, in its counterclaim, Rimini Street makes powerful points, most of which are laid out in the extensive press release issued this morning:

  • Each client authorizes Rimini Street to perform work on its behalf

  • Rimini Street only delivers Oracle software and support materials to each client who is entitled to receive such materials

  • Rimini Street uses separate data “silos” for each client and has policies against co-mingling data

  • Rimini Street is authorized by its clients to possess and use copies of their Oracle licensed products to provide services to them, just like IBM, AT&T, Accenture, CedarCrestone and virtually every other hosting service provider working with copies of their client’s licensed products

Whether Rimini Street prevails or otherwise is a moot point. At worst, Oracle can effectively put them out of business for a short period. But if, as it claims, Rimini Street is growing at the rate it says, then what happens in a post nuked company situation. Does Oracle think that will be the end of it? Does it think that customers who presumably have been happy with Rimini Street's offering are going to simply say: 'Gee Thanks Oracle, now I'll pay double.' It's not going to happen. Those customers are with Rimini Street for a reason. Better value for money.

In an email reply, Oracle said to me that: "Oracle is committed to customer choice and vigorous competition, but draws the line with any company, big or small, that steals its intellectual property. The massive theft that Rimini and Mr. Ravin engaged in is not healthy competition.  We will prove this in court." Oracle chose not to elaborate on this point. I find that hard to parse against earlier quotes from Juergen Rottler, executive vice president of Oracle global customer services:

Rimini Street's success doesn't sit well with Oracle. "We believe we should be the ones to support our customers," Rottler said. "We need to make this a lot more compelling than it was in the past for some customers"...

Oracle is gearing up to protect its turf. "If you're a third-party support provider offering multivendor support, we're coming," Rottler said. "We're coming."

From where I am sitting you can't have it both ways. Either Oracle provides best value for money or it doesn't. Either it accepts marketplace competition or it doesn't. If it is not providing best value in some cases then where is the harm in companies like Rimini Street offering a lower cost alternative? Along with colleagues, I caught up with Seth Ravin, CEO Rimini Street. He says: "The story Oracle is laying out has troubling components. I point out that industry access to information by the likes of AT&T and others is not really any different to what we have so where's the problem? There seems to be a special set of rules they want to apply to Rimini Street."

One concern for customers must be the extent to which Rimini Street is able to withstand Oracle's legal muscle. Ravin counters: "We've budgeted for this. Customers are very happy that we are fighting this battle and yes, some deals have fallen off the table because no-one wants their vendor in litigation."

Asked what happens should Rimini Street lose this landmark case, Ravin responds: "We will adjust the business according to whatever the rules of the road end up being. The customer demand won't go away when you've got one company turning 90% plus profits from this line of business."

Oracle's main thrust seems to be one of insisting that Rimini Street has stolen Oracle IP. Ravin is having none of that argument: "The idea of theft is a ridiculous concept. This isn't a clean room world we're talking about. We've laid out how we do things, we believe we're defining best practices and we've done the background work to prove it. If Oracle thinks otherwise then fine but they have to be sure that all they're able to prove is protection of IP and no more. They can't take actions that go beyond protecting IP."

In listening to Seth Ravin, it is clear this is one company that's not going to take Oracle's lawsuit and suck it up. Rimini Street believes it is defining a better way to offer maintenance that is profitable but without taking more than is reasonable from the customer. It has chosen to fight this one out by transparently showing its hand and drawing in those who are willing to listen.

Much is riding on this. If Oracle wins then the third party maintenance market will take a knock but will find other ways to serve customers. It will be a temporary setback. If Rimini Street wins, then Oracle's business model is blown apart. That's because the IBMs, Accentures and a dozen others will use the case as their way of redefining the maintenance market. Either way and in the long term: Oracle loses.

Right now we're at the posturing stage. When customers speak openly about why they are using alternatives then we will start to see a different complexion to this story.

Topics: Oracle

About

Dennis Howlett has been providing comment and analysis on enterprise software since 1991 in a variety of European trade and professional journals including CFO Magazine, The Economist and Information Week. Today, apart from being a full time blogger on innovation for professional services organisations, he is a founding member of Enterpri... Full Bio

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