Rimini Street has announced the global expansion of its tax and regulatory compliance services to more than 100 countries, beefing up its expertise in the process with the appointment of Greg Prowe as group vice president, global tax and regulatory strategy and research.
From the release: “Greg brings the perfect blend of international tax and regulatory expertise and deep business experience, making him uniquely qualified to lead the global expansion of our tax and regulatory offering,” said Seth Ravin, president and CEO, Rimini Street. “Rimini Street already serves clients around the world, and the expansion of our tax and regulatory coverage under Greg’s leadership will allow Rimini Street to build on its momentum as the leading third-party support provider for clients operating anywhere in the world."
I caught up with Mr Ravin to discuss what this means and why Rimini Street is making this move: "If you look at the maintenance terms provided by the big vendors they come down to pretty much two lines - we provide you with support. What we're doing is making sure customers understand the full range of support services they need and how we provide that. There's a long check list of items that right now customers have to go figure what they need to deal with and what the vendor is going to supply. We don't think that leads to good value for your maintenance dollar."
Rimini Street claims it is seeing a sea change in the way companies are prepared to contract for support services: "We are now seeing what you'd call very conservative Fortune 500 type companies coming and recognizing they have mature systems they want maintained but they know a new way of keeping a GL isn't going to make a difference. They see the 91%, monopolistic margins the software vendor is getting and are saying they don't want to pay for it. It makes doing other things that add value much more difficult, especially in this economic environment," said Mr Ravin.
It is hard to argue against that given the outcry we have seen over maintenance in the last year or so but I wondered whether companies like Rimini Street really can compete when the incumbent can always market itself as the established 'safe pair of hands': "Contrary to what everyone thought, SAP EC6 support is our fastest growing line of business. SAP hasn't understood that even if you break it up into small pieces, customers don't want to pay. Right now SAP is 20% of our leads volume and we think it will dwarf our Oracle business over time," said Mr Ravin.
But that still begs the question whether companies like Rimini Street can build a strong business the market generally can trust. "We're relatively small right now for sure but if you look at our average deal, we're signing companies up for five years. The majority of our deals are for 10 years because these companies understand they have a stable product, yes it needs support, but they want it at a price that makes sense. I think in taking this aggressive step, we're signaling that you can have a higher quality of support that is delivered at the right time to market and at a cost that makes customers like but without locking them in. We're not increasing our prices but hopefully delivering more value to the market."
It is perhaps a sign of maturity that just four years into its existence, Rimini Street is providing support for 18 European countries, has a footprint in China and is talking about South America. It is expanding its physical presence in Europe and is in the process of hiring key personnel.