Oracle sues Rimini Street, alleges 'massive theft'; Is third party support dead?

Oracle sues Rimini Street, alleges 'massive theft'; Is third party support dead?

Summary: Oracle has filed a lawsuit against Rimini Street, a third party support provider, alleging "massive theft of Oracle’s software and related support materials through an illegal business model." Rimini said it will fight back.

SHARE:

Oracle has filed a lawsuit against Rimini Street, a third party support provider, alleging "massive theft of Oracle’s software and related support materials through an illegal business model."

The lawsuit names Rimini Street as well as CEO Seth Ravin. In a statement, Ravin said:

I believe Oracle’s actions are an attempt to forestall competition and limit market choices for its software licensees. Rimini Street offers valuable support options at more than a 50 percent savings compared to Oracle. Rimini Street’s services are enjoyed by hundreds of clients around the world, including Global and Fortune 500 organizations, many government agencies, and small businesses trying to grow and hire new employees in these difficult economic times. Rimini Street has been a leader in fighting for customer choice and options, and we will continue to do so.

If this Oracle-Rimini showdown sounds vaguely familiar that's because it's similar to the battle between Oracle and TomorrowNow, which used to be a third party support unit owned by SAP. See: SAP to shut down TomorrowNow; Oracle gets its sacrifice

In fact the language of the complaint (PDF download) here's the PDF in full) sounds similar. To wit:

This case is about the massive theft of Oracle’s software and related support materials through an illegal business model by Defendant Rimini Street and its CEO and President, Defendant Seth Ravin. Rimini Street holds itself out as a support provider to companies that license certain of Oracle’s enterprise software applications, including its PeopleSoft, J.D. Edwards (“JDE”) and Siebel-branded software. Central to Rimini Street’s business model is the illegal downloading of Oracle’s Software and Support Materials  in a scheme that is vast in scope, consisting of many thousands of Software and Support Materials. Rimini Street typically logs on to Oracle’s password protected Technical Support websites using a customer credential, then downloads Software and Support Materials in excess of the customer’s authorization under its license agreement. Sometimes Rimini Street will download hundreds or even thousands of Software and Support Materials at a time, relating to entire families of software (e.g., PeopleSoft, JDE, or Siebel) that the customer does not license and for which it has no use.

Oracle further alleges that Rimini Street automates massive downloading of support material with robots and crawlers. This downloading has disrupted Oracle's database. Oracle then tries to use Ravin's words mentioned in an article about the SAP-TomorrowNow lawsuit against him. Oracle continues:

Ravin has caused Rimini Street to acquire copies of its customers’ licensed Oracle enterprise applications software. In the course of its business, Rimini Street makes additional illegal copies of this software, and uses it in various illegal ways to provide its low-cost support. This illegal business model is not new for Ravin. He helped create this illegal scheme at his prior company, TomorrowNow (“SAP TN”), with his partner, Andrew Nelson. Under this business model, SAP TN gained repeated and unauthorized access to Oracle’s intellectual property. It made and used thousands of copies of Oracle’s copyrighted software applications and relied on illegal downloading from Oracle websites, using custom programmed “scraping” tools designed to “scrape” Oracle’s website for bug fixes, patches, updates and instruction manuals.

Ravin and Nelson sold SAP TN to the German software conglomerate SAP AG, and Ravin soon left to later found Rimini Street. SAP AG publicly admitted that SAP TN improperly copied Oracle Software and Support Materials, and in October 2008 shut down in SAP TN October 2008 having concluded that it could not provide support services without infringing on Oracle’s intellectual property rights.

The case goes on, but you get the idea. In the end, Oracle's suit may be enough to keep Rimini Street from landing new customers. For now, Rimini Street is doing well. Rimini has 300 customers and has doubled its employee base. The company also said 2009 revenue was up 270 percent from the year before. Oracle vs. Rimini could be quite the showdown. The stakes---the ability of enterprise customers to use third party support services---are certainly high.

Topics: Software, CXO, Oracle, SAP, IT Employment

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

29 comments
Log in or register to join the discussion
  • this is why FOSS is always better

    If Oracle and Rimini Street would use FOSS there will be no need for lawsuit.
    Linux Geek
    • If they used FOSS...

      Oracle wouldn't be a multi-billion dollar company and I doubt Rimini would even exist.

      FOSS doesn't make the same kind of money for companies.
      TylerM89
    • Except that...

      There is no FOSS equivalent of most of the software (JDEdwards, in particular) that even comes close to what these customers need.

      Even the most capable FOSS ERP, Compiere, is only marginally better than Quickbooks - it doesn't even come CLOSE to being in the same CITY (let along ball park) as JDEdwards.
      daftkey
    • FOSS is only better if...

      your entire company are geeks & have nothing better to do with their time than to support their own stuff, rather than simply do their jobs.

      FOSS is nothing more than a Utopian/socialist dream where, to paraphrase Rodney King, we all just get along. You're not living in the real world.
      ThomasRWright
    • Except, if they used FLOSS...

      They would not need the expensive support. Things would just work all of the time.

      I was asked, long ago, how Red Hat's support was, by a possible future client of theirs. I had to answer honestly. I had no idea. I had never needed to call them.

      I work on these ERP systems for a living. It is all bubble gum and bailing wire on the inside. The systems are amazingly fragile and random. The support we get, which we pay dearly for, is nearly useless. I usually fix it while waiting for a response, and point out to them the exact place where the bug is, and how to fix it. Often, my exact fix comes back to me as a patch in the next bundle of patches, but they still charge us instead of pay us, when we develop at least as many of the fixes as they give.
      grant@...
      • You don't know that...

        "They would not need the expensive support. Things would just work all of the time."

        "I was asked, long ago, how Red Hat's support was, by a possible future client of theirs. I had to answer honestly. I had no idea. I had never needed to call them."

        "I work on these ERP systems for a living. It is all bubble gum and bailing wire on the inside. The systems are amazingly fragile and random. The support we get, which we pay dearly for, is nearly useless. I usually fix it while waiting for a response, and point out to them the exact place where the bug is, and how to fix it. Often, my exact fix comes back to me as a patch in the next bundle of patches, but they still charge us instead of pay us, when we develop at least as many of the fixes as they give."

        And how do you know that FLOSS would solve your ERP woes? I'd be interested to know which Red Hat ERP system you've used that has never failed and never required a call for support.. Oh that's right.. Red Hat doesn't make ERP systems, they make servers and operating systems... which are totally not the same thing at all..

        As a programmer, you see a bunch of code, using old technology, mixed with newer technology, a bunch of in-house customizations, and you see it fail once in a while for whatever reason and call it random (it most likely isn't - I haven't found a problem that I couldn't replicate yet).. What you don't see is the implication of trying to rewrite those systems with all new technology.. It doesn't happen often, and there's a good reason..

        As a business analyst who also deals with ERP systems daily, for many different clients, with many different business needs, I can tell you, FLOSS isn't going to be a magic bullet to kill this problem.. Most programmers don't have the business knowledge to design this kind of a system - Compiere is proof of this (probably the "best" example of an Open Source ERP system, and it barely offers anything beyond what you could get out of Quickbooks... it falls HUGELY short in terms of financial reporting or even regulatory compliance)..
        daftkey
        • When the code is in the open

          People tend to be more careful about quality.

          I think the reason that there is not the FLOSS ERP yet is time. Look at the age of the open and closed systems. If you look at what the closed system had at the same age, you will probably be shocked at how bad it was.

          It will take time, but it will get there. The challenge that once the development is done, the incremental cost of the second copy is so small will change the face of software. It cannot be avoided. As for randomness, OK, not actually random, but in such obscure edge cases that would never be there if the software was written more sensibly.

          As for the value of support, what percentage of the time do they solve the issues on delivered (not custom) code? For me, it has been about 15% of the time. I fix the other 85%. Luckily they are gracious enough to send my own code back to me as an official patch, for a fee of course.
          grant@...
  • Bad orac$e

    Don't buy anything from orac$e.
    sadly2010
    • Why not?

      What's your beef with Oracle? You don't think they should have the right to their own code?
      ThomasRWright
  • Oracle will lose

    In this battle even if Oracle wins in court, it will lose on the ground. Slowly and steadily competition is winning enterprise customers from Oracle. Key competitor MS SQL is very good at relation building and uses its third party partners to proliferate into enterprise market.

    After this law suite it will become clear to enterprises that they cannot obtain reliable third party support and they may not like to lock-in with Oracle support. Thus Oracle will lose market share.
    p.vinnie@...
    • Careful - they already won a similar case..

      "In this battle even if Oracle wins in court, it will lose on the ground. Slowly and steadily competition is winning enterprise customers from Oracle. Key competitor MS SQL is very good at relation building and uses its third party partners to proliferate into enterprise market."

      Oracle has a strong third-party network as well.. The real story is about a third-party provider overstepping his authorization and allowing customers to access information that Oracle reserves for customers with a support plan.

      What Rimini Street is doing would be akin to a Microsoft partner telling customers that they don't have to renew their software assurance with Microsoft, and then using their own Partnersource account to provide customers access to Microsoft's knowledgebase and software updates. Microsoft would sue any partner at a drop of a hat for doing something like this.. As would Red Hat, Sun, or any other Enterprise software company that sells support.

      Larry isn't going to tell us this part because it takes away his ability to make Oracle appear the villain.
      daftkey
      • Don't get comparisions to MS

        Last I heard, while MS would love you to have SA, they still give patches (but not new versions) to everyone who owns the product. Also I have never heard of MS sueing anyone supporting their product (modifying yes, supporting no).

        I think the comparision isn't clear.
        schmidtd@...
        • Enterprise software, not office software..

          If you don't get the comparison, then I'm guessing you've never dealt with the Enterprise side of MS software (Dynamics, specifically).. The rules are a little bit different.

          Dynamics GP/AX/NV/SL/CRM/RMS customers generally pay for something "like" SA called an "Enhancement Plan" which entitles them to, among other things, a number of support calls to MS, access to CustomerSource (and its respective resources, knowledgebases, etc), upgrades, and other enhancements (even Service Packs, which you cannot get if you don't have an enhancement plan). You cannot purchase additional modules for software you already own if you don't have a current enhancement plan.

          For people used to the Office side of things, this seems like a pretty raw deal (and it may be), but enterprise software takes a LOT more work to develop, requires MUCH more ongoing work to maintain, is much more critical to customers (so bugs have to be fixed NOW), and has far fewer customers, so those programmers have to be paid somehow.

          Rimini was supposedly making all this available to customers without them having a valid support plan, and they were maintaining a mirror of Oracle's own knowledgebase and making it available to customers who didn't have a support plan (therefore, shouldn't have had authorization to those documents). They were then pocketing their own "support contract" revenues from these customers.
          daftkey
          • Kind of..

            SA, also entitles you to the next software version, so if you have SA on Windows or Exchange, you get Windows 7 or Exchange 2010 automatically. In many ways that is the biggest reason to buy SA. However patches and service pack are still free last I checked (after all, in theory they are just to keep your software running). We have from time to time wrung our hands over if we are better off with SA or not. Also note MS expires support on products, so they say "no more patches for X after date Y".

            True feature packs do cost extra, but these are few and far between in pratice. And again it is pretty clear what is what.

            Of course SA gives you technical support from MS also, but as I said, I have never heard of MS sueing anyone over giving technical support to their product.

            Oracle probably has a different business model than MS, so it could be that these situations don't compare 1 to 1. I suspect that is the source of confusion. Many companies ARE trying to make money by making ALL software upgrades (patches or whatever) only available through service cotnracts, MS just isn't one of them. Don't get me wrong, I am sure MS would love for every customer to be on SA, they just don't require it.

            Which model will win out? Well I guess we will find out.
            schmidtd@...
          • You still don't get it..

            "However patches and service pack are still free last I checked (after all, in theory they are just to keep your software running). We have from time to time wrung our hands over if we are better off with SA or not. Also note MS expires support on products, so they say "no more patches for X after date Y"".

            Again, I'm not talking about Software Assurance, and I'm not talking about Microsoft's office products. Exchange and Windows are not enterprise software, they are licensed the same way as Office is licensed, more or less.

            To compare Microsoft to Oracle in the context of this discussion you have to look at Microsoft's Dynamics product lines and how they're sold and licensed - it's much different than Windows, Office, and Exchange. Service packs are not installed routinely, and they are not available to customers without an enhancement plan. As a result, there are very few Dynamics customers who let their enhancement plans lapse.

            Also, both Microsoft and Oracle are normally seen by their customers as the SECOND stop for support - in both cases, customers are usually partnered with a consultant who sell, implements, and supports the software. In most cases, this partner files the support request on the customer's behalf.

            "Of course SA gives you technical support from MS also, but as I said, I have never heard of MS sueing anyone over giving technical support to their product."

            Well, I've never heard of a Microsoft partner logging into Partnersource, downloading all the training materials, techknowledge materials, customized reports, toolkits, and other software, and then telling their customers that they don't have to renew their enhancement plans with Microsoft because they have all that information available from their own support portal. You know that "Massive theft" Oracle is alleging - this is the main part of it.

            You can bet your behind, however, if a Microsoft partner tried to pull what Rimini Street was allegedly doing, they would be sued back to Fargo in a heartbeat.
            daftkey
          • Where is Oracles free online knowledgebase?

            Well, I have to admit I hadn't heard of MS Dynamics (SQL, Exchange, Office, Sharepoint, Server, Windows mostly)

            Still when I go to http://support.microsoft.com/ and type in Dynamics I get lots of technical articles on Dynamics. When I go to the Oracle site, I am asked to log on. Is it also free if I just make an account? If so why did Rimini need to bother to download it? Why would anyone web crawl a free online resourse and why would MS care if they did?

            Look MS isn't a saint, and Oracle isn't the only company that makes you pay for support and access to the knowledge base. But Oracle and MS just don't have the same business model.
            schmidtd@...
    • Not likely...

      Actually, Oracle has been gaining market share. MS SQL really isn't much competition at all.
      ThomasRWright
  • Interesting...

    This one will be interesting to watch.

    If this case is decided in Oracle's favor, it could send a shockwave throughout the entire third-party support industry.

    If this case is decided in Rimini's favor, Oracle will have simply advertised the fact that Rimini offers support at a lower cost. Although this will likely kill many deals Rimini has in the pipeline currently.
    cue.burn@...
  • RE: Oracle sues Rimini Street, alleges 'massive theft'; Is third party support dead?

    We have been telling clients for years that Oracle has a 'bullet proof' lock on this support business due to their contractual language that prevents 3rd parties from providing this level of support without active (and paid for) CSIs. Surprisingly executives were not skeptical at this 'too good to be true' offer from Rimini Street. Being in the contracts business, we see this as a case Oracle will not lose. There are indeed options for reducing the cost of Oracle annual support, but 3rd parties such as Rimini are not one of them. Eliot Arlo Colon, President, Miro Consulting, Inc. www.miroconsulting.com
    eliotcolon
  • RE: Oracle sues Rimini Street, alleges 'massive theft'; Is third party supp

    I've seen companies that had the wrong version of
    Oracle, running Enterprise Edition, even though they
    used not a single feature of EE edition. And I know
    from first hand experience how Oracle prevents these
    companies from downgrading.

    But, that is one of the legitimate options for
    reducing support costs - dramatically. Purchase and
    use, the correct edition for your needs.

    A much longer term goal should be to not use Oracle
    software at all. I know that is, in many cases, a
    long term goal, but if you haven't yet bought Oracle -
    think twice about it.
    rdupuy11