Third party maintenance provider Rimini Street closed out 2011 breaking all previous records for revenue, deferred revenue, bookings and number of customers. By the numbers:
- In the last quarter, it completed 28 transactions valued at $110 million in sales bookings, an increase of 126% year over year.
- For the full year, sales booking backlog increased from $220 million to $394 million, an uplift of 79% year over year.
- Annual revenue as measured by normal accounting principles was north of $33 million, 32% higher than 2010.
- Fourth quarter revenue stood at a quarterly record of $9 million, a 29% increase year over year.
- Deferred revenue increased 36% year over year.
- The average contract term increased to 15 years
- Average sales price increased 86% year over year.
The company claims to have taken market share from all major Oracle lines i.e. JD Edwards, PeopleSoft and Oracle along with some traction coming from SAP customers.
Even though Rimini Street remains a minnow in the scale of things, it is that $394 million in long term booking backlog that catches the eye. As it says in the press release, those kinds of number provide the basis for building a very stable business.
Viewed from another angle, you can also argue that it provides a lens into the value of relatively stable ERP environments where customers do not anticipate upgrading significantly for a long time to come. This is bound to put pressure on the mega vendors in the long run.
Right now, SAP and Oracle in particular can only look on and wonder what the total impact on their business will be. Rimini Street is clearly able to run a fast growing business at half the cost to the customer that they want to charge. Perversely and absent of clear migration strategies for better systems, Rimini Street becomes the unintended beneficiary of the mega vendors' insistence on Bollinger champagne pricing in the maintenance revenue stream.
But Rimini Street is only one of many potential suitors for the mega vendor customer wallet. Much rides on whether the company successfully defends the Oracle lawsuit. We expect to see the first court skirmishes later this year, in what will be a long drawn out battle.
See also: Rimini Street posts record results (2010)