How to Cut SAP and Oracle Maintenance Costs to Fund Innovation

Transcription

How to Cut SAP and Oracle Maintenance Costs to
Fund Innovation
Seth Ravin
Chief Executive Officer
Rimini Street, Inc.
Gartner Enterprise Application & Architecture Summit 2014
Tokyo, Japan
Discussion Today
Current State of Enterprise Software
You Now Have a Choice
Business Impact of Independent Support
Freeing Up Funds for Innovation – Client Examples
Nihon Rimini Street K.K.
Discussions – Q&A
2
Gartner Japan Enterprise Application ＆ Architecture Summit 2014
Property of Rimini Street ©2014 | Proprietary and Confidential
Forward-Looking Statements
This presentation may contain forward-looking statements. The words
“believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,”
and similar expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to risks and uncertainties, and
are based on various assumptions. If the risks materialize or our assumptions
prove incorrect, actual results could differ materially from the results implied by
these forward-looking statements. Rimini Street assumes no obligation to
update any forward-looking statements or information, which speak only as of
the date of this presentation.
3
Current State of Enterprise Software Market
Overview of SAP and Oracle Software
Maintenance in Japan
License to use software
(example)
Japanese
“Company
A”
¥100M investment
¥22M per year (~22%)
Annual ‘Maintenance’ service
All Japanese
Companies
Today
and
Annual ‘Maintenance’ service
¥120B (1) per year (~22%)
VERY SIGNIFICANT INCOME STREAM FOR SAP AND ORACLE.
VERY SIGNIFICANT COST FOR JAPANESE COMPANIES.
NO COMPETITION UNTIL NOW.
(1) - Oracle Corporate Japan annual report FY2013 reported Software License Update and Product Support Revenue at ¥67B
- SAP’s annual report for FY2012 reported total SAP revenue for Japan at €754B,. If we assume that maintenance is 50% of SAP Japan’s revenue & 1EUR
= 140JPY then estimated maintenance revenue for SAP Japan is therefore ¥53B
5
The Enterprise Software World Has Changed
Full-featured
Stable Software
00’S
Costly Forced
upgrades
Lack of Innovation
from ERP
10’S
90’S
80’S
Expensive,
Low Value
Maintenance Fees
Service
Dissatisfaction
59%
92%(1)
Profit
Margin
(2)
Dissatisfied
(1) Oracle Corporation, Financial report for Six Months ended 30 November 2014:
Software License Updates and Product Support: US$8,948M Revenue
Software License Updates and Product Support: US$ 573M Operating Expenses
Software License Updates and Product Support: US$8,375M Operating Profit (i.e. 93.5%)
http://investor.oracle.com/financial-reporting/quarterly-reports/default.aspx
6
Service Irrelevance
Add-on
development
issues
Vanilla
code issues
(2) “Oracle Application Customer Satisfaction, Attitudes, and Plan”
Computer Economics Special Report. Nov 2010. 59% expressed
dissatisfaction with the Cost of Support from Oracle.
High Operational and Maintenance Costs
Limit Innovation
Gartner IT Key Metrics Data 2014
Capital
Operational
29%
71%
The total capitalized IT spending for the
fiscal year (that is, the full value of
capitalized assets acquired in the fiscal
year). This includes investments
in new application development
and IT infrastructure.
The total
day-to-day
operations and maintenance
expenses for this fiscal year that
have not been capitalized. These do
not include any amortization and
depreciation expenses.
Source: Gartner, "IT Key Metrics Data 2014: Key Industry Measures: Cross Industry Analysis: Current
Year" Jamie K. Guevara, Linda Hall, Eric Stegman, 16 December 2013
7
A New Maintenance Support Model is Needed
Traditional
8
Independent Support
Focus
Vendor-Centric
Client-Centric
Cost Model
90% Margins
50% Savings
Support
Coverage
Vanilla Software Only
‘Add-On’ Development and Vanilla
Delivery Model
Book Trained Help Desk
Experienced Engineers Assigned to Each Other
Upgrades
Forced Upgrades
Upgrade When Ready
Innovation
Vendor Only
Vendor and Leading-Edge Options
Flexibility
Vendor Lock-In
Keep Options Open
You Now Have a Choice
Rimini Street – Summary
•
Rimini Street replaces the annual software
maintenance service of SAP and Oracle
Our price is 50% off what is currently paid to SAP or
Oracle per annum
We support old and new versions of the software
for up to 15 years. Our customers are not forced to
upgrade
We provide Tax, Legal and Regulatory updates
across 200 countries including Japan
Our service includes support for add-on
developments
Our service is ISO certified and ultra-responsive,
including a named Primary Support Engineer and
quick 24/7 call-backs
•
•
•
•
•
Rimini Street Named
"Cool Vendor" by
Gartner
“Cool Vendors in Infrastructure
Services, 2011” by Bob Igou,
Pat Phelan et al. 12 April 2011
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors
with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact.
Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
10
Rimini Street Supported Products
•
•
Product Lines: ALL
Releases: 5.x, 6.0.x, 6.3.x, 7.0.x, 7.5.x, 7.7.x, 7.8.x, and 8.x
•
•
Product Lines: HCM, FIN, CRM, EPM, SRM, SCM, Public Sector, and Campus Solutions
Releases: 7.x, 8.x, and 9.x
•
•
Product Lines: HCM, Financials, Distribution and Manufacturing
Releases: ALL
•
•
Product Lines: ALL
Releases: 10.7 and later
•
•
Product Lines: ALL
All releases certified in conjunction with supported applications
•
Oracle Hyperion Planning, Oracle Essbase, Oracle Hyperion Financial Management, Oracle
Hyperion Financial Close Management, Oracle Hyperion Strategic Finance and Oracle Financial
Management Analytics
•
Product Lines: Merchandising Operations Management, Merchandising Planning and
Optimization, and Supply Chain Planning and Execution
Releases: 10.x and Later Releases
•
•
•
Product Lines: ALL
Releases SAP ECC 6.0 and earlier, BW 3.5, SAP Business Suite - including BI7, SCM, CRM,
EWM, PLM, and GTS
•
Product Lines: BusinessObjects Enterprise, Advanced Analysis, Interactive Analysis (Web
Intelligence), Explorer, Dashboard Design (Xcelsius) and Crystal Reports
Releases: BusinessObjects 6 and later releases
•
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Support Comparison Overview
Standard Support Program Feature
Rimini Street
Vendor
Named, Regional Primary Support Engineer for Each Client
Named, Global Account Manager for Each Client
24/7 Support with Guaranteed 30 Minutes or Less Response
Global Tax, Legal and Regulatory Updates
Installation & Upgrade Process Support
Configuration Support
Operational Support
Application & Repository Fixes
Documentation Fixes
Fixes for “Add-on” Developments
Performance Support
Interoperability Support
50% Annual Cost Savings
Flexible Coverage Periods & Payment Terms
12
Value & Client Success Drive Growth
IT Vendor
of the Year
Top 12 Most Disruptive
Enterprise IT Vendors
•Over 500 clients
20 Companies to
Watch in 2012
• 40% Revenue
growth YoY
• Over 400 clients
• Rimini Street
founded
• Introduced
third support
for Siebel
• Introduced
• Expanded
Independent
coverage to
Support for
Canada
PeopleSoft and and Europe
JD Edwards
• Over 150 clients • Global tax and
regulatory
• Launched SAP capabilities
support
in nearly 200
countries
• Expanded
coverage
• Office expansion
to Asia Pacific
to Latin America
• 40%+ revenue
growth
• Launched Oracle’s
E-Business Suite
application support
• Filed patent
for proprietary
tax, legal and
regulatory system
• Signed first seven
figure deal
• General availability
of Rimini Street
Tax Engine
• First and only ISOcertified provider of
global third-party
enterprise software
support services
• Oracle new sales
increase 200%
YoY
• Launched CNC
Managed
Services for JDE
• Closed first major
U.S. Federal
client
• Oracle new sales
growth over 200%
• SAP new sales
growth 165% YoY
• First and only ISO
27001 certified
independent
support provider
• Launched SAP
BusinessObjects
and Oracle Retail
support
• Adams Street
Partners private
equity investment
Disclaimer: Source: Gartner, “Cool Vendors in Infrastructure Services, 2011” by Bob Igou, Pat Phelan et al. 12 April 2011
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications
consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties
of merchantability or fitness for a particular purpose.
13
Snapshot of Rimini Street Clients
Fortune 500 and 100
Over 500 Clients
Including:
• 49 of Fortune 500
• 10 of the Fortune 100
14
Business Impact of Independent Support
Total Maintenance Savings With Independent
Support
16
Total Maintenance Savings Example
•
•
Software licensees will save 1.5 times their vendor annual support fees by switching to
Rimini Street Support
Example: Licensee paying ¥200M in vendor support fees will save ¥300M with Rimini
Street EACH AND EVERY YEAR
Paying ¥200,000K Annual Maintenance Fees
¥100M
• 50% savings on ¥ 200M
¥81.8M
• Annualized savings by avoiding 2
upgrades over 10 years
¥66.7M
• 4.44 FTEs*
¥54.5M
• 3.64 FTEs*
¥303M
• Total savings of 1.5x ¥ 200M
* ¥ 15M full loaded FTE cost
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Innovate Around the Edges, Not Through
ERP Upgrades
“Despite hundreds of billions of
wasted on failed R&D
projects, most market
influencers would agree that
enterprise software vendors
have produced a dearth of
innovation over the past
decade…Innovation came
from the consumer tech side
and next-generation solution
providers.”
Mobile
Apps
Open
Source
SaaS
ERP
System
– Ray Wang, SoftwareInsider
Industry
Apps
18
BI
Freeing up Funds for Innovation
Client Examples
Freeing Up Funds for Innovation and Global
Expansion - Embraer
Embraer CIO, Alexandre Baulé, named IT Executive of
Year for using Rimini Street to Cut SAP Maintenance
Costs to Fund Innovation
•
•
•
Reduced SAP maintenance costs from 50% of total IT
budget to less than 25%
Embraer can run and develop on the SAP application for
long time without upgrades
Freed up funds for innovation and global expansion
CIO of the Year - 2013
“Nearly three quarters of our IT budget was devoted simply to keeping things
running, but at the same time we were experiencing a huge pressure for
innovation and growth. We had to figure out how to turn the situation around,
and we ended up investigating independent support from Rimini Street.”
– Alexandre Baulé, Embraer CIO
20
Gaining Upgrade Flexibility and Freeing
Funds for Innovation – Valspar
Choosing Independent support for its ERP application is enabling Valspar
to generate significant savings from its annual support costs and reallocate
a portion of its total global IT budget to focus on strategic growth initiatives.
“By partnering with Rimini Street, Valspar was able to reallocate a portion
of its total global IT budget to growth initiatives with the stroke of a pen”
– Tom Grooms, vice president and chief information officer of Valspar
21
“Gartner has seen an increased awareness and interest in thirdparty support options for SAP, which can be leveraged to reduce
maintenance and support costs.”
– Alexa Bona, Gartner Research, Inc. June 14, 2013*
Disclaimer;
*Source: "Leverage Key Trends Impacting SAP Maintenance and Support Costs to Negotiate Better Deals," Gartner Research, Inc., June 14, 2013
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings.
Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or
implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
22
“Customers can save millions of dollars if they have a viable third
party alternative to applications support and can postpone the
move to Fusion. This is a huge opportunity for Rimini Street and
massive problem for Oracle.”
– Peter Goldmacher, Analyst, Cowen and Company, October 19, 2010
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“…Firms like Rimini Street argue with some justification that
enterprise software users are so over a barrel financially to the big
vendors that they have little budget left over for innovation and
experimentation.”
– Larry Dignan, ZDNet, April 23, 2013
24
Our Announcement on 6 March, 2014
1. Rimini Street has launched its award
winning Software Maintenance
Service in Japan
2. This announcement is significant
because it brings competition to a
segment of the IT market in Japan that
is:
a)
b)
c)
Very large
Very profitable for SAP and Oracle
Completely uncompetitive until now
3. Companies in the US and Europe
have benefited from Independent
Software Maintenance services for
over 9 years, including 49 Fortune 500
Corporations.
4. Japanese companies can now also
significantly benefit from this option.
26
Rimini Street In the News
27
Nihon Rimini Street – Executives
Mr. Kazuya Ohta
Country General Manager
Mr. Tomonori Oku
Vice President,
Service Delivery
28
Mr. Hisamichi Nagamori
Vice President,
Sales
Established
July 2013
Ownership
100% owned by Rimini Street, Inc.
Location
Shinjuku Park Tower N30th Floor
3-7-1 Nishi Shinjuku, Shinjuku-Ku
Tokyo 163-1030 Japan
Services offered in Japan Full range of Rimini Street services
Language
Japanese language support in Japan, backed by a 24/7
global consultant team in: USA, Brazil, Australia, India,
Germany and UK
Customers
• 3 local contracts signed in Japan last quarter (1 SAP, 2
Oracle)
• 7 Japanese multinational customers including: Pioneer
Electronics (USA) and SEGA of America, Inc.
• Over 50 clients in the Asia-Pacific Region
• Over 500 clients worldwide, including
49 of Fortune 500 companies
Engagement model
Direct, via SI, or side-by-side with SI
People
Local team in Japan, over 400 employees globally
29
Questions
& Answers
Visit Rimini Street’s
Exhibit Booth
General Contact Info:
Kazuya Ohta（太田一矢）
Country General Manager（支社長）
〒163-1030
東京都新宿区西新宿3-7-1
新宿パークタワーN30階
携帯(Mobile): +81 90-1434-0555
オフィス(Office): +81 3-5326-3461

How to Cut SAP and Oracle Maintenance Costs to Fund Innovation

Transcription

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