- Oracle has leveled some heavy criticisms at Rimini Street.
- We review the accuracy of these critiques.
Oracle has a page on their site, which heavily criticizes Rimini Street.
Let us review these claims by Oracle to see which hold up and which don’t.
Oracle’s Comparison Sheet
Oracle Stands Behind 40 Years of Providing Uncompromising Support?
Oracle’s support is not the support that it once was. Oracle has been stripping costs out of its support for at least 15 years.
Oracle Has the People Processes and Technology to Help Safeguard Your Vital Business Interests?
Oracle’s staffing of their support does not support this statement. Oracle treats its support as the company’s primary margin center. In fact, without Oracle’s support margins, Oracle essentially becomes a weak company financially. This is explained in the following quotations from Seeking Alpha.
“Oracle derives 52% of its revenues from maintenance. Those revenues have operating margins of 94%. The cloud accounts for 8% of revenues and has gross margins (gross not operating) of 48%.
Indeed, the maintenance revenue that Oracle derives from its installed database software is by far the largest profit contributor to the company.
Investors may not realize the extent to which Oracle relies on maintenance revenues for both its top line and more important its very high level of operating margins. By one calculation, Oracle’s support operating margins constitute more than 100% of the company’s operating profit.”
Oracle’s financial health is currently centered around its ability to get its customers to hander over support renewals. This is why even the small bite taken by Rimini Street is a cause for concern by Oracle.
Oracle Offers Efficient Risk Resistant…..Innovative Upgrades?
Oracle offers upgrades. But the question is, what are they worth to customers? In the application space, Oracle has done little innovating with its application acquisitions. The value of these upgrades is low. In the database space, previous versions of databases usually are all that companies need. There is little compelling argument for requiring Oracle upgrades. Rimini Street does have a management process for dealing with upgrades. The upgrade is not applied, but any issues arising from an upgrade are managed.
Brightwork has a similar position with Oracle, as we have with SAP. In both cases, the vendors only have a few good or differentiated products. For SAP, this is the ERP system, and for Oracle, this is the database. For example, SAP has over 315 products, but outside of ERP, there is no SAP product that can be said actually to be superior to other products. With Oracle, once outside of the Oracle database, no Oracle product does not have a better competitor in that space. In many cases, most of the competitors in the space are superior to the Oracle or SAP entry. The problem is that while SAP or Oracle will sometimes purchase leading applications, as time passes, those applications have fallen in relative capability as well as value as both SAP and Oracle increase the prices of those products they acquire. And neither vendor has shown the ability to improve their acquisitions. This is the strategy of non-innovative companies. It is why Oracle and SAP operate more as holding companies than technology companies.
- The combination of high prices for the products of each company, along with the support overhead dramatically draw down the value of Oracle and SAP ownership.
- Neither SAP nor Oracle competes based on product competitiveness outside of their single products. Instead, they use salesmanship and the established account relationship to push more and more products into their customers.
The more products that a customer purchases beyond the core strength of Oracle or SAP, the lower the value of the later purchases. Saving money on support allows SAP and Oracle customer to re-allocate those funds to better software purchases. Consistently paying very high margin support to SAP and Oracle consumes funds that will always be better allocated for other purposes. The situation is explained by Ahmed Azmi.
“The 22% is maintenance AND support. The customers are paying for maintenance (upgrades) already but they are not getting what they pay for because Oracle products don’t get any innovation after being acquired. The proof is that the overwhelming majority of Oracle customers run older versions of DB and apps. Partly because the new versions offer no added value and partly because the costs of upgrades are way to high to justify the business value.
In short, most of the 22%+ is wasted”
Furthermore, the 22% number is the base level of support. Other areas of support increase this figure.
This fits into a long term conclusion that we have come to, which is that many vendors entirely exaggerate their level of innovation to justify high prices. Furthermore, beyond having low levels of innovation, vendors like SAP and Oracle, along with their partners, actually keep innovation out of their customers, as we covered in the article How SAP IT Consultancies Keep SaaS and Cloud Innovation Out of Their Clients.
A Court Found that Rimini Street Built its Business on Infringement and Misuse of Oracle Software?
The court case between Oracle and Rimini Street has gone back and forth, but if this is as Oracle says, why is Rimini Street still supporting Oracle implementations? Oracle places things that it prefers to be true in its licensing agreements, but that does not make it necessarily legal. The Oracle database license contains a clause that prevents the publication of benchmarking results. However, there is no reason why this would be legal. There seems no logical support for why a third party cannot support the software of any vendor.
- Notice what Oracle does when they have no competition for their support? We end up with 90%+ margins.
- The support margins of Oracle and SAP are all the arguments needed to support third-party support.
- We previously wrote an article that observed the nearly identical margins between SAP and Oracle support margins and the margins of Pablo Escobar How do SAP and Oracle’s Support Profit Margins Compare to Pablo Escobar? Several SAP resources stated that the comparison was offensive? However, we did not make up the margins. And only a few products ever sold in the world have 90% margins, and they tend to be in illegal areas or areas with high degrees of monopoly control. Economists use excessive margins as a measurement for lacking competition.
SAP and Oracle resources were offended by this comparison. Pablo Escobar passed away in 1993. However, what would Pablo Escobar have thought of SAP and Oracle’s support margins? Would he be offended by the comparison? Let us look at it from Pablo’s perspective for a moment. He had to do some heinous things, including wiping out competitive cartels to get his 90%+ margin. Pablo can make the argument that to obtain the same margin as SAP or Oracle in support. He had to put more skin in the game.
There is a clear case for preventing anti-competitive behavior through the allowance of third-party support. It is in the public interest.
If Oracle’s logic were extended to automobiles, it would be illegal to take your car to an independent garage. This would because it violated GM’s “license agreement.” If an automobile manufacturer could sue independent garages, they could try to enforce this, giving their dealerships a great ability to increase prices even more.
How Oracle can Isolate Rimini Street
The fact that few entities offer third-party support makes it easier for Oracle to sue Rimini Street. Oracle intends to scapegoat Rimini Street to make an example of them, so no one else challenges Oracle — and the challenge? The right to provide support for Oracle products. Oracle states that only it has the right to provide support for its products. However, there is a problem. Most of Oracle’s applications are not it’s own but are acquisitions. Through acquisitions, the costs of these applications have gone up. And these purchase decisions, in many cases, were made before Oracle acquired the vendors. This means that as soon as the acquisition was made, the customer received an application that would make little improvement for the rest of its existence, but all other costs went up.
Therefore, Oracle claims the right to purchase any vendor, and to then increase the cost of that vendor to customers. At Brightwork, we question Oracle’s right to make these acquisitions as they violate US antitrust law. The outcome of each acquisition is to increase Oracle’s market power and increases the cost while decreasing the innovation of each application purchased, how are the acquisitions in the public interest?
But the US has dramatically curtailed the enforcement of these laws. Oracle is running to the government to help allow them to increase their monopoly power, and the US is doing little about it. Even the continuation of the lawsuit between Oracle and Rimini Street is acting as a signal to other entities that might jump into the support game, that they shouldn’t. Oracle may never win its case, but even if it doesn’t, it can continue to send a “signal.” And Oracle has a virtually unlimited war chest it can use to restrict competition. Oracle has been referred to as a law firm with a software business attached. Their support engineers may make a pittance in India, but their attorneys are paid top dollar. And this illustrates where Oracle puts its money.
One wonders if it would make sense for Rimini Street to request donations from other Oracle customers to pay legal expenses. Because Rimini Street is fighting for the right to offer a legal option to Oracle support, Rimini Street is not doing this out of the kindness of their heart, they are protecting their business, but without them, there would not be a third party support market for Oracle. Without a company willing to take on Oracle legally, Oracle customers would have nowhere to turn but to Oracle.
Furthermore, third-party support providers can offer support that the vendor itself does not provide.
This is covered in the following quotation from Rimini Street.
“Rimini Street offers customization support at no extra charge. Software vendors, in contrast, do not include customization support in their standard support programs. This forces you to hire external consultants or add internal resources to support mission-critical customized code. In contrast, Rimini Street engineers resolve issues and develop fixes that directly address your customizations.”
So if Oracle’s wish were granted and Rimini Street was prevented from offering Oracle support, would Oracle agree to support customizations? No? Then is that not a loss in the marketplace of a value-added service? It would be interesting to read Oracle’s legal arguments for removing a service from the market.
Forbes Allows Oracle to Vent About the Lawsuit — In Return for Cash
This is a paid placement by Oracle into Forbes, which is now owned by a Chinese media conglomerate Integrated Whale Media. China is a curious country from which to get one’s media, as they are three spots from the bottom of the rankings (the bottom being North Korea) in press freedom, according to Reporters without Borders. However, the US FCC, deeply committed to maintaining a quality media system in the US, apparently could not think of a single reason that this purchase should have been approved.
One item we would have recommended is that the name Forbes no longer be written in English, but instead in Chinese. Forbes will allow anyone two to write that the moon is made of whatever cheese that is so desired in return for the right payment.
You can find out this was a paid placement, but you have to hover over the BrandVoice link to find out. This tells the reader (if they interpret it accurately) that the article is an advertisement that is posing as an article. It meets all of the standards set out by the Chinese Ministry of Information.
However, our question is, “why?” Why is a software vendor allowed to write an article on the website, and why does Forbes increasingly allow its article to be written by biased parties with a heavy agenda to get off of their chest? Well, we know why ($$$), but why is it tolerated?
In our view, the vendor’s articles and marketing literature are supposed to be on the vendor’s website. Overall, Forbes is finding ways to keep from having to pay authors while also getting paid to run the article. What a great business model. It leads to false information being published, but it’s a small price to pay. The overall setup of this article is dishonest and negatively predisposes us to the entire article. It takes two unscrupulous entities to create “real-looking” fake content like this, one is the media entity, and the second is the entity trying to get their message out.
Let us review the standards that are at play.
SAP resources have routinely accused Brightwork/us of being biased against SAP, as we covered in the article Why Does Brightwork Get Accused of Bias More Than Companies with Financial Bias? However, an article like the similar paid placement Forbes Allows SAP to Vent Against the Oracle Autonomous Database for Money and this Oracle article we are currently analyzing pass without any commentary. Can someone please explain how Brightwork, which does not allow vendors to write articles on the site, and is not paid by vendors to produce content has a problem with bias. In contrast, Forbes, ComputerWeekly, Gartner, and Forrester, that are all riding the vendor money train, are not accused of bias?
We did not find the presentation of this article particularly honest on the part of Forbes. So we made a few adjustments to their web page.
- As Forbes is now run out of China, it is disingenuous to keep the old Forbes name written in English. This is the translation of the term Forbes into Chinese. This way, readers know they are getting their media from what Reporters Without Borders described as..
“China’s state and privately-owned media are now under the Communist Party’s close control while foreign reporters trying to work in China…More than 60 journalists and bloggers are currently detained in conditions that pose a threat to their lives. Liu Xiaobo, a Nobel peace laureate and winner of the RSF Press Freedom Prize, and Yang Tongyan, a dissident blogger, both died in 2017 from cancers that were left untreated while they were detained. Under tougher Internet regulations, members of the public can now be jailed for the comments on a news item that they post on a social network or messaging service or even just for sharing content.”
- But there is good news, and when you score several spots higher than North Korea, where journalists are sometimes jailed (Chinese and North Korean jails double for weight loss clinics), for grammatical errors, this is something to tell your readers.
- The “Brand Voice” description is deceptive. Instead, Forbes should call it out proudly that they mostly had nothing to do with this article, and it is a wholly Oracle creation.
- Forbes should advertise its ability to get out industry PR messages right in the article. Then, of course, Forbes — or should we say 福布斯 soon won’t need any journalists on the staff all. Staff is a problem for a few reasons. One, they ask for salaries. Two, they are increasingly redundant as industry sources are increasingly stepping up to provide their writers. And 福布斯 has not only cut staffing but barely uses editors as the paid placement providers provide the editing.
Why the 福布斯 Web Page Looks Different from Our Version
This article intends to make it seem like a Forbes author wrote it. This is an article written by the plaintiff in this lawsuit, whose title makes it appear as if they intend to inform the audience.
The article states…
“The legal proceedings also have brought to light the fact that Rimini Street’s discount services don’t include software security patches, a standard security practice Rimini Street founder and CEO Seth Ravin called “outdated” during his trial testimony.”
Right. And if Oracle were not trying to mislead readers as to what this meant, they might add the following explanation from Rimini Street.
” In fact, Rimini Street’s technical and architectural security team often pinpoints and circumvents vulnerabilities months and even years before they are discovered and addressed by Oracle or SAP.”
And then Oracle follows this up with a guilt by association.
“Before starting Rimini Street, Ravin developed a similar business model at TomorrowNow, which Oracle rival SAP acquired in 2005. SAP shut down the unit in 2008 before a trial that ended with a $1.3 billion verdict against TomorrowNow and SAP for infringing Oracle’s copyrights. That amount was later reduced to $359 million. During the course of that trial, SAP CEO Bill McDermott apologized to Oracle for the TomorrowNow unit’s actions.
TomorrowNow also pleaded guilty to federal criminal charges of computer fraud and copyright infringement, paying a $20 million fine.”
What we do not know is how much of that behavior was support by SAP or the management left in place by Rimini Street’s previous founders. SAP did not purchase TomorrowNow to get into the support business but to convert Oracle customers to SAP customers. SAP tends to very badly manage its acquisitions, resulting in most of the leading and most influential individuals in the acquired company to leave not long after the acquisition. Furthermore, and the entire purchase was in effect a competitive intelligence acquisition, so we would have to investigate to see if any of these behaviors engaged in by SAP when they owned TomorrowNow had precursors in the previous management.
“Oracle subsequently filed a motion for summary judgment that was granted in February 2014. In Oracle’s motion, the company alleged that Rimini Street had infringed Oracle’s copyrights on its JD Edwards, PeopleSoft, and Siebel software. In that ruling, the court noted that Oracle’s PeopleSoft licenses specifically restrict use of the software to the customer’s “facility.” Since Rimini Street was using the software at its own facilities, it was infringing Oracle’s copyrights.”
This seems like an odd complaint on the part of Oracle. Rimini Street was using this software to support a customer, not to use the software itself. This license restriction appears designed to prevent third-party support. Therefore, we question the legality of this clause.
“At the end of trial, which began in September 2015 and concluded in October 2015, the jury awarded Oracle $35.6 million for Rimini Street’s infringement of 93 Oracle copyrights. It also awarded $14.4 million for computer fraud, since Rimini Street was deemed to have accessed Oracle computers without authorization when it automated software downloads.
In calculating the final award, the district court determined that Oracle was also entitled to attorneys’ fees, costs, and interest, yielding a final judgment in excess of $124 million.”
These are relatively small awards as they cover years of operations by Rimini Street. If the nature of what Oracle is alleging were true, these awards would be much more significant. And pointed out in the article, the fraud verdict was overturned upon appeal.
The Takeaways of the Oracle Rimini Street Lawsuit?
“Oracle v. Rimini Street underscores why software vendors must be vigilant about the uses of their product licenses and related documentation. Even with such vigilance, it is still possible for third parties to build a competing software support business without the appropriate licenses, unlawfully causing the creator of the software financial harm.”
Well, that is not our takeaway from the lawsuit. Our takeaway is that Oracle is suing under a series of untested assumptions regarding its control over its software that is highly negative for customers and also entirely out of conformance with other items. For example, if you want your car worked on, YOU, not GM get to choose who to take it to. The same applies to refrigerators and….well all purchased items. This is a lawsuit designed to discredit a legitimate business model.
Oracle Has Become Impoverished Due to Rimini Street?
One of the more amusing things is for a company with a CEO worth $1/2 a billion and Larry Ellison worth north of $70 billion that Rimini Street has severely cramped their lifestyle. The situation is so dire that Larry Ellison may have to sell one of his islands.
“Another important consideration is the impact on end customers. Rimini Street can offer low-cost support services because it didn’t incur the overhead of creating the enterprise applications it services, and it’s not providing the security patches and updates Oracle customers receive as part of Oracle-brand maintenance agreements.”
How can Oracle, with 94% margins, claim that it has not been c0mpensated for its development? Oracle had paid for its development when it sold the original license. Oracle has continually overcharged for the Oracle database, continuously recharging for what is mostly the same IP. Where does this author think that Larry Ellison’s $70 billion came from? The executives at Oracle draw compensation entirely out of line for the size of the company that is Oracle. Oracle appears to have billions for stock buybacks to enrich executives further. The argument that Oracle has been under-compensated properly in the market, and that the small number of customers Rimini Street has taken from Oracle is quite absurd.
Also, since when has Oracle ever respected the IP of other individuals? When Oracle purchased PeopleSoft, Larry Ellison famously bragged about how he planned to shut PeopleSoft down and convert them to Oracle. Was that respecting other people’s IPs? Also, if Oracle is so focused on respecting IP, why are they taking out a paid placement in 福布斯, which is run from a country that has such an extensive history of companies based there stealing IP? This seems like an odd choice Oracle.
The entire article is precisely what one would expect, and entirely one-sided presentation of the case regarding Oracle versus Rimini Street.
Finally, notice that there are two Oracle advertisements in this article, both of them taking shots at Rimini Street. What an interesting integration of paid placements with advertising. This article may as well be on Oracle’s website, with Forbes just “renting out” its space.
Free Markets: The Rallying Cry of Monopolists?
It is curious how often we hear the term “Free Markets,” yet if one looks at industry after industry, we observe companies attempting to move into monopoly situations. Is the term Free Market just a mindless talking point?
Is it something that monopolistic business entities say, but then do everything in their power to avoid?
Larry Ellison will tell you all about how to follow the Japanese warrior code, but can’t tell you much about fighting fairly. Oracle believes it can use legal muscle to restrict competition. Oracle is not interested in putting very much money into support, but they put a lot of money into attorneys. Again, a law firm that happens to have a software business attached.
The quote is correct that Oracle (or SAP, for that matter) will refer the customer to consulting resources. But consulting projects to attend to customizations are expensive. This is a highly inefficient way to manage customizations. Something else, the number of customizations in both SAP and Oracle, is traditionally greatly underemphasized during the sales phase. Therefore, many of these customizations were not initially planned but were a consequence of the company learning that the software could not support the business processes after they were told it would.
After Denying For Years that Rimini Cross Used Software (they) Admitted, they Used Software from One Customer to Support Another Customer “All the Time”?
And why is this an issue?
If Oracle is making the argument that Rimini Street lied, that would be one issue. However, given the frequency with which Oracle sales reps lie to customers, we have a hard time buying that Oracle opposes lying. In fact, of all the vendors we track, Oracle tops the list for proving the least accurate information to customers as we cover in Honest Vendor Ratings – Oracle.
But why would this issue listed here even be a concern? The question we have is why Oracle’s case against Rimini Street has not been thrown out and why Oracle is allowed to continue to use its financial muscle to restrict competition.
Rimini Street Can’t be Trusted to Ensure Technology Investments Are Fully Protected?
Why is that true?
Like Oracle, Rimini Street has hired resources trained on Oracle and has invested very significantly in a range of support capabilities from ticketing, to bug fixes, etc. Rimini Street has committed to providing a principal or primary support engineer with at least 15 years of experience. Rimini Street has a policy of a call back in less than 15 minutes. Oracle has nothing like this. SAP, which follows Oracle’s high margin support model, also does not have this.
Oracle makes it sound like supporting their applications and databases is like cracking the Enigma machine from WW2. Secondly, Rimini Street has higher customer satisfaction than Oracle, so if this were true, that difference in customer satisfaction would not exist. This overall article is intended to scare customers from considering Rimini Street, but nearly every item we fact check does not hold up.
Oracle Provides Security Features at the Source While Rimini Street Relies Primarily on Firewalls Leaving Customers Vulnerable?
Why does that leave customers vulnerable? And again, if this is true, why is Rimini Street’s support rated higher than Oracle’s?
Oracle Owns the Source Code and Has the Tools and Ability to Develop Security Updates, While Rimini Street Can’t Develop Key Software Security Patches?
Well, somehow, Rimini Street is managing to do this. Rimini Street addresses an essential consideration that software vendors, including Oracle, do not discuss. And it is explained in the following quotation from Rimini Street.
“The vendor typically bundles patches and updates with hundreds of unrelated fixes, forcing you to implement and test all the included patches just to deploy the one fix you need. Rimini Street support eliminates this overhead cost and risk. Experienced engineers develop fixes that directly address your specific issues, enabling you to quickly deploy just the fixes you need.”
This is a lot of overhead, which Rimini Street can defend against. And this reduces the maintenance overhead on Oracle.
Oracle’s entire line of criticism here is undermined by the fact that Oracle does not have well-rated support. Oracle tries to get its customers to use the absolute minimum level of support.
The next bullet point is substantially similar, so we won’t spend time analyzing it.
Oracle Delivers Complete…..Tested Products…While Rimini Street Leaves Customers Behind Because It Lacks Access to Oracle’s Innovations?
Some customers need some of Oracle’s latest versions of applications and databases. For them, paying the 22%+ yearly support is the clear option. However, because Oracle makes few improvements to its applications, and because the improvement that Oracle does make to its database tend to be in areas that most customers will not leverage. The percentage of customers that need to be on Oracle support is far lower than the actual number that is on support. The only benefit of paying this support fee is contributing to Oracle’s margin because the actual support quality is higher by using support entities outside of Oracle. This means that a very high percentage of the support renewals received by Oracle from customers can be categorized as IT waste.
Oracle Delivers Consistent, Ongoing, and Unparalleled Innovation?
This is certainly not true. Oracle receives our lowest rating for software innovation. Again, they don’t function as much like software vendors as they do a holding company that happens to own an extensive portfolio of applications and databases. Oracle is a financial engineering firm that configures its sales strategy, its audit strategy, and every other approach to maximize its extraction from its customers.
Oracle offers one area of innovation, its database. But again, Oracle’s database from earlier versions is more than most customers can leverage.
Rimini Street Can’t Take Advantage of New Technology?
Not true, as the previous statement about Oracle’s innovation, is not valid.
Oracle Provides Broad Protection….While Rimini Street Can’t Offer the Latest Updates
This rephrases the earlier critique. Rimini Street can’t offer the latest updates, but any customer should analyze what percentage of their Oracle applications and databases require the latest updates.
Our analysis has shown that only a minority of them require these updates.
How to Understand Oracle’s Low-Quality Support Business Model
This point is brought up by Ahmed Azmi.
“Think about a customer moving Oracle apps/systems from on-premises to a managed hosting 3 year contract.The entire point of managed services is to outsource operational support to the vendor instead of your own IT. Now you double pay for said support.
Once in the license and again in the SLA. Either on-premises or hosted, the 22% is contractually paid for 2 deliverables. Innovation and support. Oracle products enter “maintenance only” mode after acquisition so the innovation part is instantly lost as evidenced by the fact that very few customers run the latest versions. That leaves “quality” of support. The only way to make 90% margin on anything is either you sell addictive drugs or you outsource work to the cheapest possible labor pool. Cheap and quality are always mutually exclusive.”
Hmmmm….seems like a highly accurate description of Oracle’s business model.
Oracle as Two Companies
Oracle has often explained as a software company that is consistently a single company, but in fact, Oracle is two companies.
Oracle as a Database Company: One is a database company where the majority of the databases it has sold are over the needs of the buyers (that is, some of the database functionality of Oracle is necessary, but only for a minority of the licenses that are purchased).
Oracle as an Application Company: The second is essentially a Computer Associates model for its applications.
However, either way, the entire model is about getting the products in to harvest the support from the customer.
Therefore, the worst value for customers is Oracle’s support, and the smartest customers will use Oracle only where they have to and minimize the amount they spend on support to Oracle.
This is why Oracle must stop the 3rd party Oracle support providers Rimini Street. The lack of value of Oracle’s support is just too apparent once you investigate. Oracle is not suing Rimini Street to stop the small leakage of support dollars that have gone to Rimini Street. Oracle is suing Rimini Street to keep the truth of how bad their support value is from getting out, hence defending against future more extensive leakage.
Taking a Page from Pharmaceutical Companies
In the pharmaceutical area, companies re-patent old drugs and call it an innovation (they do this by making a slight twist to a molecule and apply for a new patent). Their business model would fall apart if consumers and taxpayers knew that around 87% of new drugs are copies of older drugs, a great motivation for which is to extend patents. Pharmaceutical companies call re-patenting already patented drugs “innovation.” This is, in essence, the US FDA allowing drug companies to fleece consumers. Canada has already figured out this scam and follows a different model that is good for consumers rather than setting the consumer up like a sheep to be fleeced. Pharmaceutical companies must stop this information from getting out, or if they were made to follow the actual patent law (20 years for a new drug and no fakery or derivations for extensions), their revenues would decline by many $billions. Likewise, Rimini Street is the voice that must be silenced.
Oracle’s arguments presented in this comparison are weak.
- It seems like the overall theme of Oracle’s messaging strategy versus Rimini Street is fear. That is to come up with as many fear-based arguments as possible.
- Oracle makes it appear that customer vastly degrades their Oracle investments if they use third-party support.
- When an Oracle customer communicates with the Oracle sales rep, they get even more hysterical statements, and of course, Oracle uses audits as a way to instill more fear into customers.
- The idea is that the outcome is so terrible, and the problems stemming from an audit are so tricky that it is better “not to go there.”
- On the legal front, Oracle is using specific items regarding alleged IP infringement on the part of Rimini Street to try to make the case that the entire third-party support model is illegal. It isn’t. And Oracle’s margins in support are the most unequivocal evidence of why competition is required in vendor support.
But one has to ask if what Oracle says about Rimini Street were true, why would Oracle have to push the issue so aggressively? Wouldn’t customers naturally return to Oracle support, as Oracle seems to imply that Rimini Street is not even a viable option? That is, a natural question would be
“What is Oracle afraid of?”
The overall article rates a 1.5 out of 10 for accuracy, primarily because Oracles statements about the latest updates is true, but even those statements are misleading.
The entire article could be shrunken to:
“We like getting 94% margins on support, and if you use Rimini Street we won’t get those margins.”
One wonders if Oracle included its support margins somewhere in the article. Then the percentage of those margins that go into Larry Ellison’s bank account (who is already worth $70 billion) would that negatively or positively affect the impact of Oracle’s arguments?
*This article should not be construed as an endorsement of Rimini Street. Brightwork Research & Analysis does not endorse any third-party support provider.
“As China grows increasingly powerful, its ability to constrain the free speech of organizations that wish to enter or flourish in the Chinese market grows in tandem. From tech giants to Hollywood studios to the American Bar Association, American organizations have censored themselves and their products to avoid offending Beijing. Forbes is far from the only media company to incite controversy with its China coverage. After Bloomberg published an excellent series on the family wealth of Chinese leaders in 2012, for example, Beijing retaliated by constraining the company’s ability to sell its lucrative terminals in China. The company then partially repudiated its earlier work. Sometimes “we … write stories that we probably may have kind of rethought — should have rethought,” Bloomberg chairman Peter T. Grauer said at the time. Yet Forbes, majority owned by a Hong Kong entity, has to contend with the possibility that officials in Beijing actively expect them to steer away from controversial China subjects.
Forbes’s reputational problems began before the 2014 purchase. The magazine drew flak for a contributor model that allowed writers to publish without any editorial input, forsaking the traditional gatekeeper model that editors play for writers. “I thought it was weird that I could literally publish anything,” a former Forbes contributor, who asked to remain anonymous, told me.”