Oracle rival Rimini Street believes that now is the perfect time to grab customers away
- The same week that the US saw unprecedented unemployment claims thanks to the coronavirus pandemic, Rimini Street founder and CEO Seth Ravin says that he sees opportunity to take another shot at its longtime rival Oracle, he tells Business Insider.
- Rimini Street founder and CEO Seth Ravin says that Oracle stronghold industries like airlines, cruises, hospitality, restaurants have seen their fortunes alter in just four weeks.
- Companies will now spend much of 2020 looking for ways to save money on IT budgets and he's hoping to convince them to do that by keeping their aging Oracle or SAP software and hire his company to help them maintain it.
- He's launched a national TV ad campaign, is hiring and has told his investors that the company appears to still be on track for modest growth this year.
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The same week that the US saw unprecedented unemployment claims thanks to the coronavirus pandemic, Rimini Street founder and CEO Seth Ravin saw an opportunity.
He thinks the current crisis, which has caused industries to tighten their belts and cut costs, is the ideal opportunity to convince Oracle's customers to stop paying for expensive new software upgrades and pricey software maintenance contracts, which covers things like bug fixes and enhanced customer support.
His pitch is that existing Oracle and SAP customers can just keep their existing databases and other software -possibly for years to come - but save money by paying his company Rimini Street to do the dirty work of supporting it, rather than the companies who made the software in the first place.
Ravin says that not only is a third-party provider like Rimini cheaper than going straight to Oracle for customer support, but it's just a better customer experience.
"I have tremendous respect for [Oracle founder]Larry Ellison. Look what he's built. What an amazing American entrepreneur story. I just disagree with the way that they run their business," Ravin says. "Oracle is one of these companies that wanted to be respected by its clients, but didn't feel it needed to be liked by its clients. You've seen their frustration."
Ravin points to one of his marquee customers, T-Mobile, as an example of a company using Rimini Street to keep an older Oracle system up and running rather than upgrading to the latest, greatest version. "They're saving tens and tens of millions of dollars that they're putting into big projects like 5G, right? They don't need to change out their billing system," he says.
A long feud
Although Rimini is tiny compared to Oracle - it booked $281 million in revenue last year, and has a market cap of $234 million; Oracle saw $39.5 billion in revenue and is currently valued at $156 billion - the database giant has spent years trying to squash Rimini's business through lawsuits and marketing campaigns. Each company has won some battles and lost some.
The issue is that Oracle makes the lion's share of its money from those support contracts, meaning that Rimini is a direct competitor to its most lucrative source of revenue. Doing battle with the litigious Oracle has become such a constant for Rimini that Ravin jokes about the feud.
"I mean, when you think about it, we've had lawyers fighting each other for over a decade," he laughs. "It just takes on a life of its own."
The animosity between the two companies was baked in from Rimini's birth. Not only was Ravin deliberately targeting Oracle's cash cow, but he's also a member of the so-called PeopleSoft mafia, a group of startup founders that disbanded after Larry Ellison successful acquisition of HR software vendor PeopleSoft in 2004 in one of the most bitter hostile takeovers in corporate history.
Once Oracle consumed PeopleSoft in 2004, its founder and top executives went on to found a bunch of companies that went on to continue to compete with Oracle. The biggest and best known is Workday, one of Oracle's modern competitors in the cloud today. However, in 2005, Ravin, who worked in PeopleSoft sales and customer support, founded Rimini Street, with the idea to give enterprise software customers a cheaper alternative for support.
A moment to strike
Rimini has been more of annoyance to the database giant than a true threat. Since 2005, Oracle has prospered in every measurable way, and Ellison has become one of the richest men in the world.
"You know, those people who thought they were going to spend $100 million on a new system in 2020, a lot of those are going away or they're going to get pushed [to a future date]. Your world just changed in four weeks and what you thought you could afford...everybody's back to basics, right?," says Ravin.
So while other companies are working on layoffs, Ravin tells Business Insider that he's still hiring.
And this week he launched a major television ad campaign. It begins with a voiceover that says, "Your ERP and database vendors don't want you to know who we are. They don't want you to know that we've supported over 3,000 Oracle and SAP clients."
Even if he's wildly successful, the dent he'll make in Oracle's business is more like a mosquito bite than a serious threat to the software giant. But in this time of economic turmoil it's nice to hear stories of optimism. Ravin told investors last month when he released his 2019 Q4 results that he's still on track, at least for now, for revenue growth next quarter and for all of 2020. He currently expects to end 2020 at $310 million to $320 million in revenue, up by between $29 and $39 million from 2019.
Are you an Oracle insider with insight to share? Contact Julie Bort via email at firstname.lastname@example.org or on encrypted chat app Signal at (970) 430-6112 (no PR inquiries, please). Open DMs on Twitter @Julie188.
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