Round 2 in War Over 3rd-Party Software Support

Heads up, CIO’s: The second round has begun in a software war that could have ramifications for colleges looking to save money by hiring third-party companies to maintain core business applications.

In January, Oracle sued Rimini Street, an upstart company that has lured big-name university clients like Cornell and Vanderbilt by supporting Oracle software at discounted rates.

Now Rimini Street is fighting back with its own lawsuit against the giant vendor. The Las Vegas-based upstart accuses Oracle of copyright misuse, defamation, trade libel, and unfair competition.

The financial stakes here are enormous. Colleges can hand over $1-million or more a year to software companies like Oracle that supply and maintain systems for accounting, human resources, and student enrollment. Rimini Street offers to cut those support bills in half; Oracle accuses Rimini of running an “illegal” and “corrupt” business model.

“The two are, quite possibly, in the midst of determining the fate of the third-party support model, which has been kind to the budgets of many an Oracle or SAP customer,” says CIO Insight’s Know It All blog.

In an interview with IDG News Service, Rimini Street’s chief executive, Seth Ravin, said customers had the right to take their business to third-party support companies, just as car buyers can get an oil change at an independent shop rather than their original dealer. But he admitted that Oracle’s legal attack had affected sales.

“We continued to close business, including some of the largest deals ever,” since the suit was filed, he told the news service. “[But] I think we had a few deals that have not moved forward because of the litigation. We believe that’s a good part of the intent of the suit, to slow our business down.”