Options grow for third-party SAP application support

Spinnaker Support will offer support for SAP ECC and R/3 installations at lower cost than vendor support

By , IDG News Service |  IT Management

The nascent market for third-party SAP application support gained another player on Thursday, with Spinnaker Support announcing a service that will place it in competition with the likes of Rimini Street.

Third-party support companies cater to ERP (enterprise resource planning) software customers that have stable systems and little desire to go through the expense and difficulty of upgrading to newer versions, which are only legally available through vendor-provided maintenance. Instead, third-party providers focus on matters such as tax updates and ongoing operational support.

Spinnaker had already been providing support for Oracle's JD Edwards software, as has Rimini Street. The "same high-quality maintenance formula" will apply to SAP customers that go with Spinnaker, the company said in a statement. Spinnaker has even hired a former Rimini Street executive, Shawn du Plessis , to lead its SAP practice. Du Plessis "designed and launched" Rimini's SAP business, according to Spinnaker.

SAP customers that` switch to its service stand to lower their current support costs by nearly 70 percent, Spinnaker claimed. In contrast, Rimini Street has maintained that customers will save at least 50 percent of their bills.

Spinnaker plans to support all SAP ECC and R/3 versions and has three charter customers signed up so far, according to a statement. Customers will receive rapid response times for support queries, with an average of eight minutes before they speak with a live engineer, Spinnaker said. Customizations will be supported, and coverage will be around the clock, 365 days a year, it added.

An SAP spokesman declined comment.

Software vendors derive lucrative profits from annual software maintenance contracts and are no doubt loath to see the third-party support market grow. Its rise has possibly been tempered by the high-profile lawsuits Oracle filed against a former SAP subsidiary, TomorrowNow, and Rimini Street.

TomorrowNow provided lower-cost support for Oracle software. SAP ended up admitting liability for illegal downloads made by TomorrowNow workers from Oracle's support site, which resulted in a US$1.3 billion jury award in November 2010. That award was struck by a judge, and now Oracle is seeking a new trial on damages.

Rimini Street's CEO, Seth Ravin, co-founded TomorrowNow. While Oracle has alleged that Rimini Street incorporates the same "corrupt business model" as TomorrowNow, Rimini Street maintains that it acts within the boundaries of their customers' license agreement with Oracle. That suit has yet to go to trial.

A Spinnaker executive told IDG News Service in an interview earlier this year that the company has "stark" differences in the way it conducts business compared to Rimini Street and therefore is not swayed by the prospect of litigation.

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