March 02, 2012, 9:03 AM — A company that has been providing third-party support for Oracle's JD Edwards ERP (enterprise resource planning) software is undergoing a significant expansion of its efforts, despite the ongoing cloud of litigation over the market.
Spinnaker Support of Denver has acquired customer contracts from Versytec, a Nashua, New Hampshire, company that has offered JD Edwards support since 2004, said Matt Stava, co-founder and managing principal at Spinnaker.
Now Spinnaker will be handling support for about 160 JD Edwards customers on various versions of the software, according to the company.
"We are very aggressively going after this market, and we want to own this market," he said. Spinnaker is also planning to start serving other applications, but Stava declined to name them.
Third-party support customers no longer gain access to product updates and patches from Oracle, but generally have stable systems and aren't interested in upgrades. Spinnaker and competitor Rimini Street provide ongoing tech support as well as services that keep the systems up to date, such as tax and regulatory updates for running payroll in accordance with current law.
Like Rimini Street, Spinnaker says customers can save significantly on their support bills. In Spinnaker's case, it usually works out to about 50 percent, according to Stava.
Privately held Spinnaker is profitable and has experienced year-over-year growth of 40 to 50 percent, a number that should grow this year, according to Stava.
Now it's hoping to break out further into the third-party support market, which has been best known in recent times for the lawsuits Oracle filed against former SAP subsidiary TomorrowNow and Rimini Street. TomorrowNow provided support at a lower cost for Oracle applications. SAP admitted liability for illegal downloads by TomorrowNow workers from Oracle's support site, resulting in a US$1.3 billion jury award in November 2010. That award was thrown out by a judge and now Oracle is seeking a new trial on damages.
Rimini Street's CEO, Seth Ravin, was a TomorrowNow co-founder. While Oracle alleges Rimini Street uses the same "corrupt business model" as TomorrowNow, Ravin and the company have maintained no wrongdoing, saying they act within the boundaries of their customers' license agreement with Oracle.
"Our process difference with Rimini is very stark," Stava said. Spinnaker has managed to win several large deals lately not only because of the Oracle lawsuit, but these differences in methodology, he said.