Oracle and Rimini Street battle over 3rd party support
I read the recent news about Rimini Street’s battle with Oracle with great interest this past week.
The Chronicle headline last Sunday was “A Small Company, Promising Major Savings on Vital Software, Lures Colleges.” The issue highlighted in the story:
Cost-conscious colleges are caught in the cross-fire of a legal battle between Rimini Street, the low-cost maintenance provider, and Oracle, a software powerhouse that serves hundreds of higher-education customers. In January, Oracle sued Rimini Street for running what Oracle calls an “illegal” and “corrupt” business model.
Rimini Street offers colleges and universities 3rd party support at half the cost of their current ERP maintenance contract. It’s not for everyone, but for schools that want to “freeze” their current ERP it seems like a great deal. Some schools intend to “stay put” with their current system for many years. They don’t want to go through required upgrades, they just need to stay current with fixes and regulatory updates, and they need someone who can help when issues come up. Other institutions intend to move from their current solution to something else. A transition like this is often a costly, multi-year endeavor. Because these institutions simply need to maintain & support what they have during the transition, Rimini Street is a great option because half of what they were paying the vendor for support can be applied to the cost of the transition.
This battle may stretch out for several years like the Blackboard patent dispute. If it does, Colleges and Universities will lose in the process. Like the Blackboard dispute, which was ultimately settled favorably (the patent was invalidated), it’s easy to get drawn into the gory details of the dispute. Why? Because it has potentially dramatic consequences for all of us who care about getting more value out of IT for the good of education.
There’s no question that, like the Blackboard patent battle, the consequences are very real for the companies involved, and their customers. A lot of money will be spent that doesn’t do anything to create real value, and that money ultimately comes from colleges and universities. In these hard economic times it’s difficult to stomach.
But rather than focusing on the details of this dispute, our time is better spent working toward the evolution toward more community developed software and educational resources. Initiatives like Kuali and Sakai are providing alternatives that make it easy to un-bundle software and services. For colleges and universities that means disputes like the one between Oracle and Rimini Street won’t limit competitive services. A few interesting things are happening:
- A lot more value is being created through collaborations that result in open educational resources. There is a growing amount of commodity software, and software core to the business of Education that is substantially driven by, if not fully, open source. The same goes for other open educational resources (OER). If you haven’t been following Brad Wheeler’s “Collaboration IS Strategy” it’s worth catching up on.
- Entirely new companies have emerged with new business models to fill the void where the evolution of community driven resources have advanced faster than the incumbent vendors’ ability to adapt. And they are growing rapidly.
- A lot of IT services that have been historically been delivered by individual institutions’ IT departments are moving “Above Campus.” Email, office applications, eLearning, content, and even ERP applications are being crowd-sourced and cloud-sourced.
What do these things have in common? From my perspective they are all market-driven forces that are challenging the status quo because the status quo isn’t delivering enough value. Educational institutions need to get more value from IT if they are going to live up to the potential of education to help us address some really big challenges affecting us all.