How to Cut SAP and Oracle Maintenance Costs to Fund Innovation Seth Ravin Chief Executive Officer Rimini Street, Inc. Gartner Enterprise Application & Architecture Summit 2014 Tokyo, Japan Discussion Today Current State of Enterprise Software You Now Have a Choice Business Impact of Independent Support Freeing Up Funds for Innovation – Client Examples Nihon Rimini Street K.K. Discussions – Q&A 2 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Forward-Looking Statements This presentation may contain forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties, and are based on various assumptions. If the risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Rimini Street assumes no obligation to update any forward-looking statements or information, which speak only as of the date of this presentation. 3 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Current State of Enterprise Software Market Overview of SAP and Oracle Software Maintenance in Japan License to use software (example) Japanese “Company A” ¥100M investment ¥22M per year (~22%) Annual ‘Maintenance’ service All Japanese Companies Today and Annual ‘Maintenance’ service ¥120B (1) per year (~22%) VERY SIGNIFICANT INCOME STREAM FOR SAP AND ORACLE. VERY SIGNIFICANT COST FOR JAPANESE COMPANIES. NO COMPETITION UNTIL NOW. (1) - Oracle Corporate Japan annual report FY2013 reported Software License Update and Product Support Revenue at ¥67B - SAP’s annual report for FY2012 reported total SAP revenue for Japan at €754B,. If we assume that maintenance is 50% of SAP Japan’s revenue & 1EUR = 140JPY then estimated maintenance revenue for SAP Japan is therefore ¥53B 5 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential The Enterprise Software World Has Changed Full-featured Stable Software 00’S Costly Forced upgrades Lack of Innovation from ERP 10’S 90’S 80’S Expensive, Low Value Maintenance Fees Service Dissatisfaction 59% 92%(1) Profit Margin (2) Dissatisfied (1) Oracle Corporation, Financial report for Six Months ended 30 November 2014: Software License Updates and Product Support: US$8,948M Revenue Software License Updates and Product Support: US$ 573M Operating Expenses Software License Updates and Product Support: US$8,375M Operating Profit (i.e. 93.5%) http://investor.oracle.com/financial-reporting/quarterly-reports/default.aspx 6 Service Irrelevance Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Add-on development issues Vanilla code issues (2) “Oracle Application Customer Satisfaction, Attitudes, and Plan” Computer Economics Special Report. Nov 2010. 59% expressed dissatisfaction with the Cost of Support from Oracle. Property of Rimini Street ©2014 | Proprietary and Confidential High Operational and Maintenance Costs Limit Innovation Gartner IT Key Metrics Data 2014 Capital Operational 29% 71% The total capitalized IT spending for the fiscal year (that is, the full value of capitalized assets acquired in the fiscal year). This includes investments in new application development and IT infrastructure. The total day-to-day operations and maintenance expenses for this fiscal year that have not been capitalized. These do not include any amortization and depreciation expenses. Source: Gartner, "IT Key Metrics Data 2014: Key Industry Measures: Cross Industry Analysis: Current Year" Jamie K. Guevara, Linda Hall, Eric Stegman, 16 December 2013 7 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential A New Maintenance Support Model is Needed Traditional 8 Independent Support Focus Vendor-Centric Client-Centric Cost Model 90% Margins 50% Savings Support Coverage Vanilla Software Only ‘Add-On’ Development and Vanilla Delivery Model Book Trained Help Desk Experienced Engineers Assigned to Each Other Upgrades Forced Upgrades Upgrade When Ready Innovation Vendor Only Vendor and Leading-Edge Options Flexibility Vendor Lock-In Keep Options Open Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential You Now Have a Choice Rimini Street – Summary • Rimini Street replaces the annual software maintenance service of SAP and Oracle Our price is 50% off what is currently paid to SAP or Oracle per annum We support old and new versions of the software for up to 15 years. Our customers are not forced to upgrade We provide Tax, Legal and Regulatory updates across 200 countries including Japan Our service includes support for add-on developments Our service is ISO certified and ultra-responsive, including a named Primary Support Engineer and quick 24/7 call-backs • • • • • Rimini Street Named "Cool Vendor" by Gartner “Cool Vendors in Infrastructure Services, 2011” by Bob Igou, Pat Phelan et al. 12 April 2011 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 10 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Rimini Street Supported Products • • Product Lines: ALL Releases: 5.x, 6.0.x, 6.3.x, 7.0.x, 7.5.x, 7.7.x, 7.8.x, and 8.x • • Product Lines: HCM, FIN, CRM, EPM, SRM, SCM, Public Sector, and Campus Solutions Releases: 7.x, 8.x, and 9.x • • Product Lines: HCM, Financials, Distribution and Manufacturing Releases: ALL • • Product Lines: ALL Releases: 10.7 and later • • Product Lines: ALL All releases certified in conjunction with supported applications • Oracle Hyperion Planning, Oracle Essbase, Oracle Hyperion Financial Management, Oracle Hyperion Financial Close Management, Oracle Hyperion Strategic Finance and Oracle Financial Management Analytics • Product Lines: Merchandising Operations Management, Merchandising Planning and Optimization, and Supply Chain Planning and Execution Releases: 10.x and Later Releases • • • Product Lines: ALL Releases SAP ECC 6.0 and earlier, BW 3.5, SAP Business Suite - including BI7, SCM, CRM, EWM, PLM, and GTS • Product Lines: BusinessObjects Enterprise, Advanced Analysis, Interactive Analysis (Web Intelligence), Explorer, Dashboard Design (Xcelsius) and Crystal Reports Releases: BusinessObjects 6 and later releases • 11 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Support Comparison Overview Standard Support Program Feature Rimini Street Vendor Named, Regional Primary Support Engineer for Each Client Named, Global Account Manager for Each Client 24/7 Support with Guaranteed 30 Minutes or Less Response Global Tax, Legal and Regulatory Updates Installation & Upgrade Process Support Configuration Support Operational Support Application & Repository Fixes Documentation Fixes Fixes for “Add-on” Developments Performance Support Interoperability Support 50% Annual Cost Savings Flexible Coverage Periods & Payment Terms 12 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Value & Client Success Drive Growth IT Vendor of the Year Top 12 Most Disruptive Enterprise IT Vendors •Over 500 clients 20 Companies to Watch in 2012 • 40% Revenue growth YoY • Over 400 clients • Over 300 clients • Over 275 clients • Over 225 clients • Rimini Street founded • Introduced third support for Siebel • Introduced • Expanded Independent coverage to Support for Canada PeopleSoft and and Europe JD Edwards • Over 150 clients • Global tax and regulatory • Launched SAP capabilities support in nearly 200 countries • Expanded coverage • Office expansion to Asia Pacific to Latin America • 40%+ revenue growth • Launched Oracle’s E-Business Suite application support • Filed patent for proprietary tax, legal and regulatory system • Signed first seven figure deal • General availability of Rimini Street Tax Engine • First and only ISOcertified provider of global third-party enterprise software support services • Oracle new sales increase 200% YoY • Launched CNC Managed Services for JDE • Closed first major U.S. Federal client • Oracle new sales growth over 200% • SAP new sales growth 165% YoY • First and only ISO 27001 certified independent support provider • Launched SAP BusinessObjects and Oracle Retail support • Adams Street Partners private equity investment Disclaimer: Source: Gartner, “Cool Vendors in Infrastructure Services, 2011” by Bob Igou, Pat Phelan et al. 12 April 2011 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 13 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Snapshot of Rimini Street Clients Fortune 500 and 100 Over 500 Clients Including: • 49 of Fortune 500 • 10 of the Fortune 100 14 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Business Impact of Independent Support Total Maintenance Savings With Independent Support 16 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Total Maintenance Savings Example • • Software licensees will save 1.5 times their vendor annual support fees by switching to Rimini Street Support Example: Licensee paying ¥200M in vendor support fees will save ¥300M with Rimini Street EACH AND EVERY YEAR Paying ¥200,000K Annual Maintenance Fees ¥100M • 50% savings on ¥ 200M ¥81.8M • Annualized savings by avoiding 2 upgrades over 10 years ¥66.7M • 4.44 FTEs* ¥54.5M • 3.64 FTEs* ¥303M • Total savings of 1.5x ¥ 200M * ¥ 15M full loaded FTE cost 17 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Innovate Around the Edges, Not Through ERP Upgrades “Despite hundreds of billions of wasted on failed R&D projects, most market influencers would agree that enterprise software vendors have produced a dearth of innovation over the past decade…Innovation came from the consumer tech side and next-generation solution providers.” Mobile Apps Open Source SaaS ERP System – Ray Wang, SoftwareInsider Industry Apps 18 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 BI Property of Rimini Street ©2014 | Proprietary and Confidential Freeing up Funds for Innovation Client Examples Freeing Up Funds for Innovation and Global Expansion - Embraer Embraer CIO, Alexandre Baulé, named IT Executive of Year for using Rimini Street to Cut SAP Maintenance Costs to Fund Innovation • • • Reduced SAP maintenance costs from 50% of total IT budget to less than 25% Embraer can run and develop on the SAP application for long time without upgrades Freed up funds for innovation and global expansion CIO of the Year - 2013 “Nearly three quarters of our IT budget was devoted simply to keeping things running, but at the same time we were experiencing a huge pressure for innovation and growth. We had to figure out how to turn the situation around, and we ended up investigating independent support from Rimini Street.” – Alexandre Baulé, Embraer CIO 20 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Gaining Upgrade Flexibility and Freeing Funds for Innovation – Valspar Choosing Independent support for its ERP application is enabling Valspar to generate significant savings from its annual support costs and reallocate a portion of its total global IT budget to focus on strategic growth initiatives. “By partnering with Rimini Street, Valspar was able to reallocate a portion of its total global IT budget to growth initiatives with the stroke of a pen” – Tom Grooms, vice president and chief information officer of Valspar 21 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential “Gartner has seen an increased awareness and interest in thirdparty support options for SAP, which can be leveraged to reduce maintenance and support costs.” – Alexa Bona, Gartner Research, Inc. June 14, 2013* Disclaimer; *Source: "Leverage Key Trends Impacting SAP Maintenance and Support Costs to Negotiate Better Deals," Gartner Research, Inc., June 14, 2013 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 22 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential “Customers can save millions of dollars if they have a viable third party alternative to applications support and can postpone the move to Fusion. This is a huge opportunity for Rimini Street and massive problem for Oracle.” – Peter Goldmacher, Analyst, Cowen and Company, October 19, 2010 23 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential “…Firms like Rimini Street argue with some justification that enterprise software users are so over a barrel financially to the big vendors that they have little budget left over for innovation and experimentation.” – Larry Dignan, ZDNet, April 23, 2013 24 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Nihon Rimini Street K.K. Our Announcement on 6 March, 2014 1. Rimini Street has launched its award winning Software Maintenance Service in Japan 2. This announcement is significant because it brings competition to a segment of the IT market in Japan that is: a) b) c) Very large Very profitable for SAP and Oracle Completely uncompetitive until now 3. Companies in the US and Europe have benefited from Independent Software Maintenance services for over 9 years, including 49 Fortune 500 Corporations. 4. Japanese companies can now also significantly benefit from this option. 26 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Rimini Street In the News 27 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Nihon Rimini Street – Executives Mr. Kazuya Ohta Country General Manager Mr. Tomonori Oku Vice President, Service Delivery 28 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Mr. Hisamichi Nagamori Vice President, Sales Property of Rimini Street ©2014 | Proprietary and Confidential Nihon Rimini Street K.K. Established July 2013 Ownership 100% owned by Rimini Street, Inc. Location Shinjuku Park Tower N30th Floor 3-7-1 Nishi Shinjuku, Shinjuku-Ku Tokyo 163-1030 Japan Services offered in Japan Full range of Rimini Street services Language Japanese language support in Japan, backed by a 24/7 global consultant team in: USA, Brazil, Australia, India, Germany and UK Customers • 3 local contracts signed in Japan last quarter (1 SAP, 2 Oracle) • 7 Japanese multinational customers including: Pioneer Electronics (USA) and SEGA of America, Inc. • Over 50 clients in the Asia-Pacific Region • Over 500 clients worldwide, including 49 of Fortune 500 companies Engagement model Direct, via SI, or side-by-side with SI People Local team in Japan, over 400 employees globally 29 Gartner Japan Enterprise Application ＆ Architecture Summit 2014 Property of Rimini Street ©2014 | Proprietary and Confidential Questions & Answers Visit Rimini Street’s Exhibit Booth General Contact Info: Kazuya Ohta（太田一矢） Country General Manager（支社長）〒163-1030 東京都新宿区西新宿3-7-1 新宿パークタワーN30階携帯(Mobile): +81 90-1434-0555 オフィス(Office): +81 3-5326-3461