Rimini Street Fires Back at Oracle

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Rimini Street, a third-party software support provider, is countersuing Oracle and accusing the software giant of copyright misuse, defamation, disparagement, trade libel and unfair competition under the California Business and Professions Code.

Las Vegas-based Rimini Street is a rarity, a successful third-party support provider for Oracle’s Siebel, PeopleSoft and JD Edwards suites as well as a variety of SAP software applications that consistently lands new support contractsby undercutting the 17 percent to 22 percent maintenance fees charged by the two largest business applications providers.

The suit was filed in U.S. District Court in Nevada and came in response to litigation initiated by Oracle in January, alleging that Rimini Street stole copyrighted material using online access codes provided by Oracle customers.

“We are committed to enforcing our intellectual property rights against those who steal or infringe” upon them, Oracle spokeswoman Deborah Hellinger said at the time.

Rimini Street CEO Seth Ravin denied those allegations, pointed out that his company booked more than $150 million in support revenue in 2009, and plans to continue offering a more affordable maintenance and support offering for enterprises desperate to trim IT expenses in this economy.

“Rimini Street looks forward to positively resolving its disputes with Oracle, and we remain focused on continuing to deliver award-winning, ultra-responsive service as always to our fast-growing client base who seeks a better software support value,” he said in a statement accompanying the lawsuit.

“Rimini Street will also continue to aggressively innovate its service offering and expand its popular service to even more software product lines as we continue to execute against our business plan,” he added.

In its suit, Rimini Street said Oracle has been engaged in a “systematic campaign” to disrupt and halt the company’s business since its inception in 2005.

“As Rimini Street’s success grew, so did Oracle’s apparent determination to disrupt Rimini Street’s growth,” the lawsuit alleges.

Rimini Street said that beginning in September 2006, Oracle fired off “numerous” hostile letters, all of which the smaller firm said it responded to and offered to meet with Oracle to discuss any questions or concerns.

In June 2007, Rimini Street said that Oracle interfered with authorized work on behalf of Rimini Street clients by changing its Web site usage terms.

“Rimini Street wrote Oracle about the anti-competitive tactic against Rimini Street and informed Oracle that the change was likely a breach of Oracle’s client license agreements, which expressly prevent service rights degradation,” company officials said.

Additionally, Rimini Street claimed that in December 2008, Oracle blocked its IP addresses and interfered with authorized work for a large client that was switching from Oracle to Rimini Street support. Eventually, Oracle stopped the interference after correspondence from both Rimini Street and the unnamed large client, according to Rimini Street.

Third-party enterprise software support in the spotlight

For decades, enterprise companies have complained to no avail about what they considered excessive maintenance and support fees charged by leading software vendors. But having few (if any) options for responsive and reliable support, they plugged their noses and cut the check.

That’s why some IT consulting and contracting firms are publicly rallying behind Rimini Street in its efforts to take on Oracle and SAP and provide a more affordable support option to the customer community.

“Many of us have been hoping for a vigorous response by Rimini Street and it appears this is what Rimini Street is doing,” Frank Scavo, founder of private management consulting firm Strativa, said in a blog postMonday. “This case is going to bring increased legal scrutiny of Oracle and other major software providers in terms of how they lock in customers to their maintenance and support programs.”

“Oracle runs a risk in filing this lawsuit,” he added. “If Oracle does notprevail against Rimini Street, the case will strongly establish the legal basis for the third-party support industry.”

And while Oracle continues to rack up record earningsand outline its big hardware plans for the Sun Microsystems gear it recently acquired, some customers are already fearing the worst when it comes to maintenance and support fees.

Two weeks ago, Oracle issued its hardware support manifesto(PDF format), telling customers that “when acquiring technical support, all hardware systems must be supported (e.g., Oracle Premier Support for Systems or Oracle Premier Support for Operating Systems) or unsupported.”

This take-it-or-leave-it position goes for all systems running Solaris version 10.9 or later, those running Enterprise Linux and Oracle VM, as well as “all hardware systems for which you have applied services received under a technical support contract for another hardware system (including sharing of updates, patches, fixes, security alerts, work-arounds, configuration/installation assistance or parts),” Oracle said.

And if you don’t play ball by Oracle’s rules, you’re on your own. Customers who don’t purchase support for hardware systems aren’t allowed to obtain “maintenance releases, patches, telephone assistance, or any other technical support services,” the hardware support policy concluded.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.