Maintenance fees carry extremely high profit margins for vendors such as Oracle, who are loath to see a major third-party support market emerge. It's believed that the outcome of Oracle's lawsuits against Rimini Street and CedarCrestone could provide clearer ground rules and depending on what happens, potentially spark the industry's larger systems integrators to get in the game.
Oracle won a substantial settlement against SAP in connection with TomorrowNow, but that case has yet to be fully resolved. It may be a substantial amount of time before the Rimini Street case concludes as well.
While it's difficult to predict how they will turn out, such legal disputes do provide the benefit of "shining a spotlight on vendor maintenance programs," said analyst Frank Scavo, president of consulting firm Strativa.
"Buyers need to understand the long-term cost of ownership for any ERP product," Scavo said. "Many buyers negotiate hard on the initial software license cost, but accept the maintenance fees as a given. They don't realize that over a five-year period, maintenance fees can equal or exceed the initial license cost. Many buyers do not fully take those costs into account. They should."
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