Reduce Oracle Support costs with Spinnaker Support


In this interview with Nigel Pullan VP EMEA of Spinnaker Support, we learn about alternative  Oracle support models for Oracle customers

The opinions expressed and information given in this article are those of the interviewee and do not reflect the views of (or anyone affiliated with) Madora Consulting 

I’m Kay Williams from Madora Consulting. Today I’m joined by Nigel Pullan, a VP of EMEA. Spinnaker.  Thanks for joining me today. Nigel, can you just introduce yourself to explain what your role is within Spinnaker Support?

Nigel: Yes, certainly. My name is Nigel Pullan. I’m responsible for pretty much everything outside of North America for Spinnaker Support. That involves not just the operations here in the UK but all of those throughout Europe, Middle East, Africa, and Asia-Pacific as well.

If you just tell a little bit about Spinnaker Support, Nigel. How big is the company?

We’re about 250 people around the world now. We’ve got revenues of about $50m Also, growing at 35% to 40% a year.

Where are the 250 people based?

We’re headquartered in Denver, Colorado which is where the company started 8 years ago or so. Since then, we’ve built additional support centers around the world. Headquartered in the UK, in Israel, in India- which is more of a back office development type of office. Also, in Singapore, in Tokyo, in Japan. That gives us the 24/7 round the world coverage which allows us to support our customers on any of the issues that they have 24 hours a day with expert engineers at their call.

You said the company started 8 years ago. Who started it and how did it come about?

It’s started by the founder of the company Matt Stava who’s still the president and CEO. We’re a privately held company. We took on board a number of customers and employees from a defunct 3rd party maintenance organization called “Tomorrow Now” which had been owned by SAP, was the result of a large lawsuit, and SAP decided they didn’t want to do this anymore. We picked up a number of customers and employees on the JD Edwards side which was the first product we supported. We, over the years, have added new Oracle products and SAP products to our product portfolio. We have supported now well over 500 customers during that period.

I understand Spinnaker Support offers alternative Oracle Support. Can you just tell me about that, please?

 What that does is for customers who aren’t seeing the value in the annual support fees that they’re paying to Oracle, we give them an alternative. They can come to us and we provide them, we believe and our customers tell us,  better support than they’re getting from Oracle because the people they’re talking to are experts who have been doing this for 19, 20 plus years. They can get their problems resolved by experts very quickly. We have a guaranteed 30 minute response time for serious issues. That means they’re getting their important issues resolved very quickly by experts at a fraction of the cost they’re currently paying Oracle.

I think over the years customers are seeing that the price of Oracle Support has increased and the value has decreased. We’re just giving them an alternative to that level of support.

You mentioned you’re “the fraction of the cost compared to Oracle”. If I have a customer looking at you and Oracle … Why would I choose you?

We offer … the pricing model looks like this. We take what a customer is paying Oracle and we divide it by 2. That’s our starting point. A customer is guaranteed at least a 50% saving. Then, there are many Oracle customers who are over-licensed. They might’ve bought a thousand users in the early days and now they’re only using 500. We also give them an allowance for that shelfware as we call it: Products or users that the customer is licensed for that they’re not using. On average, our customers are savings anywhere between 65- 70% in some instance, off what they have been paying Oracle.

Really, the only thing that they don’t get for that is that they don’t get future versions of the software once they’ve come off Oracle maintenance. Most customers now are looking at that and going, actually, for what I’m paying, the value of what I get on an annual basis from Oracle for that support fees isn’t worth the amount of money that I’m paying. There may be some nice to have feature functions but frankly I could probably get those from a niche player in the market to deliver that particular solution for me and is probably more suited to my needs than any generic functionality that might come from Oracle.

only thing that they don’t get for that is that they don’t get future versions of the software once they’ve come off Oracle maintenance

Who uses Spinnaker Support? What’s a typical customer?

It’s anybody who doesn’t see the value in what they’re paying really. That can be small, medium-, large. Typically, it’s organizations who are looking to make savings. If an organization is cash-rich and has a very close relationship with Oracle, they’re probably not a customer that’s going to come to Spinnaker Support, but for any other organization who maybe just doesn’t want to upgrade to continue to get support. That’s a modus operandi of Oracle that they will force customers to continue to upgrade to be able to stay on support.

We don’t do that. We allow customers to stay with what they’ve got. If the software is doing the job that it was intended to do and the customer doesn’t want to upgrade, they can stay with us for 15, 20 years if they wanted to on that version of the software. We would continue to support it.

How is the 3rd party support market growing?

It’s growing. I think the market is probably growing at 40% a year in terms of the organizations providing this level of service of which we are one and we’re growing at that sort of rate. I think Oracle customers are becoming more and more aware that there is an alternative out there that they maybe weren’t aware of 8 years ago certainly and probably not 3 years ago.

A lot of the analysts now are following this as a valid market. Organizations are having their eyes opened to the possibility of an alternative support just like 20 years ago when you had a new car. You always took it to the dealership where you bought it to have it serviced. Nowadays, it’s more accepted that you don’t necessarily do that. You might take it to the guy down the road who still has an expert engineer to be able to resolve any issues that you’ve got but isn’t actually part of the original supplier of that vehicle. I think the same is now applying more and more to software support.

Why would a customer want to Spinnaker? What should a customer consider?

There’s a number of things here. Firstly, Spinnaker compared to any other organization is unique in the type of services that we offer. We offer not just an alternative support to that which you get from the annual maintenance fees that you pay to Oracle but we offer other services. We offer for some of our customers AMS and TMS- Application and Technical Managed services.

Companies who might’ve been using our support services for a while and maybe have lost a DBA don’t want to hire that DBA back but still want those tests performed on a regular basis. We can do that for the customer as well. We’ve got additional strands to our services that we can offer to our customers to have a more value- added service that they would like to have.

As an organization, we’re profitable. We’re self-funded so every penny that a customer pays to Spinnaker Support actually goes into supporting that customer. We’re not trying to pay off outside debt or investors that might’ve come in. We’re a self-funded, profitable organization that’s here for the long-term.

Most importantly, this industry is littered with companies who have not handled Oracles intellectual property correctly. It’s a very tricky thing to do to be able to support a customer and comply with all of the international, intellectual property laws. We’re very focused on ensuring that we do that correctly which is why we’ve never been sued by Oracle. There are many other organizations out there who are sued, who have been sued, who have lost, and some of those are no longer in business. We maintain the high ground. We’re a very ethical organization and do things properly. We always have done it. We always will.

What’s the biggest customer Spinnaker Support have?

We’ve got a range of large customers. It’s tough to say who the largest one is. There’s some that are large names, large brands, but not necessarily large users of Oracle. Companies that come to us … some of them have been paying worth in excess $3m a year or £2m a year in their software support fees and have cut that by more than 50% and now are paying probably significantly less than a million pounds to have their whole estate … that could be applications, could be technology, it could be middleware. All of those Oracle technologies is supported by us for a fraction of the cost.

What are your plans with regards to a growth strategy within the company?

We’re growing both on the product that we support and we’re growing geographically. For example, earlier on I mentioned that we’ve got a support center in Israel. That’s relatively new. That’s in the past 12 months that we’ve seen that we can get very good skills in Israel. There’s a growing market that’s very acceptable and open to doing 3rd party support. That’s new to us and we’ll continue to grow geographically as customer demand increases.

Secondly, we’re also adding products. I said originally we started with JD Edwards and we’ve added, since then, Siebel. We’ve added EBS. We’ve added Oracle database. Now, we’re getting into a lot more of the other technologies that … golden gate; Other Oracle technologies that are incremental to the support services that we offer. We also added SAP as well. It’s another product line that we support. So we’ve been continuing to look at not just geographical expansion. Also, additional products to be supported and potentially new services over and above the AMS/TMS services that we already offer. There’s plenty of opportunity for growth.

What presence do you have within the UK?

We’ve had a presence in the UK from day 1. It wasn’t that we were a U.S. organization who has gradually grown. The original customers that came across from “Tomorrow Now” and the people were based around the world. We inherited a staff of 5 or 6 people on day 1 which is now grown to around 25 people in the UK and growing daily. We’ve got a new person starting Monday. As we go through the tail end of the year when more SAP customers come on board because that’s the profile of customers that SAP are. They all come on board on January 1st. Then, we’d be building some additional expertise there. I suspect we’ll be well over 30 people by the end of the year.

To view Spinnaker’s Oracle Support Services Page click here

How does Spinnaker Support actually work? Is there a customer locked into a contract with you?

We’re really flexible on the terms we offer our customers. Not only in terms of the length contract. It can be 1 year. It can be 3 years; can be 5 years. Obviously the longer a customer ties in, the more financially beneficial it is for them.

We also build in mechanisms within our agreements with customers that says if your usage of the software goes down over time, then so do your support fees. If your usage goes up, then so do your support fees. We match our fees and services that we offer to a customer’s requirements.

It’s for the customer to tell us how they would like the profile of support to be offered over their next years and we’ll develop a profile that suits them specifically.

What is the process that a customer would have to go through when switching from Oracle Support to Spinnaker?

There’s an overlap period that we call Onboarding. That overlap period can be anywhere from 1 month to 6 months. It somewhat depends on the complexity of the organization, the complexity of the software that they running, how many sites, how many technologies products that they have.

What we do during that period is a number of things. Firstly, we help the customer to archive everything that they have the rights to under their current support agreement. If a customer is not on the latest version of software, they have the right to download and store somewhere on their premises the latest versions of the software so that they can upgrade to that at some future point in time should they wish to. They also, should I say, download in an archive … any fixes, and patches, and upgrade scripts; anything that’s associated with the software infrastructure that they have; that they have the right to under their agreement that they can download an archive and store somewhere for future use.

What we also do is to ensure that there’s the correct type of connectivity. All of our support that we offer to our customers is typically remote. Sometimes, we go on site but it’s very rare. Most of our support is remote, because it’s very responsive, we respond within half an hour. We’re on a VPN line into the customer’s environment; testing development environment. Finding out, analyzing the issue, getting the fix installed and resolved so that the customer can be up and running as quickly as possible. We need to make sure that connectivity is correct.

We need to train their staff on how to log a ticket with Spinnaker as opposed to logging a ticket with Oracle. How they get onto our portal … who is their support engineer? What I mean by that is we provide a dedicated team of people. It’s always the same people that they are talking to. They get to know us, we get to know them and their environment which makes for a much tighter type of support that we offer to our customers so that they are getting the best level of service 24/7, 365 days a year.

We build that sort of team together to ensure they know how to work with Spinnaker Support and then we move on from there so that when the actual support date comes where they switch over from Oracle to Spinnaker then it’s a very simple transition. It’s just a flick of the switch.

Everybody knows what they’re doing. They will have transferred over the ticket so that Oracle haven’t got around to answering yet. They move them over to Spinnaker and we start working on those straight away.

Apart from Oracle Support what other services do you offer?

I touched on the fact that we offer AMS and TMS services. We could offer for staff augmentation for people that go on maternity leave, for people that are going on holiday, for staff that have left but the customer doesn’t want to replace them. There’s plenty of services that we can build around the support capabilities that we are already providing to the customer. We continue to do that.

Sometimes, for example, companies come to us because they’re moving away from the software that they’ve got installed. They may have JD Edwards installed but they’re moving over to SAP. They don’t want to get rid of their JD Edwards support engineers. They want to cross-train them on the new SAP technologies and keep them with the company. Doing that leaves a vacuum in the JD Edwards support within the customer’s organization so sometimes we’ll offer second level and even first level support and really take over the whole of their support infrastructure whilst they’re transitioning their people and their technologies onto new product.

There’s plenty of different levels of support and services that we offer our customer based on the customers demand and what it is they’re looking for. We feel we are  very customer-centric. We’re extended parts of the customer’s support organization. We have regular meetings, usually monthly so that we understand what the future direction of each of our customers is so that we can build a support capability to ensure that they get from A to B effectively.

How do you overcome the fact that you don’t have access to a code base and therefore, future patches or updates?

There’s a number of things hidden in that question there. Some of the application software that we support does have source code. That’s what we use to provide fixes. Oracle EBS comes with 95% of the source code with it so that’s what we use to create fixes when we need to. Some of the other applications, don’t. For example, Siebel, which is an Oracle product on CRM. That doesn’t come with a source code, but it comes with many, many, many user exits that we can use to write our own scripts to bypass an issue that may have occurred within the Siebel software.

There’s other parts of the software where there’s no source code whatsoever. The way we provide fixes for that is to provide some … either work arounds, wrap arounds, reconfigurations, parameterizations … there’s always a different way of resolving the problem rather than just going in and fixing the source code to it. In the 8 years that we’ve been in business we’ve never had an issue that we’ve been unable to resolve purely because we don’t have the source code access. There’s always 2 ways of doing this.

The following three questions are not contained in the audio but added after the recording

[What are the most common reasons customers switch to Oracle support alternatives?

Oracle customers move to third-party support for a variety of reasons, but the most common one is a lack of value. Customers don’t feel that they are getting the return on investment for the money they pay to Oracle each year.

While Oracle’s costs are rising, the quality of support is not rising along with those costs. In fact, many customers feel the quality of support has gone down. The consolidation of support centers to lower cost geographies signals that support will most likely continue the downward trend.

Lastly, new versions of Oracle do not deliver the relevance of the functionality as they did in the past. Today, most of Oracle’s investments are going toward cloud applications. For customers what aren’t ready to be pushed that way, there is a value in staying with their current version and moving toward a third-party support solution such as Spinnaker Support while reducing costs.

What is Oracle’s response to losing a customer to third-party support?

Oracle does accept third-party support as a viable alternative. However, Oracle does not like losing customers and has been known to threaten customers with financial penalties if they ever want to return to Oracle support. In our experience, we have not seen that happen; Oracle will welcome a customer back to the fold rather than lose them to a competitor.

How do Spinnaker Support’s services compare to the competition?

Spinnaker Support offers a broader range of services than our competitors. In addition to offering high-quality support and maintenance services, Spinnaker Support has a consulting division and divisions offering AMS and TMS services that customers frequently use as an extension of their maintenance services. Lastly, we make sure that our services remain in line with Intellectual Property laws and adhere to Global Tax and Regulatory Compliance standards. Spinnaker Support has never been sued and found liable by Oracle, or anyone else, for infringement or fraud.]

Thanks very much for your time today, Nigel, and for sharing all the information about Spinnaker Support. If any listeners want to contact you for any more information, what is the best way of doing that?

I’m on the website. You can find me on the Spinnaker Support website- www.spinnakersupport.com. They could clearly email me directly at npullan@spinnakersupport.com. Either way, their request will be treated firstly, confidentially and secondly, very promptly. Somebody will be there to answer your question very quickly.

 

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