The long and winding legal saga between Oracle and Rimini Street over the latter's third-party software maintenance service reached a pivotal point this week with a Las Vegas jury's award of $50 million to Oracle.
However, the legal dispute between the companies is far from over, given the potential for an appeal as well as the existence of other legal actions between the companies.
Nor did the judgment provide what many observers have been wanting for years: Clear-cut rules of engagement for providing third-party support in a legal manner.
That's not quite how Rimini Street sees things, though. “We were pleased to finally get our day in court," Rimini Street CEO Seth Ravin said in a statement. "As Oracle and Rimini Street agree, there is no dispute that third-party support for enterprise software is permitted for Oracle licensees to purchase and for Rimini Street to offer. This case was about a good-faith license dispute regarding processes no longer in use."
Oracle's View
I spoke with Oracle EVP and general counsel Dorian Daley in the wake of the verdict. She unsurprisingly had a different view of it than Rimini.
"The verdict is a validation of what we've been saying for years," Daley says. "Rimini's business model is based on massive copyright infringement and it has to stop. We are hopeful customers become aware of this, will reconsider and return to Oracle where we can provide them with excellent service."
I asked Daley whether Oracle agrees that customers have a right to purchase support from a third party, rather than only Oracle itself.
There are third-party support companies operating today that haven't fallen afoul of required laws and guidelines, Daley says.
Also, despite what press reports on the case would have you believe, it's not true that Oracle is waging a general war on third-party support, according to Daley. "Take a look at our record and our history," she says. "We do not file a lot of lawsuits but when our intellectual property is at stake, we do."
Customers should be skeptical Rimini has truly changed its business model, Daley says.
Oracle is now seeking an injunction against Rimini. This is a pointless pursuit, according to Rimini.
"Once Rimini Street had the benefit of a judicial interpretation of disputed Oracle software license terms, we stopped all processes challenged by Oracle in this case and completed our transition to an all-remote support model in 2014," the company said in a statement. Therefore, Oracle’s request for injunction for processes no longer in use at Rimini Street is meaningless, as Rimini Street will explain in its forthcoming court filings.”
The Bottom Line
Oracle and Rimini's legal battle has gone on for more than five years and there is no end in sight, despite what you might read in the headlines, due to continued disagreement over the validity of Rimini's revamped processes.
Rimini has asked the court to declare that its current processes for PeopleSoft support do not infringe on Oracle's copyrights, something Oracle surely will fight against vigorously.
At the same time, that's an argument about process—not whether third-party support as a concept is legal. It certainly is, affirmed by arguments in this case as well as many conversations Constellation has had with legal experts.
Customers need to assert their right to third-party support, however, since incumbents like Oracle certainly aren't going to champion the option.
"There really isn’t much incentive for on-premises software vendors to endorse third-party maintenance," says Constellation Research founder Ray Wang. "However, as a key part of Constellation’s Software Bill of Rights, it’s an option that customers should protect and demand of their vendor."
Constellation believes that independent support (i.e. third party maintenance) is a key pillar of providing a win-win to customers and vendors, Wang adds. Customers should consider these options where possible regarding on-premises software when they are:
1. Considering contract negotiations on maintenance
2. Evaluating platform upgrades and cloud migration
3. Identifying cost savings to pay for future innovation
One of the benefits of on-premises software is that the customer still controls the software. Unlike the cloud, where customers “rent" their software in exchange for subscription pricing and faster innovation cycles, on-premises allows the customer to consider options such as independent support. As more customers move to the cloud, they will want to find some similar protections in order to avoid the impending cloud vendor lock-in that is already happening with some vendors, Wang says.