Enterprise software firms Oracle and SAP face a potentially dangerous threat from smaller companies, according to US financial magazine, Barron's.
Small start-ups are beginning to compete and win in the very profitable area of fixing and upgrading computing systems, Barron's said.
Maintenance fees with margins of more than 90% make up roughly half of Oracle and SAP's total revenue.
But start-ups such as the privately held Rimini Street are able to deliver the same service for roughly half the cost and therefore present a long-term threat to Oracle and SAP, said Barron's.
Rimini's sales increased more than 400% in the first half of 2009, and the Las Vegas-based company plans to hire 60 more people to bring the number of employees to 200 by the year end.
Rimini provides third-party maintenance and support for Siebel, PeopleSoft and JD Edwards business software, all of which were acquired by Oracle in recent years.