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More than 10 Australian federal and state government agencies will now have their SAP and Oracle enterprise software supported by Rimini Street in a blow to the two enterprise technology behemoths’ support revenues.
The agencies that have made this move include NSW Department of Family and Community Services, Victorian Government Department of Economic Development, Jobs, Transport and Resources, Australian Hearing, and Open Universities Australia.
According to Rimini Street, a third-party supplier of support services for Oracle and SAP software, claimed that these agencies have realised savings of up to 90% on total maintenance costs compared with what they were paying the two software suppliers.
“Every year, the federal, state and local levels of the Australian government spend hundreds of millions of dollars on their SAP and Oracle maintenance,” said Andrew Powell, general manager at Rimini Street Asia-Pacific.
“The vendors’ typical profit margin for annual software maintenance is around 90% and very little of the underlying service is actually provided from within Australia.”
Powell added that the introduction of stiff competition in the market for support services will drive “huge savings” across the Australian government, giving public sector agencies control of their IT roadmaps to ensure they are business-driven focused, versus dictated to them by the supplier.
“That is a good thing for all Australians, in fact, it’s a game changer,” he said.
A global survey conducted by Vanson Bourne and sponsored by Rimini Street revealed that 89% of organisations across the globe agreed they should be spending more on innovation, while 77% believe they are spending too much just “keeping the lights on”.
In the public sector, 70% of respondents cited being “locked into supplier contracts that restrict innovation” as an additional top blocker to their innovation efforts. For public sector organisations that were able to find funds for innovation, 32% already experienced improved productivity, with 35% stating they have experienced an increase in customer satisfaction.
Additionally, those public sector organisations that have been able to invest in innovation initiatives cited a nearly 15% decrease in the organisations operating costs overall, indicating a measurable return on their investment.
“As they are funded by the public purse, Australian government agencies must demonstrate the money they are spending not only adheres to strict budget guidelines, but also generates real business value,” Powell said.
“This accountability model places pressure on those organisations to not only stretch budgets, but to establish sound strategies for innovation despite their financial pressures.”
Oracle and SAP representatives in Australia declined to comment for this story.
Read more about enterprise software in Australia
- Oracle is offering a broader range of cloud services from its Sydney datacentre to meet the needs of enterprises that have data sovereignty and low-latency requirements.
- For nearly 30 years, the Asia-Pacific region has played a big part in contributing to SAP’s fortunes.
- Nginx has set up shop in Australia to support companies embracing microservices.
- Oracle’s Mark Hurd contends that having a common user interface and the ability to support data flows across a business are key capabilities that will spur the dominance of software suites over time.