Rival interested in buying TomorrowNow

Rival interested in buying TomorrowNow

Rimini Street may bid for SAP’s third-party application support firm

Rimini Street has confirmed its interest in acquiring fellow third-party business applications support provider, SAP-owned TomorrowNow. The move could extract SAP from a tricky position and create a new leader in the alternative support market that analysts say is showing healthy growth.

TomorrowNow provides support for PeopleSoft, JD Edwards and Siebel applications, as an alternative to maintenance provided by Oracle, the owner of all those lines. However, several executives have departed the firm in the last fortnight and SAP has announced that is considering options including a sale of the unit. The announcements came in the wake of an ongoing legal case with Oracle over TomorrowNow staff allegedly downloading certain customer-support documents. The affair may have led SAP to fear damage to its reputation.

In an email, Las Vegas-headquartered Rimini Street confirmed its interest but a spokesman added that the firm is “proceeding cautiously … since Rimini Street is already seeing SAP/TomorrowNow clients migrating to Rimini Street”.

Rimini Street, itself set up by a former TomorrowNow executive, said the market for alternative applications support was more than doubling annually and claimed its business has grown four-fold since Oracle filed suit against SAP.

The firm's spokesman added that it expects soon to announce plans for a European presence. TomorrowNow already has offices in London and Amsterdam. In an interview last December, TomorrowNow’s Nelson said that the firm planned to add support for more application suites, including Baan, and added that the company wanted to be the “emergency support team” for ERP users.

Forrester Research analyst Ray Wang said that TomorrowNow’s problems disguise a buoyant sector.

It is “too early to call the death of third-party maintenance”, Wang wrote in an email, adding that ERP maintenance “remains a huge pain point for customers”.

Wang said the market had been healthy enough for TomorrowNow to grow to about 150 employees and 300 customers, and was strong enough to accommodate a 50-customer rival in the form of Rimini Street. Chinese services firms could also pop up as alternative support sources, he predicted.

However, UK Oracle User Group chairman Ronan Miles said he was unsurprised by SAP saying it could jettison TomorrowNow.

“The path of JD Edwards [in being acquired by PeopleSoft and then subsumed by PeopleSoft’s sale to Oracle] caused a number of customers to look at TomorrowNow but in the end they didn’t jump,” Miles said. “Oracle did a ‘good enough’ job in calming the customer base and the customer base was in a position to give the whole acquisition path time to settle down.”