In a surprising turn of events for enterprise resource planning (ERP) customers globally, as part of its Q3 2024 financial results, ServiceNow announced a new expanded partnership with one of the most popular third-party software support providers, Rimini Street. Both companies are creating a new enterprise software model that will allow existing on-premises ERP systems and other enterprise applications to add new AI innovations using ServiceNow’s AI platform. The new offering will leverage the single architecture, single data model of ServiceNow with Rimini Street’s proven independent third-party software support capabilities to add and enhance customer innovation across several key pillars such as procurement, finance, supply chain, HR, customer service, and IT.
This is welcome news to many on-premises ERP and other large enterprise application customers worldwide who have stalled their move to SaaS or vendor-hosted cloud offerings for ERP, SCM, HCM, CRM, and more, as they tend to be multiyear, multimillion-dollar upgrades or transformation programs. Often, not upgrading means no access to new vendor AI innovations. Many such customers are also facing rising support costs from software vendors like SAP and Oracle to their old on-premises footprint. This, along with end-of-support software deadlines, has triggered a move to third-party software support providers such as Rimini Street to significantly save on software support and maintenance costs and prolong the life of their on-premises applications for which they own perpetual licenses.
Lack of modernization and an inability to add new AI innovations were often cited as the biggest industry critiques of moving and staying with third-party software support, but Rimini Street has just squashed that concern by partnering with ServiceNow, which is well known for its modern platform enabling workflows, automation, AI, and service management capabilities. Legacy or on-premises customers using Rimini Street can now add a complex layer of AI and automation innovation over these existing systems without having the need to undergo costly and complex upgrades and painstakingly expensive transformation programs. Customers need not wait several years to complete upgrades to access AI innovations offered by software vendors. On-premises customers can access innovation now when it is most needed in these economically uncertain and inflationary conditions.
SAP S/4HANA on-premises and ECC on-premises customers will rejoice knowing that they don’t have to wait to complete (or even start, for that matter) their RISE with SAP S/4HANA cloud programs (often considered very expensive in the industry) to leverage Business AI innovations from SAP. Many existing SAP customers have been using Rimini Street for third-party software support due to the rising cost of SAP support over the last two years and to extend the life of their ECC systems and on-premises S/4HANA systems. These customers will now have the ability to innovate right where they are, which puts the power back into the hands of the SAP customers to be able to transform without disruptions.
The industry has seen SAP change its RISE with SAP offering over the years, and 2025 and beyond will see further expansion on what is traditionally considered RISE with SAP and Cloud ERP. Both SAP and ServiceNow reported great Q3 2024 financial results. Industry competition is getting stiff between the five enterprise mega vendors — SAP, Oracle, Workday, Salesforce, and ServiceNow — to gain market share and positioning in ERP, HCM, SCM, CRM, ITSM, and more, with only two of them successfully positioning as an end-to-end platform company. The race to enterprise AI is heating up, with Workday and Salesforce announcing a federated data model partnership, Oracle announcing several groundbreaking multicloud partnerships, and SAP upping its game for Business AI. While most of these innovations are in SaaS or vendor-hosted cloud offerings, on-premises customers are often left in the dust! This is precisely why this ServiceNow and Rimini Street partnership offers some reprieve to customers worrying about having no access to AI innovation if they stalled their move to SaaS or cloud platforms.
For more insights on the entire third-party software support market, Rimini Street, or this specific announcement, clients can book time with me (inquiry or guidance session).