(inspiring music) >> Hey welcome back everybody, Jeff Rick here with theCUBE. We're in our Palo Alto studios for a Cube Conversation. 2018 is winding down, I think we're at our last big show of the week, this week at KubeCon. It's always nice to get back into the studio, things are a little bit calmer, a little bit less hectic, and learn about new businesses, new companies. So we're excited to have, I think first time to theCUBE, Seth Ravin, he is the CEO and co-founder of Rimini Street. Seth, great to see you. >> Thank you very much, good to be here. >> Yeah, welcome. So for the folks that aren't familiar with Rimini Street, give us a quick overview. >> Sure, Rimini Street is a 13 year old company. We went public last year on the NASDAQ, RMNI. >> Congratulations. >> Thank you. We have 1,100 people or so, operating in 18 countries, and we're servicing nearly 2,700 companies that have moved and used Rimini Street services around the world, including about 150 of the Fortune 500. >> You've got a pretty interesting business model. Very, kind of, innovative, but it's one of those so simple and so obvious, why didn't anybody see it ahead of time? So, tell the folks what your basic, core business model is. >> Sure, the enterprise software space has about $160 billion that's spent every year on annual maintenance fees. And, of that, Oracle and SAP have about $32 billion in annual fees. But this market has not been a competitive market. Those companies drive north of 90% profit margins, and their customers are not all that happy with the service. So we came in and offered a service at 50% off that provides a better service overall, for customers, and makes them very happy. >> Right, so the core components of a maintenance contract, so they pay their licensing fee and they pay, whatever, 15, 20% of that licensing fee for the maintenance. They're getting patches, they're getting upgrades. What are some of the other things that should be included in that maintenance fee? >> Well what they get is, they would get upgrades, they would get updates, which includes tax, legal, and reg updates, which everybody needs when you're running a global company, for, whether it's payroll taxes or financial taxes. You also need, when things break, you need to get them fixed. You also need advice and counsel in these very complex, large systems. And Rimini Street comes in, and what we don't do is we don't offer upgrades. We don't offer new versions of the product. What we do do is extend the life of these existing products for 15 to 20 years, beyond what the vendor would consider their normal support life. >> Right. So there's a whole bunch of things that work into that. One of 'em is, they want it to be supported, or they want you to have the latest patches and stuff so that they'll continue to support them. You've basically, per our earlier conversation, just basically taken over that whole responsibility, so not only the software patches and changes, but also then the support on top of that. >> That's right. In fact, we have support with less than five minute turnaround time, with a senior engineer, 24 by seven. So we've really offered a concierge level of service at half the annual fees. So our customers can save up to 90% total operating costs on these large, complex systems. >> So it's pretty, (laughs) it's kind of hard to grasp at first, but I think you gave a great analogy before we went on air, which is kind of like getting your car fixed. Take it to the dealer, or take it to Bob's Mechanic. And if you can get the quality of service, customer service, same parts, it's actually for a lot of people a better alternative. And that's kind of what you're doing, right? >> That's right. Think of it as, you could take your car to the dealer, you could take it to your local mechanic, who you might think is better at fixing that system. We have hundreds of engineers around the world, and we think that we are very very good at fixing these core systems and providing the updates that are needed to keep them moving forward. And I think one of the other parts that's really important here, is this is a difference between two different directions that every single licensee of someone like an Oracle or SAP product has to make a decision on. Number one, do you go down the vendor's road map, which includes, if you follow their road map, that's upgrades and updates and costs that are very expensive, that are designed around what the vendor wants to do, and the vendor's needs. Or, you choose to go down a business-driven road map, which is the focus around the company, and focus around competitive advantage and growth. And we are the company that works on the business-driven road maps. >> And you made a good point earlier, 'cause we talked about updates on our mobile phones, and DevOps, and we're at KubeCon, it's all about DevOps, and patches are coming out all the time, and updates are coming all the time. But the systems you're talking about are big, nasty, hairy ERP systems. These are not things that you want to be changing all the time, and in fact for a lot of cases, you probably don't, I would imagine the biggest value, one of the biggest values for your customers is extending that lifetime of that current install, and continuing to get the support which is threatened if they don't continue to pay the tax to the big red machine. >> That's correct. Instead of paying a 20% annual fee just for the maintenance on it, they can focus at saving half of that money, putting it into new innovation into their environment. And the kind of changes you're talking about, they're systems of engagement. So on the front end, where we interface with customers, and vendors, on the front end that's constantly changing, that's a dynamic system. On the back end where we work, these are big core transaction systems where change introduces risk into the system. We want to run these systems for a long time. We don't have competitive advantage on the back end of our financial system. Competitive advantage is done on the front end, where we compete against other people in the industry. >> So how'd you come up with the idea? I mean, it seems so obvious in hindsight, again, with the car repair analogy, which is just dead dumb simple. But what did you see, you were in the business, and what was your kind of experience in kind of the other side that got you to think, hmm, here's an opportunity that I think a lot of people would like to take advantage of? >> So I was part of the management team building out PeopleSoft for many years, and I was in a business where I was part of the team that had to try and force customers to take these upgrades. That was one of my jobs, was to move people forward onto these new releases. And I had an epiphany one day, that said, really, I am tired of selling people things they don't want, and let's focus on selling people what they really need. And this is a function of the maturity of the products that we deal with. They are so mature that they don't need to be changed out that frequently. So we want to move away from what the vendor wants, and we want to focus in on what is right for the company to allow them to shift more spending into these systems of innovation, that they have to do because the CIO world, IT is changing. The mission of IT is to support competitive advantage and growth now. It's not just to run a data center. >> Right, and as you said, taking a patch is not just like a quick update on your phone. You got to bring systems down, you've got labor components, you've got, again, complex APIs and connections that have to be managed, so, so these are pretty disruptive processes that people had to do, you had no choice if you wanted to keep your support active, right? You had to do it. >> And thousands of Rimini Street customers don't have to worry about all of those risks being introduced into their environment. And when things do need to be changed, proactively, like a tax, legal, and regulatory update, they get those. And if they need support, they have a very fast turnaround with an assigned engineer. So we've really changed the dynamics of the support model into one that people rave about, because it works very well compared to your typical call center model. We have no call center. So, our customers call their engineers directly, which allows them to get support from senior people very quickly. >> Right. So the other part you touched on, is then that frees up the CIO, and the inside team, to worry about front end innovation, to worry about some of these other more dynamic processes, where you do have to be a little more active, you do have to be on the cutting edge, you do have to be more responsive to competitive threats, which is not an ERP upgrade, but it's a new app, it's a new, you know, whatever. Versus (laughs) the unplanned, unwanted, and unanticipated forced process on a back end that you didn't even, maybe, want to, or see the benefit of. >> That's correct, and CIOs have to decide how they're going to distribute their budget between, what we say, keeping the lights on, a day to day operating cost, and then how much they're going to spend in innovation. And many customers wind up spending, just like a federal budget deficit issue, they spend 90% of their budget keeping the lights on, paying maintenance bills, running a data center, and that leaves very little money for innovation, which they need for that competitive advantage and growth. We are helping them shift money from the side of keeping the lights on, into innovation. >> So where do you guys go next? Is it just more of the same, the big giant TAM, obviously a whole lot of Oracle, SAP, and other enterprise applications, is that really your mission going forward, freeing up people to do the more innovative and creative, you're basically kind of offloading a big headache. >> Sure, but I think what you're going to watch is we expand the services that we cover. Today, we replace the vendor's maintenance. Tomorrow, we may do more of the work inside the IT organization. All support, but expanding the definition of support so that we can provide freed-up capital, time, and resources, to focus on innovation. As you know, in today's world, you're either growing or you're dyin'. There is no status quo left in this world. It's too competitive. And so we are helping companies make sure they keep their competitive edge, and gain new ones. >> Well it's a great story, and now that you're public, we can all watch it unfold and it looks like you've paid off a bunch of debt recently, I was goin' through some of the financial information, so congratulations, and, really interesting model. I know I use my local car repairman Bob. As long as he keeps deliverin', I'll keep goin' back, and so I imagine once you get seated in, it's probably a good long term relationship. >> Yes, that's the thing, it's a recurring revenue business. We're a subscription, just like a SAS business, only we're subscription revenue on maintenance. >> Alright, well Seth, thanks for taking a few minutes of your day and sharin' your story. >> Thank you much. >> Alright, he's Seth, I'm Jeff, you're watchin' theCUBE, we're at our Palo Alto studio havin' Cube Conversations. Thanks for watchin', we'll see you next time. (inspiring music)