Oracle implementation and development specialist Red Rock Consulting is thriving on a new revenue stream: the outsourcing of support services for the Oracle platform.
With over 70 Oracle-trained staff, Red Rock Consulting claims to be the largest independent Oracle consulting house in Australia. Its traditional revenue streams have been through selling, implementing and developing on top of Oracle applications.
Red Rock director Jonathan Rubinsztein said the niche channel player is winning many bids that the Big 5 consulting firms and even Oracle themselves would be keen to get their hands on.
“To a large extent, the Big 5 have pulled out of Oracle’s ERP (enterprise resource planning), CRM (customer resource management) and supply-chain apps as their practices no longer have a competitive edge over niche players,” he said. “People went to the Big 5 for risk, but what they have since realised is that the Big 5 is not foolproof and you are going to pay twice as much for the same quality of service.”
He predicts that niche players will continue to make inroads as they offer better value for money, and being a local company are likely to be more responsive to their customer’s needs.
Nevertheless, the young profit-share company is continuing to innovate in an effort to make further gains on its giant competitors. Red Rock has begun convincing customers to outsource the support of their Oracle systems with promises of reduced costs and risks, and improved quality.
“We can reduce the total cost of ownership for supporting Oracle systems by up to 40 per cent if you take into consideration the annuity support costs over a period of 10 years,” Rubinsztein said.
Over 30 medium and large-sized Australian organisations have already signed on for the support services, some of those being existing customers and others being new customers that have simply decided they cannot afford the cost of managing the systems in-house. Red Rock has subsequently diverted or hired 22 staff to work in Red Rock’s support centre (via a VPN or dedicated line connection to customer’s systems) or on-site at customer locations.
Using a variety of database tools, Red Rock claims to be able to significantly reduce the cost of supporting Oracle environments. These support services often negate the need for the customer to employ database and system administrators. “The beauty of our support services is their flexibility,” Rubinsztein said. “Customers can choose to outsource all or just part of their systems.”
While most customers already contract Oracle for support services, Rubinsztein explained that these services are limited to “product support” such as upgrades and patch releases. “We work closely with Oracle -- they see that we are fulfilling a need, a gap in the market,” he said.
Rubinsztein said large consulting companies are struggling to be flexible enough to meet customer needs in Australia. Young companies like Red Rock on the other hand bill all of their support customers differently. The billing options depend upon a customer’s uptime requirements, risks and costs. “Oracle and PricewaterhouseCoopers and the like are so inflexible from a methodological perspective,” he said. “What they don’t realise is that customers have different risks and billing requirements.”