ServiceNow and Rimini Street partner to bring AI to global ERP systems

ServiceNow and Rimini Street forge groundbreaking partnership: ServiceNow has announced a strategic alliance with Rimini Street, a leading third-party software support provider, to bring AI innovations to on-premises ERP systems worldwide.

• The partnership, revealed as part of ServiceNow’s Q3 2024 financial results, aims to create a new enterprise software model that allows existing on-premises ERP systems and other enterprise applications to leverage ServiceNow’s AI platform.
• This collaboration combines ServiceNow’s single architecture and data model with Rimini Street’s proven third-party software support capabilities to enhance customer innovation across key business areas such as procurement, finance, supply chain, HR, customer service, and IT.

Impact on on-premises ERP customers: The partnership offers a lifeline to organizations that have delayed their transition to SaaS or vendor-hosted cloud offerings for ERP, SCM, HCM, and CRM systems.

• Many companies have hesitated to upgrade due to the high costs and complexities associated with multi-year, multi-million-dollar transformation programs.
• This reluctance to upgrade has often resulted in a lack of access to new vendor AI innovations, a major drawback for businesses seeking to stay competitive.
• The rising support costs from software vendors like SAP and Oracle for legacy on-premises systems have driven many customers to seek third-party support providers like Rimini Street to reduce expenses and extend the life of their perpetual license applications.

Addressing modernization concerns: The partnership effectively counters the primary criticism of third-party software support – the lack of modernization and inability to add new AI innovations.

• By partnering with ServiceNow, known for its modern platform enabling workflows, automation, AI, and service management capabilities, Rimini Street has addressed this concern head-on.
• Customers using Rimini Street can now add a layer of AI and automation innovation to their existing systems without undergoing costly upgrades or transformation programs.
• This allows on-premises customers to access innovation immediately, particularly valuable in the current economic climate of uncertainty and inflation.

Implications for SAP customers: The partnership offers significant benefits for SAP S/4HANA on-premises and ECC on-premises customers.

• These customers can now leverage ‘Business AI’ innovations without waiting to complete or even initiate expensive ‘RISE with SAP’ S/4HANA cloud programs.
• Many SAP customers who have switched to Rimini Street for third-party support due to rising SAP support costs can now innovate within their current systems, empowering them to transform without disruption.

Competitive landscape in enterprise software: The partnership comes amid intensifying competition among enterprise software mega-vendors.

• SAP, Oracle, Workday, Salesforce, and ServiceNow are vying for market share and positioning in ERP, HCM, SCM, CRM, and ITSM, with only two successfully positioning as end-to-end platform companies.
• The race for enterprise AI is accelerating, with recent announcements from Workday and Salesforce on a federated data model partnership, Oracle’s multi-cloud partnerships, and SAP’s enhanced business AI offerings.

Broader implications: The ServiceNow-Rimini Street partnership represents a significant shift in the enterprise software landscape, potentially altering the dynamics of cloud migration and on-premises system support.

• This collaboration offers a middle ground for organizations hesitant to migrate to the cloud, allowing them to benefit from AI innovations while maintaining their existing on-premises infrastructure.
• The partnership may pressure other software vendors to reconsider their strategies for supporting and innovating legacy systems, potentially leading to more flexible and customer-centric approaches in the industry.