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enterprise| enterpriseauthorJoe WilliamsNoneAre you keeping up with the latest cloud developments? Get Tom Krazit and Joe Williams' newsletter every Monday and Thursday.d3d5b92349
January 27, 2021
SAP CEO Christian Klein is trying out a major sales gambit in his attempt to get more customers onboard the software giant's signature cloud platform.
A new offer unveiled on Wednesday called "RISE with SAP" bundles together several products, including the flagship S/4 HANA platform, under one contract with a flat cost, a promotion that the company is hoping will encourage more users to more quickly switch from the on-premise services that dominated the company's product line until the last few years.
The offering, and the promotional blitz behind it, are a culmination of sorts of Klein's work over the past several months to remake SAP. While it signals progress in his vision to become a core tech provider — one that links data from all a company's operations on a single — it's also a big gambit, particularly if Klein can't address key concerns from customers, many of whom might be looking to shrink their IT spend on SAP's products.
To incentivize the pivot, SAP is promising a "highly automated" migration with "near-zero downtimes," effectively a move to try to standardize an often arduous and costly transformation that may have prevented new and existing customers from pursuing such an upgrade. And in a nod to the open partner ecosystem Klein is pushing, those who take advantage can use SAP's cloud, one of several of the major providers (Microsoft Azure, AWS, Google Cloud or Alibaba Cloud) or a private network.
Embedded in the packaged system are also numerous "business process intelligence" tools, such as robotic process automation, that help organizations, among other applications, pinpoint tasks that can be done solely by machines. SAP purchased Signavio, a provider of software that helps businesses manage workflows, to help further amplify these offerings, per a Wednesday announcement.
"We are bundling everything companies need to holistically transform their business, with a fast time to value regardless of their starting point," Klein told reporters.
Since COVID-19 hit, investments in the type of technology that SAP offers, the bulk of which center around the core enterprise resource planning system, fell in priority for many enterprises. Existing customers are also putting off upgrading, instead choosing to elongate use of their current platforms, many of which run via on-site data centers. The convergence of both led Klein to issue a stark warning in October that SAP's recovery would last until 2025 at the earliest. The stock price has yet to fully recover after dropping roughly 23% following that proclamation.
Wednesday's announcement shows that he's hoping to accelerate that timeline by quickly juicing the company's number of overall cloud customers. Under such a system, expensive, long-term contracts are traded for monthly subscription payments. While that might mean lower upfront costs for some clients, industry experts say they may end up paying more over the long term, especially if customers add on other services, which is one reason why the strategy is so attractive for vendors. SAP, for example, previously estimated that cloud revenue could exceed traditional sales and reach roughly $26 billion by 2025.
When asked, on average, how much more clients would end up paying under this promotion, Klein said the offering "has a lot of value in it." A spokesperson declined to say how SAP was factoring this offer into its overall financial outlook.
And for clients that held off on the cloud until now, the offer provides a seemingly viable rationale to move, with one consolidated contract likely covering the bulk of their needs, including service and deployment costs.
"It will take a great deal of work to move these large customized enterprises off of their legacy applications," IDC Program Vice President Mickey North Rizza told Protocol. "SAP customers have been given a pathway towards the intelligent enterprise using modern software."
The offering ran as a pilot project since July, with 130 customers currently signed up. As of Wednesday, it's now available for new and existing customers.
"The machine internally is already ready," said Klein.
Joe Williams
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
People
Making the economy work for Black entrepreneurs
Funding for Black-owned startups needs to grow. That's just the start.
"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.
Photo: DigitalVision/Getty Images
February 26, 2021
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
February 26, 2021
Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.
When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.
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Reaching this milestone is a testament to Tanya's perseverance and resilience as she, like many other Black women founders, struggle to find institutional investors. Our financial system is simply not set up to help Black entrepreneurs launch a business. Most new businesses are initially funded from savings and home equity, but the persistent racial wealth gap in our country places Black would-be entrepreneurs at a dramatic disadvantage since many don't have those assets available. On top of that, of the approximately $625 billion in venture capital invested since 2015, only around $15 billion went to Black and Latinx founders; that's just 2.4% of funding. For Black women founders specifically, the numbers plunge to 0.27% of funding over the past <a href="https://www.projectdiane.com/" rel="noopener noreferrer" target="_blank">two years</a>.
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This is not an issue that will resolve itself; we need to be deliberate about opening doors and bringing down barriers, not just to solve for one Black or minority-owned business at a time, but to rebuild a system that gives everyone a chance. Capitalism has lifted millions of people out of poverty and improved their quality of life, but it has also left many behind. As we now rebuild our national economy, we need to ensure future growth is inclusive, and that small businesses — the backbone of our economy — recover in a way that lifts up promising Black-owned startups at every point in their journey.
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There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help. Here are four insights we've learned from years of working with startups and community organizations.
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<strong>Invest in the network.</strong> Startups like Oakland-based <a href="https://www.mycnote.com/" rel="noopener noreferrer" target="_blank">CNote</a> are working to channel capital to underserved micro and small businesses through a vast network of Black-owned banks, minority credit unions and community development financial institutions that have direct access to many local communities. However, these market innovators are hampered by complex governance requirements that Fortune 200 companies have to put in place before they will do business. We need to make it easier for new players like CNote to pass procurement hurdles and get into the pipeline so they can grow. By helping them on the back end, it opens them up to partnering with large corporates from all across the country.
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<strong>Open up access to markets.</strong> For those Black-owned businesses that do secure a first round of funding, their growth trajectory often slows when it comes to entering new markets. A startup's ability to scale increases exponentially when larger companies with trusted relationships not only make introductions to its partners but also offer the startup's services as part of a proposed solution to customers. This is an approach that has helped <a href="https://mocafi.com/about/" rel="noopener noreferrer" target="_blank">MoCaFi</a>, a New York-based, Black-owned startup that offers banking services to lower- and moderate-income communities, to start working with local city leaders in new markets. This work can be mutually beneficial for corporations: The ability to deliver effective support to underserved communities increases when the right partners with the right solutions are brought to the table.
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<strong>Digitizing access to capital.</strong> Black entrepreneurs are being denied or given smaller bank loans nearly <a href="https://www.federalreserve.gov/publications/2017-september-availability-of-credit-to-small-businesses.htm" rel="noopener noreferrer" target="_blank">twice the rate of</a> their white peers — 54% compared to 30%, respectively. Microfinance institutions and CDFIs have stepped in to fill this void, supporting applications for those previously denied loans. However, the demand exceeds the resources and tools available, and getting funds to those who need it urgently can be challenging. New digital tools can be transformative in this situation if we could accelerate access for these organizations. Many rely on slow paper-based processes, but through the digitization of both applications and distribution of loans, CDFIs like the <a href="https://crfusa.com/" rel="noopener noreferrer" target="_blank">Community Reinvestment Fund</a> and micro-finance institutions like <a href="https://www.grameenamerica.org/" rel="noopener noreferrer" target="_blank">Grameen America</a> have been able to process requests faster, more securely and for more businesses, throughout the pandemic.
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<strong>Going all in. </strong>Finally, one of the most important lessons we've learned is that the programs and partnerships used to tackle these issues can't be just for a moment in time or a single intervention. For maximum impact, companies need to be all in with the full breadth of their assets — funding, product pilots, supplier practices, consulting services, data insights — as this is how to drive a catalytic impact and create a more sustainable, inclusive digital economy.
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As more businesses, CEOs, corporate treasurers and venture capitalists join in this effort, we can collectively help bridge that wealth and opportunity gap. Startups can't scale up if they aren't given that first chance.
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As we are reminded during this Black History Month, the problems of racial economic disparity have existed for too long, and although the challenge seems daunting, we are confident that with perseverance we can successfully build a more just and equitable economy. Our early progress matters, and we should make every effort to build on the first steps by coming together across sectors and organizations so that amazing ideas like Tanya's are embraced from the outset.
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Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
Sponsored Content
Building better relationships in the age of all-remote work
How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.
Image: Original by Damian Zaleski
February 21, 2021
February 8, 2021
Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.
Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.
<p>To keep the lines of communication wide open in this new reality, organizations are adopting new cloud solutions at a rate CIOs expected to see years from now. In fact, 79% of CIOs agree that the pandemic will force their organizations to digitally transform faster than planned, according to <a href="https://slack.com/blog/transformation/people-partners-systems-slack" rel="noopener noreferrer" target="_blank">J.P. Morgan</a>. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>But executive leaders know it takes more than just adopting a communication platform or software bundle to build relationships remotely. You have to find the <em>right</em> solution that meets both your internal and external collaboration needs. That's why competitive businesses today are turning to Slack, the <a href="https://slack.com/features/channels" rel="noopener noreferrer" target="_blank">channel-based messaging platform, </a>to close communication gaps with partners and customers in the age of remote work. Companies can securely collaborate with external parties using <a href="https://slack.com/help/articles/360017938993-What-is-a-channel" rel="noopener noreferrer" target="_blank">Slack channels</a>, a single place to share files and messages, in the same <a href="https://slack.com/resources/using-slack/setting-up-a-shared-channel" rel="noopener noreferrer" target="_blank">Slack workspace</a> through <a href="http://slack.com/connect" rel="noopener noreferrer" target="_blank">Slack Connect</a>.</p><p>With Slack Connect, organizations can build stronger customer and partner relationships through real-time communication. And unlike email—which leaves users open to the risk of spam and phishing—companies and external parties receive communications only from <a href="https://slackhq.com/introducing-new-layers-of-enterprise-grade-security" rel="noopener noreferrer" target="_blank">verified members in Slack channels</a>. Plus, Slack workspace administrators can maintain control over data and monitor external access. </p><p>Here's a closer look at how teams at Stripe, Xero and ModSquad are using Slack Connect to engage customers, prospects and partners in real-time and close deals faster. </p><h4>Stripe: Expediting sales deals while building lasting relationships with customers</h4><p><a href="https://stripe.com/" rel="noopener noreferrer" target="_blank">Stripe</a> is an online payment provider with a mission to support e-commerce. The Stripe sales team works with early-stage startups all the way through global Fortune 500 companies, and uses Slack Connect to engage with customers, keep communication organized and teams in sync, and jump on sales opportunities.</p><p>Jeanne DeWitt Grosser, head of Americas revenue and growth at Stripe, says communicating with prospective customers in Slack has been instrumental in maintaining engagement and closing deals.</p><p class="pull-quote">"Historically, the gold standard of a deep relationship in sales was getting the person on text," says DeWitt Grosser. "Now the gold standard is getting them into a Slack channel."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Usually at the beginning of a sale, DeWitt Grosser explains, reps used to double down on communication using the "law of 2x." Essentially, you start with a meeting and then follow up a week later. But this strategy no longer makes the cut: A lot could change in a week, and Slack is more in line with the tempo of the digital workplace. </p><p>"In Slack channels, the dialogue with the prospect happens in real time, as opposed to the next time you align your schedules," DeWitt Grosser says. "This kind of personal, persistent connection grows customer loyalty and retention."</p><p>Often sales reps have to communicate with a variety of departments to seal the deal. Instead of emailing them separately and creating silos, Stripe's account executives and solution architects set up a Slack channel with key customer stakeholders, like developers, the head of payments and a finance representative. </p><p>"When you need to move quickly, email is not the right format: It's more formal and responses take longer," says James Dyett, Stripe's head of global product sales and payments optimizations. "Slack has super powers. It's a much better experience." </p><h4>Xero: Working with external partners like they're on the same team</h4><p>If the pandemic has taught us one thing, it's that relationships matter. Whether it's launching a marketing campaign with a partner or hiring contractors to complete a specific project, we can't—and shouldn't—try to do everything ourselves. <br><br>When it comes to nurturing partnerships in the midst of the pandemic, <a href="https://www.xero.com/" rel="noopener noreferrer" target="_blank">Xero</a>, a cloud-based accounting software company, affirms that working in Slack Connect has been a game changer. Justine Wallendorf, New Zealand partner marketing manager at Xero, says Slack Connect helped her team launch a joint online marketing campaign with partners, <a href="https://www.figured.com/en-us/figured-xero" rel="noopener noreferrer" target="_blank">Figured</a> and <a href="http://paysauce" rel="noopener noreferrer" target="_blank">Paysauce</a>. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>The three companies were offering a complete software solution for farmers looking to manage their business digitally. By coming together in one Slack channel, #xero-partners, the sales and marketing teams across all three businesses could connect and ensure alignment on: </p><ul class="ee-ul"><li>Immediate universal access to all campaign details</li><li>Consistent messaging across sales enablement deliverables, such as one pagers and slide decks</li><li>Quick feedback and turnaround times for deliverables</li><li>Clear leadership signoffs</li></ul><p class="pull-quote">"Working in Slack Connect guaranteed that everyone was beating the same drum and speaking the same language, positioning our partnership as best as possible in the market," Wallendorf says.</p><h4>ModSquad: Winning customer loyalty with exceptional customer support</h4><p>With so much uncertainty in the world, efficient and reliable customer support is akin to a safe harbor in a storm. That's why Slack customer, <a href="https://modsquad.com/" rel="noopener noreferrer" target="_blank">ModSquad</a> has its support teams troubleshoot customer issues in real time with Slack Connect.</p><p>As a customer experience outsourcer, ModSquad knows good customer service. Each day, ModSquad's global crew of experts—the Mods—help their customers engage with their audiences online through customer support, content moderation, community management and social media. </p><p>ModSquad works with its clients in Slack Connect to set up service level agreements and incorporate support dashboards. With the <a href="https://slack.com/apps/A0108APQFQC-geckoboard" rel="noopener noreferrer" target="_blank">Geckoboard Slack integration</a>, ModSquad monitors clients' incoming calls and chats—without ever leaving Slack. Whenever the team sees an uptick in activity or service impacting issues, they can quickly alert clients and internal teams for quick resolution. The team also relies on a <a href="https://slack.com/apps/A9WFQ3M0B-zendesk" rel="noopener noreferrer" target="_blank">Zendesk Slack integration</a> to track service desk tickets, troubleshoot and resolve issues.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>According to Steve Henry, senior vice president, client services at ModSquad, Slack channels also help build a culture of transparent communication and trust with clients.</p><p>"Establishing trust with our clients is very important, and Slack provides a crucial component for all of our efforts" Henry says. "With Slack, we can provide world-class support solutions and improvements for our clients, driving efficiencies while growing their business in the process."</p><h4>In an all-remote world, Slack Connect builds strong partnerships</h4><p>Slack Connect is available for <a href="https://slack.com/pricing/paid-vs-free" rel="noopener noreferrer" target="_blank">all paid plans</a>. If you're already a customer but new to Slack Connect, feel free to <a href="http://slack.com/contact" rel="noopener noreferrer" target="_blank">reach out</a> or learn more on <a href="https://slack.com/resources/using-slack/setting-up-a-shared-channel" rel="noopener noreferrer" target="_blank">how to get started</a>. And if you want to see how others are using Slack Connect to work with external partners, check out a few of our recent <a href="https://slack.com/blog/collections/slack-connect-shared-channels-shared-success" rel="noopener noreferrer" target="_blank">customer stories</a>. </p>
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Protocol | Enterprise
Rimini Street is trying to stifle SAP and Oracle's cloud business
The animosity dates back over a decade, but the feud is reaching new heights.
Search for Rimini Street in Google, and one of the top results that pops up, just below the company's own site, is this one from Oracle.
Image: Protocol
February 23, 2021
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
February 23, 2021
For over a decade, a bitter feud has been raging in the enterprise software industry, pitting SAP and Oracle against Rimini Street, a relative unknown in comparison that's trying to undermine one of their most lucrative revenue streams. Now, that battle is nearing a pinnacle as the legacy providers try to persuade their customers to make the pivot to the cloud.
Founded in 2005 by former PeopleSoft executives, Rimini Street made a name for itself offering cheaper support for Oracle and SAP products than the vendors themselves provide. The business model hits at an under-the-radar, but critical aspect of deploying big-ticket products from any software titan: the need to continually keep the systems up to date. And the importance of that maintenance revenue stream — one of the largest for both SAP and Oracle — is evident in the intensity of the drama with Rimini Street.
<p>Oracle has long claimed that the company's core business model is effectively illegal and infringes on its software trademarks (93 of them, to be exact). So far, Oracle has been victorious in the courts with that argument. But after readjusting its strategy following an unfavorable ruling, Rimini Street filed its own lawsuits against Oracle in a bid to force the vendor to recognize the legitimacy of its operations, creating a lengthy trail of tit-for-tat litigation that is poised to continue well into 2022. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>For its part, SAP has largely avoided battling in public, but waded into the dispute in 2005 when it purchased TomorrowNow, Rimini Street CEO Seth Ravin's first company, which operated under a similar business model. After that deal, Oracle sued SAP, alleging that TomorrowNow infringed on its copyrights, and ultimately won $357 million in damages. Now, current <a href="https://www.protocol.com/enterprise/christian-klein-sap-ceo-interview" target="_blank">SAP CEO Christian Klein </a>largely downplays the intensifying competition from Rimini Street. </p><p>"That doesn't really worry me," he told Protocol. "When it comes to support … it's really highly-sticky, but also highly-healthy revenue." </p><p>But now — as both SAP and Oracle try to convince customers to take the expensive and time-intensive, but potentially lucrative, move to the cloud — Rimini Street is proving particularly irksome. The company often touts its ability to help clients maintain their existing systems and put off the costly updates SAP and Oracle are pushing for as long as 20 years. And for Ravin, the litigation and broader backlash is simply the cost of being a disruptor in the enterprise tech industry, one that, despite competition from a number of smaller vendors, is largely segmented to a few top providers. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>"We came at this with a disruptive competitive offering that we knew was a multibillion business," he said. When the support business generates "more cash than most countries have, you're going to fight pretty hard to hold on to that money. There's no surprise there." </p><h3>'It's like going to a used car dealer'
</h3><p>To avoid the same legal fate in the future, Rimini Street is taking a new approach to its business.</p><p>It's probably easiest to understand the scale of Rimini Street's market with an example. When President Obama signed his healthcare law in 2010, companies had to scramble to adjust their backend HR support systems, such as those offered by SAP and Oracle, to make sure they were compliant with the new requirements. Now, zoom out to every country that a company operates in and to all employment legislation, and you can see how difficult a task it can be just to ensure compliance with local laws on a constant basis for just one application. And that's just one kind of update: Tax laws around the world change often, meaning all back-end finance systems need to be adjusted regularly. </p><p>Prior to the advent of third-party support, SAP and Oracle handled those updates. But companies are increasingly outsourcing that to Rimini Street, along with other services. Historically, when enterprises deployed a new, on-premise ERP system (basically the IT backbone for functions like finance and supply chain operations) from SAP and Oracle, they underwent a costly and time-consuming effort to customize the platform to their own specific needs. The vendors, however, refuse to provide service for any software modified by system integrators such as Deloitte, according to Rimini Street, industry experts and tech leaders at organizations like CF Industries. That means those customers are forced to either pay significantly more for support or turn to Rimini Street, which has capitalized on that practice to bring in customers. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Oracle said it supports "customized solutions" under its standard service agreements, but not "custom code," which costs extra. And in a statement, SAP said it supports "customizations developed with our workbench," referring to the company's own tools. That does not, however, include any custom changes made by consulting firms, a common approach that many clients take. </p><p>"Staying close to SAP Standard solutions is a joint interest of our customers and SAP. We have also seen this translate into less operations cost and shorter time to innovate using the new developments delivered by SAP," the company added. </p><p>But that is all changing quickly as companies migrate to the cloud and adopt SaaS products from companies such as Salesforce and others. Maintenance, for example, is often <a href="https://www.protocol.com/enterprise/sap-rise-sales-cloud-s4hana" target="_self">included in the monthly subscription costs</a> and, to ensure customers retain their services, providers are reorganizing their teams to prop up "customer success" functions — basically employees that are dedicated to certain accounts in order to provide more robust client care. That's <a href="https://www.protocol.com/enterprise/christian-klein-sap-ceo-interview" target="_self">also the case at SAP</a> and Oracle, which are both in the process of pivoting away from the on-premise solutions that made them famous to the cloud-based offerings that customers are increasingly seeking. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>That could put a strain on Rimini Street's business, as it becomes more difficult to drive a wedge between the provider and the customer. But Ravin is prepared for that. For one, he says the on-premise software market, one that Rimini Street only holds 3% of the overall share in, will remain prevalent. The company is also using a partnership it has with Salesforce as a model for the future. While Salesforce does offer its own support, it sends part of the work to Rimini Street. In return, the company says it saves clients money that is ultimately redirected to invest in more Salesforce products. </p><p>And as chief information officers try to navigate the increasingly complicated world of IT spend, Rimini Street is pitching itself as an unbiased partner to help guide them on the journey by providing blunt advice. Executives say that consulting giants such as Accenture and Deloitte, who make major bucks by serving as the system integrators for SAP and Oracle's software, shy away from offering straightforward advice in order to retain that close relationship, creating what Rimini Street would say is a virtuous cycle of self-serving decisions. </p><p>"It's like going to a used car dealer and asking if you should drive your car for the next five years," Ravin said. The whole ecosystem is "all designed to work together." </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><h3>David versus Goliath?
</h3><p>Rimini Street's business is getting a bit more complicated with the move to the cloud. But one thing remains constant: SAP and Oracle still despise it. Search for Rimini Street in Google, and one of the top results that pops up, just below the company's own site, is one from Oracle with the headline: "Thinking of Leaving Oracle? - Don't Make a Mistake." </p><p>The backlash isn't too surprising. SAP and Oracle get as much as $42 billion combined in revenue each year from providing maintenance and support for their pricey software. And Ravin estimates the margins on that are around 94% profit. Rimini Street says it only makes a 60% profit margin on its services. </p><p>The adoption of third-party support also removes some of the leverage SAP and Oracle traditionally had over their customers. When the two companies release new products, they often phase out support for the older products, effectively forcing users to upgrade or maintain their existing systems without the regular maintenance from SAP and Oracle. </p><p>Oracle, for example, recently ended what it calls "extended support" for an update to its database products, known as 11.2.0.4. As of Jan. 1, companies still running that version will be unable to receive support on key areas, including new "tax, legal, and regulatory updates" and "update, fixes, security alerts, data fixes, and critical patch updates," <a href="http://www.oracle.com/us/support/library/lifetime-support-technology-069183.pdf?sssourcesiteid=ocomde" rel="noopener noreferrer" target="_blank">per an Oracle document</a>. That's basically everything needed to continue to sustain that release, meaning users are almost forced to pay to update to the newest version, which would be a cloud-based offering that some customers are hesitant to jump to. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>Oracle <a href="https://www.oracle.com/a/ocom/docs/ds-mds-database-11g-r2.pdf" rel="noopener noreferrer" target="_blank">does offer something known as "market driven support</a>" for recently out-of-date software like 11.2.0.4, but that only applies to the most critical issues and doesn't encompass regular updates. The company also urged users to upgrade to "benefit from the innovation, flexibility, and stability provided by" the latest release. In contrast, Rimini Street is pledging to support version 11.2.0.4 for clients for up to 15 years, though Oracle would argue doing so could put the jeopardy of the software's security at risk. </p><p>Or take SAP's efforts to <a href="https://www.protocol.com/enterprise/sap-rise-sales-cloud-s4hana" target="_self">convince customers to make the jump to S/4HANA</a>, software that some clients think is still too new to make it a worthwhile investment. Such a move, which can range in the hundreds of millions of dollars, was off-the-table once the pandemic struck, as IT spending was redirected to cloud and other applications that helped support the pivot to remote work. </p><p>That's where Rimini Street jumps in. It markets itself as a way to help enterprises delay those costly upgrades and elongate use of their existing systems, freeing them up to funnel the money to other places where they may see more of a return on investment. And companies save as much 75% on their annual service costs by making the switch to Rimini Street, according to <a href="https://www.riministreet.com/resources/analyst-research/third-party-support-removes-time-pressure-of-sap-s4hana-decision/?src=social&fbclid=IwAR1z5gQ-x4SanpdkGGJfDNGET6cSUyS5ABmbGPgG84P_uwpZUb2G5ORCmLQ" target="_blank">an analysis by Valoir</a>. </p><p>"Rather than accept SAP's pace, they are taking control of their SAP roadmap," Valoir analysts wrote in the recent research paper. "Rimini Street enabled them to lift the time pressure off their decision, take the time they need to fully evaluate SAP's offerings and roadmap, and maximize value from their existing SAP investment."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div></p><p>SAP, however, said it did "not see such patterns" in its business, adding that "the path to SAP S/4HANA that our customers consistently take is to stay on SAP support and leverage the extensive tools and services available." </p><p>Still, Valoir estimates that companies paying $1 million annually for SAP support for on-premise systems would need to spend as much as $30 million to move to and operate S/4HANA. Instead, Rimini Street often advises clients that "what you are running today is perfectly fine for another five, 10, 15, 20 years,'' Ravin said. "You don't need to spend several billions dollars and focus all your resources … on a project that will drive zero competitive advantage for you." </p><p>But the vendors don't make those decisions easy. If a company eventually wants to upgrade to the newest Oracle or SAP system, for example, the tech providers require customers to pay back maintenance costs that cover the time after they left to go to Rimini Street, industry sources told Protocol. SAP confirmed the practice; Oracle said they "could potentially need to pay back support." </p><h3>Taking the battle to the courts
</h3><p>There's a reason why Rimini Street could worry execs like Klein or Larry Ellison. In the nine months through September, the company's sales rose 16% to $239 million as profits increased 12% to $146 million. In a reflection of that success, its share price grew 93% in the past year. To be fair, Oracle and SAP's combined market caps, roughly around $344 billion, dominate Rimini Street's $647 million. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
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</div></p><p>Still, the success of Rimini Street is reflected in the intensity with which SAP and Oracle are trying to protect their own support businesses. Both companies have special teams within the organization dedicated at least partially to Rimini Street, which monitor its customer outreach and sales, according to Ravin. </p><p>SAP has "various teams that focus exclusively on driving the success of our customers," the company said. "One important part of this work is to help customers understand the value of SAP support." Oracle declined to comment. </p><p>But the feuds have burst into the public on multiple occasions, namely in the courtroom. Oracle has been tied up in litigation against Rimini Street since 2010 (there's a <a href="https://www.oracle.com/rimini-street/" rel="noopener noreferrer" target="_blank">whole website unpacking the saga</a>), when the company alleged that Rimini Street infringed on Oracle's copyrighted software. At its core, the lawsuit argued that Rimini Street's practice of updating software for one client and distributing that to other customers — basically the method that allowed the company to undercut on price — was a violation of its intellectual property. Oracle ultimately won. Overall, Rimini Street paid a total of roughly $90 million in damages. </p><p>In response to the 2014 ruling, and before <a href="https://www.oracle.com/assets/permanent-injunction-rimini-street-5216984.pdf" rel="noopener noreferrer" target="_blank">an injunction from a judge initially filed in 2018</a>, the company says it changed its business model to address the areas that were found to infringe on Oracle's copyrights, specifically that its updates are now unique to each client, not widely applied to every customer. The company says it can still offer support services for much lower than SAP and Oracle. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="9">
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</div></p><p>Oracle claims that the new practices still amount to copyright infringement. But Rimini Street is so confident that it sued Oracle in 2014 to solidify that its current business practice is lawful. Most recently, a Nevada court found that the case could proceed. It's expected to go to trial in 2022, per a Rimini Street slide shown to shareholders at a recent investor's day. </p><h3>Hiring the industry veterans
</h3><p>Despite that litigation, business at Rimini Street is booming. Which is as well, because while it's carved out a lucrative niche for itself in the software industry, in order to continue competing Rimini Street has to spend heavily and refocus its strategy. </p><p>Given it has to basically follow on to any updates or new products from SAP and Oracle, there's often a time period when Rimini Street is unable to service the offerings. Ravin downplayed the significance of this, arguing that it's only a small subset of the overall customers who upgrade immediately, and that many of those users would be loyal to the service provided by SAP and Oracle — at least initially. </p><p>It's also limited by the talent it can bring onboard. There isn't an abundance of individuals with the in-depth knowledge of SAP and Oracle systems, which run in the hundreds of millions of lines of code. And many of those that do have it probably work for the providers or one of its trusted partners. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="10">
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</div></p><p>"We hire people that would typically be consultants or developers at an Oracle or an SAP. And nobody like SAP or Oracle would put them on the help desk, they are too valuable," said Rimini Street President Sebastian Grady. "The people who answer the phones for us, they are on average 46 years old. They've been 10, 15, 20 years in this business." </p><p>Rimini Street declined to say what its average salary was for those on the help desk, but said it typically hires from software vendors and system integrators.</p><p>Ultimately, as Rimini Street grows, its battles with SAP and Oracle over talent and customers are only poised to become more heated. Still, the move to the cloud isn't prompting a transformation at just SAP and Oracle, and it's clear that Rimini Street is trying to reinvent itself alongside those vendors. If its history to date proves one thing, it's that Rimini Street is ready to play scrappy to try to win. </p>
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Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
Transforming 2021
Blockchain, QR codes and your phone: the race to build vaccine passports
Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.
One day, you might not need to carry that physical passport around, either.
Photo: CommonPass
February 23, 2021
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
February 23, 2021
There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.
Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.
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</div></p><p>But building a system that everyone agrees with — and can access — is no small task. There are several companies working on competing projects to verify vaccinations. But beyond that, there are more than a few hurdles that could prevent vaccine passports from succeeding, from antiquated medical records systems to interoperability issues and privacy concerns. Here's how they could actually succeed. </p><h3>Competing projects, similar standards</h3><p>Pretty much since the first blockchain white paper, people have been looking for perfect examples of where a distributed, immutable ledger could be valuable. There's obviously the push to use it for currencies, and companies have tried to use it for things like tracking <a href="https://www.protocol.com/ibm-blockchain-supply-produce-coffee" target="_self">food production</a> and <a href="https://www.govtech.com/products/Blockchain-Voting-Debate-Heats-Up-After-Historic-Election.html" rel="noopener noreferrer" target="_blank">voting</a>, but there are few use cases that have truly taken off, at least so far. "We've been working on this since 2014; we never thought that health care would be the kind of the use case that we take this mainstream," Jamie Smith, the senior director of business development at Evernym, a company focused on using the blockchain as a basis for verifying identities, told Protocol. </p><p>Smith said Evernym had been discussing its concepts with automakers, retailers, telcos, governments, loyalty companies and banks prior to the pandemic. One of those companies was IAG, the airline group that owns British Airways, which had been interested in the idea of contactless travel based on a single identity credential that follows you from the airport check-in to your gate. With the pandemic, that morphed into thinking about ways to verify that passengers have had negative COVID tests, and eventually, that they've received a vaccine. "From our perspective, it was a really easy lift to see," Smith said. "We're doing contactless travel, and we just added verifiable credentials for test results."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>It's a similar genesis for IBM's Digital Health Pass initiative, which leader Eric Piscini said started about two years ago as a way to store people's entire health records in a safe, accessible platform. It also relies on the blockchain for its immutable record of proof, and both Evernym and IBM are part of an open-standards group called the Good Health Pass Collaborative, which aims to bring private credentialed vaccine records to business and people around the world. Companies are working on their own implementations of the standards, but Evernym's Smith said the data is meant to be portable from one passport to another. </p><p>Most of the companies working on passports say their systems are private by design, especially given that they're mainly working off the same open standards. In most cases, the health information only ever remains on a user's phone, but where it asks to verify that the user's information meets a system's standards — such as whether this person has had two COVID vaccines and should be allowed into an office — that information is recorded on a blockchain. "You can, using blockchain technologies, verify that someone has been tested recently, without having access to the underlying data," Piscini said. "I don't know any other technology where you can do that."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Similarly, the nonprofit Commons Project's CommonPass, backed by the likes of Oracle, Microsoft and Salesforce, started out as a project to bring an analog to Apple Health for Android. JP Pollak, a senior researcher at Cornell and founder of the Commons Project, first launched CommonHealth to bring the sort of data and insights that Apple Health offers to iPhone owners to Android users. Last summer, the group started building an app that could take health data and privately share it with others — in that case, it was to help truckers stuck at the borders in <a href="https://www.newtimes.co.rw/opinions/digital-technology-re-opening-africa" rel="noopener noreferrer" target="_blank">East African countries</a> who couldn't easily prove they'd taken COVID tests. This morphed into vaccine credentialing, with the group now working to pull together the various data streams needed to get a project like this off the ground. </p><p>"Health care institutions, EMR vendors, retail pharmacies, state vaccine registries, all issuing people a digital verifiable credential of their vaccination record that they could then use in the app of their choice, to be able to get access to various kinds of services," Pollak said. CommonPass is also working with the Mayo Clinic, as well as Epic Systems and Cerner, two of the largest EMR vendors. </p><h3>Something for everyone </h3><p>With so many competing efforts to become the world's digital vaccine passport, it might seem that the country is heading for some sort of VHS versus Betamax format war for proving everyone has had COVID vaccines. But given that so many of the efforts are using the same standards, and in many cases, looking to embed their tech in someone else's app rather than their own, the race might be less about the best tech winning, and more about various approaches working in different situations. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>"The intent is not to be the only company; we don't want to be the proprietary platform that everybody has to use because they have no choice," IBM's Piscini said. "That's not who we are right now: That's the IBM from 30 years ago, not the IBM of today."</p><p>For IBM, though, the selling point is that the company already works with so many other massive companies. Why look elsewhere for a vaccine passport solution if your airline booking system is already powered by IBM? "We believe our network is going to be more valuable than any other because of our scale and our ability to integrate the platform with CRM systems, building systems or stadium systems — we can do that every day," Piscini said.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMTM1MjYyM30._ykxxCyx3_wDbZrYgCcmK0QT2Ue1tZFdP5pf60kOmPU/img.jpg?width=980" id="c81c9" class="rm-shortcode" data-rm-shortcode-id="3967636652192acfdaad341861263bc8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">IATA's digital passport app.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Photo: IATA</small></p><p>For other companies, it's about securing new partnerships with major players in the hopes of finding that scale. Evernym, for example, is working with International Air Transport Association, the airline industry's trade association, on an air travel-specific app called Travel Pass. IATA is working with airlines and local governments to ensure it has the latest requirements to feed the app's rules engine. "It will say, 'Hey, you're flying JFK to Heathrow, you need a PCR test 48 hours in advance before you can land,'" Evernym's Smith said. "And of course, those policy changes are changing every day." Qatar, Emirates and Etihad Airways are all <a href="https://simpleflying.com/qatar-iata-travel-pass-launch/" rel="noopener noreferrer" target="_blank">expected</a> to start trialing the app in the next few weeks.<br></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>In other instances, the technology will live inside other companies' existing apps; why make someone download yet another app and add another hurdle to compliance? Instead, the experience will be rather like adding a loyalty account or TSA PreCheck number when booking a flight. Airlines and other venues restricting access will require uploading negative test results or vaccine records using one of these services. "You're going to be using the United or the Delta app, and they'll be using our solution or somebody else's, but you will do it via their app," IATA's Travel Pass lead, Alan Murray Hayden, told Protocol.</p><p>The World Health Organization is also working on its own offering, and recently convened the <a href="https://www.who.int/groups/smart-vaccination-certificate-working-group" rel="noopener noreferrer" target="_blank">Smart Vaccination Certificate Working Group</a>. It's built upon the WHO's nearly century-old notion of the "yellow card" vaccination record, which first was used to document that travelers had been inoculated against diseases such as cholera and yellow fever. Evernym Chief Trust Officer Drummond Reed is part of the working group; he said there should be more to share in the coming months. </p><h3>What could go wrong?</h3><p>It's entirely possible that as more people start to get vaccinated, vaccine passports start to become the norm. You walk to work — still masked, of course — scan a QR code reader in the lobby, and are let in. You go out for lunch, and your loyalty card app has a discount for in-store shoppers verifying they're vaccinated. Your concert ticket is also tied to health pass information that you shared earlier in the day with Ticketmaster. But there are more than a few hurdles ahead of the companies rushing to turn these concepts into realities. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>First off, there's the … reality … of the real world that any digital system has to contend with. For anyone without access to the internet, digital vaccine credentials will prove difficult to acquire, though all the companies Protocol spoke with said they would offer a paper-based QR code for people who don't have smartphones. But there's also the issue of having to corral so many different stakeholders into one system, especially when some health care providers are still reliant on antiquated database systems or <a href="https://www.protocol.com/manuals/health-care-revolution/electronic-health-records-after-coronavirus" target="_self">even paper records</a>. "The amount of inefficiency in the system is tremendous," IBM's Piscini said. </p><p>But in the U.S. at least, all vaccinators are required to report COVID-19 vaccines to their state. Piscini said that even for people who just received a paper copy of their vaccine records, systems like IBM's can likely link up to the state's immunization registry and allow people to import records to a vaccine passport.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc4My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNzg3MTM2M30.RZtqR7F_FuXK1S24V6jVaqUZ0xOSG-gCwj00xU3fxcM/img.png?width=980" id="b0bd3" class="rm-shortcode" data-rm-shortcode-id="11d8002d92c0cd6ef39b12fc7b8dccf8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">How CommonPass's app shows your records. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image: CommonPass</small></p><p>And states are willing to help out, Pollak said, adding that CommonPass has started working with Hawaii to roll out its offering for would-be tourists. "We're seeing a lot of state governments stepping up and doing a really good job with this," Pollak said. "It would be surprising if there wasn't a coordinated federal effort very soon." That being said, while <a href="https://www.cbc.ca/news/canada/north/iceland-covid-passports-canada-1.5904828" rel="noopener noreferrer" target="_blank">many countries around</a> the world are committing to working on vaccine passports, getting a straight answer out of the U.S. government on what it's doing has proven difficult. The State Department, which maintains America's traditional, analogue passports, referred me to Homeland Security, which referred me to the White House. The acting director and chief of staff of the White House's Office of Science and Technology Policy, Kei Koizumi, told Protocol that "OSTP can't discuss projects we are working on before they are publicly announced."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div></p><p>But even with systems in place at a federal level, there's still a fair amount of education that needs to happen before people will trust systems like these. "There's a substantial gap in understanding and knowledge of how these systems work, and people's views, in terms of who should get access to which data," Pollak said. </p><p>"We assume there's a Facebook Borg in the sky, monitoring every interaction," Smith said. "The emergence of verifiable credentials breaks down that mental model, where actually it becomes more like decentralized bits of paper that I can carry around, and no one's to know that I've been sharing this information."</p><p>"Our belief is that if you do the right thing, from a platform point of view, protecting your privacy, and giving you control and access to the platform to everybody who wants to use it," Piscini said. "I think those are very basic things that allow the core of the platform that we build to generate adoption by the individuals."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
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</div></p><p>Even with a system that works, there may still be holdouts to this potential new normal. "Some people are saying, 'I will never get vaccinated,'" Piscini said, "and I don't know if the airlines are going to say, 'Well, maybe you will never fly again.'"</p>
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Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
Power
Cord cutting in 2020: Pay TV industry lost 5.5 million subscribers
Subscriber defections slowed toward the end of the year, but there's no end to cord cutting in sight.
The pay TV industry is undergoing a bit of a power shift.
Photo: Nicolas J Leclercq/Unsplash
February 22, 2021
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
February 22, 2021
The five biggest pay TV providers lost a combined 5.5 million subscribers in 2020, narrowly staying below the 5.8 million subscribers the companies collectively lost in 2019. Subscriber losses slowed a bit toward the end of the year, but pandemic-related cutbacks still hit the industry hard — and may have led to hundreds of thousands additional cancellations if not for industry-wide billing relief efforts.
The industry is undergoing a bit of a power shift, with pay TV subscribers switching from traditional operators like Comcast and AT&T to tech companies like Google and Hulu and their respective pay TV services. However, a closer look at pay TV trends suggests that these gains may be temporary, as so-called skinny bundles fall out of favor with consumers once operators are forced to increase their price tags to make up for ever-increasing network licensing costs.
<div class="rm-embed embed-media"><iframe aria-label="chart" frameborder="0" height="426" id="datawrapper-chart-evzmy" scrolling="no" src="https://datawrapper.dwcdn.net/evzmy/3/" style="width: 0; min-width: 100% !important; border: none;" title="Cord cutting in Q4 2020"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}}))}();
</script></div><p>The holiday quarter saw significant improvements for AT&T, which got hit hard in late 2019 by consumers ditching its AT&T TV Now online service following significant price increases. Losses notably increased at Comcast, which lost 227,000 subscribers during the holiday quarter, compared to 133,000 during the same quarter a year before.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><div class="rm-embed embed-media"><iframe aria-label="chart" frameborder="0" height="400" id="datawrapper-chart-Ldbh8" scrolling="no" src="https://datawrapper.dwcdn.net/Ldbh8/2/" style="width: 0; min-width: 100% !important; border: none;" title="Cord cutting in 2020"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}}))}();
</script></div><p>Looking at the entirety of 2020, AT&T was able to narrow its losses; the telco lost nearly 3.3 million pay TV subscribers in 2020, compared to more than 4 million in 2019. Comcast saw its losses increase from 671,000 in 2019 to nearly 1.3 million. Only Charter was able to actually grow its subscriber base, moving from a loss of nearly 500,000 subscribers in 2019 to a narrow gain of 19,000.<br></p><p>There's been some evidence for pay TV customers transitioning to nontraditional service providers including YouTube TV and Hulu's online pay TV service. Disney disclosed as part of its latest earnings results that Hulu's TV service ended 2020 with 4 million subscribers, compared to 3.2 million at the end of 2019.</p><p>However, these gains may be short-lived, if similar efforts run by major pay TV providers are any indication. AT&T effectively <a href="https://www.cnet.com/news/at-t-is-merging-its-at-t-tv-and-tv-now-streaming-services-heres-what-it-means/" target="_blank">discontinued AT&T TV Now in January</a> after losing millions of the service's subscribers when it phased out introductory pricing and raised bundle prices to make up for increased carriage fees. Dish's Sling TV service lost 118,000 subscribers in 2020 even before <a href="https://www.theverge.com/2021/1/27/22252810/sling-tv-price-increase-free-dvr-youtube-hulu" rel="noopener noreferrer" target="_blank">announcing a price increase in January</a>.</p><p>Even Hulu's pay TV service doesn't look as rock-solid once you zoom in a bit: The Disney subsidiary lost around 100,000 pay TV between the end of September and the end of December; Hulu increased the price of its live TV bundle <a href="https://variety.com/2020/digital/news/hulu-live-tv-price-increase-1234833102/" rel="noopener noreferrer" target="_blank">by $10 per month in late December</a>, making it likely that we will see further subscriber defections during the current quarter.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
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February 25, 2021 17:33 EST
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