African Rainbow Capital-backed Spinnaker Support is positioning itself to win new customers in South Africa by cutting the high costs associated with software support and maintenance. Technology has become central to how businesses around the world operate. From enterprise resource planning, cloud, customer relationship management and others, the various software services used in an organisation typically carry the cost of acquisition, with more spent on maintaining those systems over time. Founded in 2002, Spinnaker is one of a number of third-party enterprise software support, managed services and consulting companies that serve as an alternative to costly original manufacturer maintenance contracts by providing support for major software systems.The US-based company specialises in software from global giants SAP, Oracle and VMWare. For instance, if a large organisation uses a certain SAP system, maintaining that software would typically be done by the German IT group itself or one of its affiliates, often referred to as “channel partners”. Spinnaker can take on such work, promising to do so at about half the cost. Having tested its fit in the local market, Spinnaker founder and CEO Matt Stava told Business Day the company is now investing in a full South Africa presence. “We’ve been here for two years, with Telkom and a couple of others,” he said. “And now we’re stepping it up, putting money into the economy and hiring people right here. We’ve got about 15 employees already and are scaling that up as we speak.”Patrice Motsepe’s ARC is a minority investor in Spinnaker’s South Africa business. “I look at South Africa as being our entry point into both the country and sub-Saharan markets. There’s Namibia and Botswana. We’re talking to companies there already. So I look at South Africa as being the support centre for all of Africa,” Stava said. Telkom group chief digital officer, Sello Mmakau, said the state-affiliated telecoms provider had already saved R800m over five years using Spinnaker. “We are now in the second year of using Spinnaker for third-party support, particularly on Oracle,” he said during a launch event for the company in Johannesburg. Mmakau and his team were sold on “cost optimisation, quality of services and the advisory that we get from Spinnaker”.“There are a lot of services. The advisory services have helped us to actually shape how we provide quality service to our customers. We saved half of what we were paying to traditional original equipment manufacturers (OEMs), with improved service quality. We’re able to identify a lot of risks that we couldn’t at that particular point in time.”Mmakau said the balance between reducing costs and quality of service has kept the relationship healthy.A few years ago, the department of water and sanitation bought SAP software for about R500m, with maintenance costing about R100m a year. If the department chose to engage a third-party support provider, “they probably would have saved about R50m a year,” said Spinnaker’s MD for South Africa, Teko Mojaki. “That’s how significant the cost savings are. And this is what we’re talking about when we say people can actually save 50%-65% from maintenance support.“These companies are paying huge sums of money on an annual basis.”