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Under pressure from user groups around the world, SAP has decided to postpone any decisions to increase support costs until early 2010.
Under a program that the German software giant had unveiled in July 2008, SAP had planned to gradually increase maintenance costs over the next three years under a maintenance service plan called SAP Enterprise Support. At the time, SAP officials said they intended to phase in rising maintenance fees for customers from 17% of the software license price to 22% by 2012. Earlier this year, SAP said it would hold off on escalating to the 22% level until 2015.
In a turnaround on Dec. 1, SAP announced that it’s tabling those plans, at least for the moment, as it has been negotiating with user groups from around the world, including SUGEN, the SAP User Group Executive Network which unites 12 user group communities across six continents. SAP has been working with SUGEN and its confederation of user groups since April to create key performance indicators (KPIs) to measure the value of enterprise support. Participating SUGEN user groups include Americas’ SAP Users’ Group (ASUG) and the SAP UK & Ireland User Group which issued a statement regarding SAP’s decision to work with user groups on maintenance pricing.
“We welcome this statement from SAP – both in recognition of the hard work recognizing value that has taken place on the benchmarking exercise, but also the consideration SAP is giving to its customers in these tough economic times,” said Alan Bowling, chairman of the SAP UK & Ireland User Group. “We’ve always said the benchmarking programme linking price to value, although ground breaking, was going to be a difficult process, especially in the time frames involved this year,” Bowling added.
In the statement it published on Dec. 1, SAP said it has created a task force “to reach out to customers and user groups” and work their feedback into enterprise support pricing sometime in early 2010.
We’ll have to wait and see what kinds of concessions SAP ends up making with respect to future maintenance fees and how the KPIs are incorporated into this. But it is heartening to see a big enterprise software vendor like SAP to at least show some willingness to work with customers and user groups on pricing at a time when IT budgets are getting slammed and any software price increases would surely cut into what little discretionary IT spending is available for IT shops and the business units they support.
One more thought on this: SAP has a tremendous opportunity here to come up with some really innovative pricing models at a time when Software-as-a-Service, cloud computing and Open Source systems are opening up new options for enterprise customers. Whether SAP seizes the moment is up to them.
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