SAP Forcing Support Upgrades on Customers

This version of the story originally appeared in Computerworld's print edition. SAP AG last week announced plans to "transition" all customers to its new enterprise-level support program as of Jan. 1, 2009. The change will provide some customers with increased levels of service but also make them pay higher fees.

The vendor said that its Enterprise Support offering, unveiled in February and rolled out in May, will replace its Standard and Premium support options.

Some of the new features will be available to the transitioned customers immediately, but those users won't be charged the higher maintenance prices until Jan. 1, SAP added.

The prices will increase gradually from that point until 2012, when they reach the Enterprise Support list price of 22% of annual license fees. For example, a customer now paying 17% for standard support will see it rise to 18.3% in 2009 and then increase incrementally until 2012, the vendor said.

Forrester Research Inc. analyst Ray Wang said in a report issued last week that the move was likely a response to competitive pressures from rivals like Oracle Corp. and a result of SAP's decision in April to cut its investment in the Business ByDemand suite of hosted ERP products. He noted that the latter action has "led to a major loss in potential revenue growth."

Wang recommended that SAP customers begin evaluating third-party maintenance providers and start prodding SAP user groups to protest the increases.

Mike O'Dell, chairman of the Americas' SAP Users' Group, said that ASUG members convinced SAP to boost prices gradually. SAP initially planned to move customers to the 22% rate immediately, said O'Dell, who is CIO at Pacific Coast Companies Inc., a building materials maker in Rancho Cordova, Calif.

"We weren't successful in blocking it. We would have liked to," he said. "We were able to get some concessions.

"I'm not going to tell you it's a good deal. From my company's perspective, we don't like to pay more for anything," O'Dell added. Pacific Coast uses the Standard support program.

The new service includes "a 24/7 service-level agreement, continuous quality checks, a support advisory and advanced support for implementing SAP ERP enhancement packages and support packages," SAP said.

Kanaracus writes for the IDG News Service.

Got something to add? Let us know in the article comments.

Copyright © 2008 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon