Tuesday, December 09, 2008

Crack in the dike for SAP maintenance fee hike

It appears that SAP's forced march to higher maintenance fees is not going so well on its home turf.

The Financial Times first reported this morning, in German, that SAP has agreed to let its customers in Germany and Austria to stay on on their current maintenance contracts through 2009. Previously, SAP had unilaterally forced all such customers to upgrade to its more costly enterprise support. I was first alerted to the FT article in a tweet by James Governor (aka Monkchips).

SAP's backpeddling only gives relief to its customers in Germany and Austria, but it is hard to imagine that clients in other geographies won't demand the same treatment. They should.

Dennis Howlett is following the story and is posting additional news and commentary as he finds it. He writes:
This is a major victory for SAP customers who, despite SAP management’s protestations to the contrary have continued to lobby for reconsideration of SAP’s maintenance package pricing. According to the FT, some 50-60% of SAP customers in Germany and Austria were deeply unhappy with the measures, citing economic pressures contributing to difficulty in justifying what was already a tough budgetary sell. Computerwoche confirms that SAP had only managed to persuade 25% of its customers to changeover from standard to enterprise support.
Update, Dec. 10. Vinnie Mirchandani questions whether a maintenance fee rollback to 17% of license cost is enough for SAP, as even that level of cost is too high for the value delivered.

Update, Dec. 10. Dennis Howlett follows up his original post with a phone call from Bill Wohl, an executive at SAP. Wohl says that there are specific legal issues in Germany and Austria that required SAP to tear up existing contracts and issue them afresh so that it could impose the price increase.

Howlett points out that this has created an incredibly complex situation for multinational customers that have different contracts in different countries. He also thinks that SAP is not really hearing its customers on how much resentment the price increase has generated.

Read the whole post for the full picture.

Related posts
SAP maintenance fees: where is the value?

SAP under the spotlight for "broken promises"
Mad as hell: backlash brewing against SAP maintenance fee hike

2 comments:

jaremy said...

well, SAP is number one ERP implementing company. so it is enjoying monopoly. we have to follow them.

Anonymous said...

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