Blog: Why SAP's ERP Maintenance Prices Should Be Going Down -- Not Up

Blog: Why SAP's ERP Maintenance Prices Should Be Going Down -- Not Up

Nobody likes to pay more for something that they've been already getting, for roughly the same price, for a decade.

So when SAP announced this past July that all of its customers (new and old) would be moving from tiered pricing for SAP's maintenance and support plans to a single and more expensive price come January 1, 2009, there was some uproar in the "ecosystem," as SAP likes to call its software universe.

Most of that initial outrage over the maintenance fee increase—which goes up from 17 percent (formerly known as Basic Support) to 22 percent, for the new and enhanced Enterprise Support—has been subsiding in the few months since the announcement. But it shouldn't.

Two well-known industry experts, Forrester Research's Ray Wang and former Gartner analyst Vinnie Mirchandani, are doing their part to fan the flames of SAP customer feelings of injustice. (Mirchandani is known as Vinnie "Maintenance," and his distaste for high price and low value in enterprise software maintenance costs is legendary.)

First, Wang: In early October, Wang delivered a Forrester report on how companies are coping with SAP's pricey maintenance hike and offered customers suggestions on how to deal with the unwanted costs. One of the important points Wang raises has to do with the lack of value that SAP customers felt they were receiving: "While the new [Enterprise Support] model does offer some new benefits like upgrade support and end-to-end operations support," he writes, "many of the customers with whom Forrester has spoken already question the value of their existing Basic Support contracts at 17 percent."

In fact, of the 203 customers Forrester interviewed, a whopping 85 percent expressed minimal utilization of the existing Basic Support offerings.

In addition, SAP customers told Forrester that they just weren't seeing the innovation in product offerings from SAP that should have resulted from the collective billions they've been paying in maintenance dollars over the years. "There are a plethora of examples where key functionality requested two to four years ago by multiple customers in the same or different industries were not delivered," Wang notes.

Mirchandani is also stirring up customer dissatisfaction. He points out in a recent blog post on SAP's "empty calories" that SAP has yet to deliver important details with metrics on the new value SAP customers will receive from Enterprise Support. He also echoes Wang in that SAP "keeps dancing around" the key question of whether 17 percent maintenance was delivering enough value to customers in the first place.

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