Big Show, Big Questions, Big Stakes

Big Show, Big Questions, Big Stakes

SAP's 2009 Sapphire show in Orlando has officially kicked off, but the stakes this year couldn't be higher for the enterprise software vendor.

SAP's 2009 Sapphire show in Orlando has officially kicked off. Typically, this multiday schmoozefest lets SAP trot out its executives to meet with customers, partners and tech journalists and talk up its line of ERP, CRM, BI and supply chain products.

The affair is usually chock-full of SAP customers (mostly CIOs) who give SAP-centric speeches or sit on panel discussions on timely enterprise software topics. A feel-good big-name concert caps off the event. (This year's act is Don Henley, a risky choice, given that bloggers may be tempted to write "locked in" headlines about how customers can check into SAP but they can never leave.)

Entertainment aside, the stakes this year couldn't be higher for software vendors such as SAP -- and especially for newly christened CEO Leo Apotheker, who has formally succeeded his co-CEO Henning Kagermann. In fact, the theme of the event --"See Your Way Clear: Strategies for Success in the New Reality" -- is just as appropriate for SAP's customers as it is for the German software giant itself.

First off, there's the matter of the global financial recession that is hitting SAP's core customers' IT budgets and capital-investment plans: SAP recently announced a 16 percent drop in first-quarter 2009 net income and a revenue dip of 3 percent (compared to the year previous). And things are likely to get worse before they get better, analysts say.

Next up is how SAP is dealing with its strategy to increase its maintenance and support fees. Approximately a year ago, SAP had let its customers know of an upcoming maintenance-fee increase that would commence in 2009. SAP recently announced that it was modifying the pricing program for SAP Enterprise Support, in effect delaying the much-talked-about maintenance price increases.

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