Menu
​INSIGHT: Top 3 ways to squeeze your SAP maintenance costs

​INSIGHT: Top 3 ways to squeeze your SAP maintenance costs

I recently had a call from an unhappy SAP customer moaning about the high costs of SAP’s annual maintenance.

I recently had a call from an unhappy SAP customer moaning about the high costs of SAP’s annual maintenance and questioning whether they are getting good value for the money.

I’m afraid that this is not a one-off conversation but something that is popping up regularly these days.

The factors leading to the dissatisfaction include:

•CIOs are keen to shift spend from boring legacy IT like paying maintenance on infrastructure to new, more exciting stuff - what Forrester calls business technology - that help win, serve and retain customers.

•Hard economic times re-focus procurement’s lens back on to those large chunks of money that vendors want for maintenance.

•SAP has been increasing maintenance costs to try to get everyone paying 22 percent of the net license costs each year.

Whatever the cause, the facts remain that SAP’s maintenance costs (like many software vendors) are a big expense item on many CIOs budgets.

So what can you do about it?

I regularly advise our clients on how to negotiate with SAP and I see a lot of tactics applied to squeeze SAP’s maintenance costs.

Here are three that often form the basis of any negotiation plan:

Firstly…

Before you even start negotiating with SAP, use some of the more recent software asset management tools that understand all SAP’s licensing nuances (including the now feared ‘indirect access’ issue) to help clean up your SAP estate.

This will give you a clear picture of what you have and what you need. It will also highlight discrepancies between what you have licensed and what you actually want.

For example, do you have shelfware that can be cancelled off your next SAP maintenance agreement (or traded in for other SAP services you may need at no net new cost)?

Or are you paying for premium license editions when in fact lower cost versions are more than adequate? In other words, do you have too many Professional user licenses when Limited Professional licenses are more than enough to cover your user’s needs?

Secondly…

If you are planning to buy more new software from SAP (e.g, S/4 HANA) then make sure you combine your new stuff conversation with your annual maintenance conversation.

SAP will try to keep these conversations separate, but you should keep them linked - we must address the total package here.

One example I saw recently was where SAP was offering to trade unused license maintenance costs for new cloud licenses as a way to sweeten the deal and to reduce the net new spend.

And if you are looking to jump to SAP’s cloud, then what about getting a trade-in credit in on any on-premise SAP software you are about to replace with versions in their cloud?

And thirdly…

Have you gotten a quote from one of the third party SAP maintenance companies such as Rimini Street or Spinnaker Support?

Whether you choose to go with these companies and save yourselves 50 percent of the money you currently pay to SAP, or whether you use them as negotiation leverage to force SAP to lower their maintenance costs is up to you.

Third parties are now making serious in-roads into SAPs client base and do pose a real threat to their high margin maintenance cash cow. And as with any negotiation, it’s good to have a choice as it makes both parties bidding for your business work harder.

Of course, these are not the only negotiation levers you can play with when faced with another SAP maintenance renewal. But if you were wondering where to start then they make a good foundation to your negotiation strategy.

By Mark Bartrick - Research Analyst, Forrester Research

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags SAPForrester Research

Slideshows

Top 50 defining moments of the New Zealand channel in 2016

Top 50 defining moments of the New Zealand channel in 2016

Reseller News looks back on a tumultuous 12 months for the New Zealand channel, assessing the fallout from a year of sizeable industry change. Whether it be local or global mergers and acquisitions, distribution deals or job changes, the channel that started the year differs somewhat to the one set to finish it - Reseller News assesses the key moments that made 2016.​

Top 50 defining moments of the New Zealand channel in 2016
​Hewlett Packard Enterprise honours high achieving NZ channel

​Hewlett Packard Enterprise honours high achieving NZ channel

Hewlett Packard Enterprise honoured its top performing Kiwi partners at the second running of its HPE Partner Awards in New Zealand, held at a glitzy ceremony in Auckland. Recognising excellence across eight categories - from distributors to resellers - the tech giant celebrated its first year as a standalone company, following its official split from HP in 2015.

​Hewlett Packard Enterprise honours high achieving NZ channel
Nutanix treats channel partners to Christmas cruise

Nutanix treats channel partners to Christmas cruise

Nutanix recently took to the seas for a Christmas Cruise around Sydney Harbour with its Australia and New Zealand staff, customers and partners to celebrate a stellar year for the vendor. With the sun out, they were all smiles and mingled over drinks and food.

Nutanix treats channel partners to Christmas cruise
Show Comments