User groups force SAP into support pricing concessions

User groups force SAP into support pricing concessions

SAP has responded to mounting pressure from its users by revising its controversial Enterprise Support offering and deepened its partnership with the global user group organisation Sugen.

The moves come in response to a backlash over price rises for support that were announced in June.

With immediate effect SAP is extending its maintenance for its core ERP systems to offer nine years of support, with an additional option for two years of extended maintenance.

The new support regime starts with SAP ERP 6.0 and any new core applications from the SAP Business Suite introduced by SAP in future. "This 7-2 offering, the longest in the industry, provides customers more time to deploy and realize return on investment via SAP enhancement packages," the software giant said.

"These enhancements to SAP Enterprise Support bring to the front some hidden gems," said Bruce Richardson, chief research officer at analyst AMR Research. Richardson suggested that SAP had "under-hyped" the benefits of its support offering.

"Outlining specifics for value engineering, enhancement packages and solution manager will demonstrate clear opportunities for customers to derive value from their IT investment," he said.

Pressure from SAP user groups, coordinated through the global Sugen (SAP User Group Executive Network) organisation, has played a key role in the SAP decision.

Sugen and SAP are now set to work together on a joint task force on support.

Matthias Herzog, Sugen Vice-Chair and executive sponsor for the task force said that "we need a joint effort to overcome the differences between SAP and its customer base to ensure value is delivered for the increased maintenance fees."

SAP has always justified its price rises by saying it was bundling substantial extra services into the package, and a Sugen survey feedback showed that 90% of respondents did not understand these additional services or their cost justification.

Now a joint SAP and Sugen team will establish key performance indicators for SAP Enterprise Support. The two groups will regularly evaluate the KPIs against customer expectations, with SAP promising to "adjust the continued rollout of SAP Enterprise Support until the quality measures are achieved."

Alan Bowling, chairman of the SAP UK and Ireland User Group, which holds it annual conference next week, welcomed the move. "It is a good step on the path to reducing TCO," he said.

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