Forrester: Discontent persists over SAP price hike
- 11 October, 2008 22:00
A new Forrester Research study that polled more than 200 SAP customers found widespread discontent over the vendor's recent decision to shift customers to a pricier Enterprise Support offering, and also provides tips on how customers can mitigate the increased cost.
SAP announced in July that Enterprise Support would replace its basic and premium support options. Enterprise Support costs 22 percent of a customer's license fees, compared to 17 percent for basic support. The additional costs will be phased in over the next few years, and new charges won't begin until Jan. 1.
But Forrester clients voiced a number of common gripes.
Eighty-five percent of the clients interviewed described minimal utilization of the Basic Support offering. "The average customer claims to connect with SAP fewer than six times a year -- the equivalent of buying a comprehensive but expensive insurance policy and rarely utilizing it," the report states.
Customers also complained to Forrester about the time it takes SAP to meet requests for new features.
"Customers believe that the maintenance dollars paid to SAP should go to filling in key functionality gaps in the software. However, 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 in SAP R/3 4.7, let alone available in SAP ERP 6.0," the report states.
Clients "want to know how much of their support dollars really go back into reinvestment versus profit margins," it adds.
SAP has cited a number of reasons for its decision, such as greater complexity in customer environments, and argues that Enterprise Support provides a higher level of benefits for customers -- points the Forrester report does not dispute.
"We believe this much-enhanced offering meets the needs of our customers and offers increased value, such as end-to-end support across the enterprise 24 hours a day, seven days a week, as well as a one-hour initial reaction time for the highest-priority support issues," SAP spokesman Saswato Das said Friday. "We are seeing good adoption rates and will continue to roll out Enterprise Support, of course working with user groups and our customers, and listening to their issues and concerns."
To mitigate the increased cost of maintenance, customers should seek steeper discounts on licensing deals, according to Forrester.
Another tactic would be to create a long-term "SAP containment strategy," which could include taking a look at other vendors. "Many SAP clients with whom we spoke have begun the process of evaluating Oracle Siebel, Salesforce.com and others for customer relationship management as well as Siperian, Initiate Systems and IBM for master data management."
Customers also should consider third-party options for support. While one company, Rimini Street, has announced plans to provide such support, it has not yet begun doing so, and even when it does will focus on only SAP's R/3 products.
The Forrester report's results stand in contrast to SAP's past contention that while customers may not like to pay more money, they understand the value of the new service.