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May 4 2009   3:22PM GMT

Will SAP maintenance move move Oracle?

badarrow Barbara Darrow Profile: badarrow

SAP, the ERP leader, recently decided to defer maintenance fee increases until it proves to customers that the fees are worth the money. The first question that comes to mind is if Oracle will follow suit.

My guess: No. At least not publicly.

Oracle has long irked customers with 22% annual fees for support and maintenance. Partners hated them too because they didn’t get a piece of the action. And yet…..the feeds continue. What Oracle doesn’t want people to know is how much wheeling and dealing goes on. That means its biggest customers, the ones most likely to be running SAP or Microsoft or other rival applications and infrastructure, have already cut their own deals that amount to significantly lower fees.

All of this is, as those in publishing are known to say, is “off the rate card.” C-level and upper management IT execs at large accounts claim (not for attribution, of course) that they are getting significantly better deals from Oracle and from other vendors. But the negotiations can be bloody.
Two IT sources said they are working, vendor by vendor, deal by deal, to get maintenance fees down below 20% per annum. And both said they have cut deals with Oracle –at least on parts of their business–that are in that range.

Given the pallid economic situation, expect more companies to get aggressive on this front and play vendors against each other to get better deals. Some partners say they have been asked by customers to help them negotiate better terms in return for a piece of the savings.

This could get really interesting.

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