» VIEW ALL POSTS Dec 12 2008   4:17PM GMT

SAP and its customer relationships



Posted by: CourtneyBjorlin
Tags:
SAP

People don’t generally trust corporate blogs, according to a Forrester Research study on the topic.

There are, however some exceptions -- among them are Dell, Rubbermaid, Microsoft and, SAP, the report said. Blog Council, a watchdog group that reported on the study said it’s “because they put their customer first and exist to help solve their problems.”

These sentiments lend some insight into the SAP Enterprise Support controversy, and the brouhaha that’s been stirred back up this week with SAP’s decision to allow German and Austrian customers another year of support. They’ll be able to pay for support according to the terms of their existing contracts until 2010, while everyone else moves to the enhanced, but pricier, Enterprise Support offering in January 2009.

Patching up bad feelings and restoring trust, not cutting price, most analysts agree, seems to have been central to that decision. In fact, many German and Austrian customers will wind up maybe paying more than if they had just opted to upgrade and/or move to SAP Enterprise Support. Under the terms of their existing contracts, support for R/3 releases costs more than 17% of net licensing fees.

While customers certainly don’t like paying more, trust, not price, seems to have been one of the central issues in this entire controversy. Forrester’s Ray Wang has been stressing the importance of restoring the vendor-customer relationship through this whole affair. Similarly, analyst Josh Greenbaum pointed this dilemma out months ago in his fictitious speech by SAP co-CEO Leo Apotheker, in which the soon-to-be sole CEO pledges to do a better job of explaining why they increased support prices. In his latest blog, Greenbaum points to ways vendors in general can build better trust, including giving customers 6% back on their maintenance fees, providing they re-invest it in new software from the vendor.

SAP has repeated time and time again during this Enterprise Support rollout that they’re just charging what everyone else in the market charges for support, and at the same time, unlike other vendors, they’re actually giving customers more services instead of just raising their bills. They’re right.

But SAP’s customers seem to hold their vendor to a higher standard. Maybe, taking steps to build that trust will finally help quiet down the controversy.

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  • CourtneyBjorlin
    I just came across your blog and in Germany the story is told a little bit differently: Legal aspects did not play a major role in the discussion. The main point was, that the contracts had been canceled unilaterally by SAP by sending a letter, as it is reported by the German press. Most of the customer had taken big investments in their SAP landscape running basically the whole company under SAP. So, the risk not to sign the new maintenance contract was very high. These customers, with a turnover between 1 and 10 billion Euro, reported on a press conference held in Düsseldorf on Dec. 10th, that they felt SAP is using this dependence. A further topic in the discussions was the reported decreasing quality of the support. And another was the required investment for the new tools that are necessary to make use of the Enterprise Support. So, in Germany the topic will very likely stay on the agenda.
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