SAP Watch

Mar 3 2010   9:23PM GMT

Will 2010 be the year of the SAP upgrade?

Mperkins Matt Perkins Profile: Mperkins

Not long ago, former SAP CEO Leo Apotheker made the prediction that all of the company’s customers would have upgraded to SAP ECC 6.0 by 2010.

With 2010 now upon us, the estimate might seem unlikely. About half of SAP’s ERP users have upgraded, analysts say.

But several factors seem to support Apotheker’s theory, or at least the notion that there might be an influx of upgrades this year.

A study conducted by the SAP U.K. & Ireland User Group last fall helped back Apotheker’s prediction, as more than half of organizations it surveyed were planning to upgrade their SAP software within 12 months. (Granted, most of those willing to move forward with the upgrade were reluctant to do so, with nearly 70% of those surveyed saying they felt the cost of upgrading was too high. And, only 35% of those surveyed at that time were actually using SAP ECC 6.0.)

Meanwhile, most SAP customers last year were finding that SAP ERP 6.0 upgrades were significantly easier than in the past. The reason was that customers still on SAP R/3 4.6 and 4.7 only needed to take the functionality they were interested in. In the past, they would have to apply and test everything before sorting out what they wanted and what they didn’t.

While the recession may not be over, many perceive that the worst of it is behind us. As a result, more companies may be looking to SAP upgrades this year as the dust begins to settle.

“2010 is anticipated as the year of the upgrade (you heard it here first – maybe not) as many SAP customers saw an upgrade as an easily avoidable expense in the midst of the economic carnage of the last 12-18 months,” writes Tim Cooper of the blog Data XStream. “Also, SAP is on a push to get customers off earlier releases and up to ECC 6.0 and various EHP (enhancement packs) to make upgrades a thing of the past.”

Likewise, IT spending may focus on upgrades this year, according to an article in InformationWeek:

“More than half of IT software budgets this year will be dedicated to upgrading and improving existing applications, rather than implementing new software, a survey of IT executives shows. The focus on upgrading software is the result of a backlog that occurred during the poor economic conditions last year . . . As a result, companies plan to play catch up this year. “

While it’s likely that not all of SAP’s customers will have upgraded to the latest release this year, many factors seem to suggest that 2010 may see a large resurgence of upgrades after remaining dormant during the economic downturn.

It will be interesting to see how SAP’s new co-CEOs approach upgrades as they look to clarify the company’s strategy and product roadmap. Will 2010, in fact, be the year of the upgrade? Or did Apotheker’s prediction follow him out the door when he resigned from SAP?

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