SAP Watch

Jan 22 2010   12:40PM GMT

The lingering effects of SAP’s bungled Enterprise Support rollout

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

In reinstating a tiered maintenance and support model, SAP gave customers exactly what they wanted – a choice.

But in getting this choice, customers also learned another thing – they have a strong voice.

The Enterprise Support affair opened the door to something rarely covered in the enterprise software world – negotiating lower maintenance contracts. As one CIO put it to me, maintenance and support was never even questioned in his budget. But the news drummed up by the Enterprise Support affair brought it to the attention of the CFO, and gave him the idea that it’s an area for cost savings.

And it won’t take long for more value questions to come up. For starters, there’s the lingering question of whether, with the adjustments for inflation, Enterprise Support will wind up costing the same as Standard Support in the long run.

As Joshua Greenbaum put it to me in an interview when SAP first introduced the KPI program, “This issue of, ‘Why am I paying this enormous fee?’ isn’t going to die.”

Perhaps more than open-source, or SaaS, SAP’s bungled rollout of Enterprise Support has forced customers to look at what their maintenance and support dollars are actually buying them.

“The genie is out of the bottle: SAP’s decision to backpedal may very well mark of point of inflection for the software industry as a whole,” Strategy Partners’ Helmuth Gumbel wrote on his blog. “Negotiating maintenance down is ‘in,’ – it may very well become a key topic at golf courses.”

Customers have already figured out ways they can get concessions. For instance, Forrester’s Duncan Jones said that customers expressed the distaste for the new maintenance and support policies by not spending with SAP on discretionary projects.

“I think they were listening to their sales channels, and the people who processed purchase orders from customers who had nothing to do all year,” Jones said. “I think it was the impact on license revenue as much as the vocal complaints.”

And they’re not only looking for concessions on maintenance and support from SAP anymore.

Gumbel writes that, “the topic has already spread to parts of SAP’s ecosystem: some software vendors that supply add-ons to SAP reportedly have been pressed by customers to reduce their maintenance bills and are quietly cursing SAP for putting this topic on the agenda.”

And won’t SAP customers inspire those of other vendors, like, say, Oracle?

My colleague Barb Darrow reported that there were rumblings amongst Oracle’s customer base to the such back in March – saying customers were demanding to pay for only the coverage that they needed, or even threatening to switch applications altogether. She wrote: “One Java-centric VAR, who spoke on the condition of anonymity, said some of his BEA WebLogic customers are moving to alternative application servers just to get away from Oracle.”

“I have two BEA/Oracle customers right now that are committed to converting from WebLogic,” the VAR told Darrow.

Hindsight is 20/20. Maybe if SAP hadn’t introduced Enterprise Support at such a difficult economic time, and maybe if the value message around the rollout had been clearer, things would have turned out differently.

Or maybe, as Gumbel put it, “it would have been better if Leo Apotheker wouldn’t have touched the subject in the first place.”

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