Analysis: New SAP customers face maintenance hike

For new customers, SAP announced its intent to raise its standard support maintenance fee from 18% to 19% effective July 15, 2013. The standard support option was reintroduced in January 14, 2010, after much pressure from user groups. A few key takeaways:

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The Bottom Line: SAP wants to eliminate Standard Support and competitors to Solution Manager

The 5.5% increase in maintenance pricing will continue a string of increases that will make standard support less compelling than enterprise support over time. SAP’s harmonisation of the standard support rate for new customers with the existing customer rate is part of a longer term process to eliminate the standard support cost savings that customers could take advantage. What was once seen as an advantage of selecting SAP for a dual maintenance option, will no longer serve as a market differentiator.

More importantly, the continued anti-competitive assault by the Solution Manager product team on SAP Optimisation providers and partners such as Hayes Technology, Intellicorp, Panaya, Revelation Software, and WestTrax does not bode well for customers. SAP’s made it very difficult for cost effective and pro-customer vendors to exhibit and build functionality that’s competitive to Solution Manager. The strong arm tactics could mean customers pay more for an inferior product.

On the bright side, third party maintenance options from Rimini Street and Spinnaker will provide some leverage for customers during their maintenance contract negotiations. In fact, business at Rimini Street is growing and will probably gain more traction as a result of this announcement.

Your POV

What do you think about SAP’s maintenance hike? Is it fair? Is it in line? Need help with your contract negotiations? Tap into the experience of thousands of contract negotiations. Have a story to share about SAP contracts? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

Posted by R "Ray" Wang

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