SAP cuts low-price support, but promises 24/7 maintenance

Customers in danger of being "over-milked," analyst firm says

SAP has eliminated one of its lower-priced support offerings, but at the same time expanded ERP maintenance levels to include 24/7 support and support for third-party systems that connect to SAP software.

Previously, SAP offered a basic support package costing 17 per cent of a customer's license fees and a premium support package that went for 22 per cent. SAP has essentially eliminated both offerings for new customers and replaced them with an Enterprise Support package that costs 22 per cent but comes with a greater level of service.

SAP was criticized by the consulting firm Ovum, which said SAP is trying to "shore up its revenue growth" while customers are in danger of being "over-milked."

SAP vice president of strategy Bill Wohl scoffed at the revenue growth comment, saying SAP has achieved 17 consecutive quarters of revenue growth. While SAP can take in more revenue by charging higher rates, it's also likely SAP will be spending more of that money on customers as it ramps up its level of support.

With its new Enterprise Support, rolled out to customers in February and announced publicly in May, SAP now helps customers identify and fix problems in products which are made by other vendors but work with SAP applications.

"In the past, we didn't take responsibility for anything beyond SAP software," Wohl says. "[Now] we're going to take responsibility across your enterprise for the stuff connected to SAP."

That means SAP will help fix problems related to Adobe software, the Oracle database, or other products connecting to SAP's ERP software. SAP can't solve every problem related to a competitor's product, obviously, but Wohl says SAP will help customers through the whole process even if it involves going to other vendors for support

"What we discovered about the services-oriented environment is the support requirements for customers have changed," Wohl says. "No longer do customers need simple bug fixes. ... They want problem resolution all across the network."

The other major change: 24/7 support. Previously, customers received one named contact during normal business hours only, Ovum notes in its advisory about SAP support changes.

Even premium support customers had to pay extra for 24/7 support, Wohl says. Now 24/7 support will be available to all customers, because the Enterprise Support package is now the minimum offering. Additional support offerings are available to customers willing to pay more than 22 per cent, including MaxAttention, a package that places SAP specialists on the customer's site full-time.

Existing customers with the basic support package that costs only 17 per cent of license fees are being allowed to stay on that same plan, but new customers will not be offered the 17 per cent rate, Wohl says.

Moving to a 22 per cent minimum fee brings SAP in line with the prices of rival Oracle, according to Ovum analyst Madan Sheina. "Since 17 per cent was seen as a bargain for many companies, we feel this move is akin to SAP giving up a competitive differentiator," Sheina writes.

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