SAP lengthens support agreement to soften software price hike impact

SAP users will not accept the next round of price rises for support unless the company has clearly delivered improved total cost of ownership for the businesses that run its enterprise software.

That was the message of Alan Bowling, chairman of the SAP UK and Ireland User Group, at the user group conference Monday.

Bowling was speaking during a panel discussion that also involved Steve Rogers, SAP UK managing director, Caroline Horn, the UK chief operating officer, Greg Pike, head of SAP’s US support arm and Forrester analyst Ray Wang.

The user group conference came just days after SAP made significant concessions on price rises for its Enterprise Support package. The plan to introduce a phased increase in support from 17 per cent to 22 per cent of licence costs has not been revoked.

However, SAP has added two more years to standard support and agreed to meet with the global federation of user groups to establish performance indicators (KPIs) for

SAP enterprise support before the second phase of the price increases is invoked.

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The SAP User Group Executive Network (SUGEN), which includes the SAP UK & Ireland User Group, will jointly evaluate the progress of these KPIs and the roll-out of the SAP enterprise support will be dependent on the achievement of these metrics.

This is, according to Forrester’s Wang, a major shift by SAP. Wang went on to urge user group members to examine in detail the benefits they are getting from the support that they pay for and then challenge SAP on pricing and flexibility.

The support issue was a central focus of the panel discussion at the event, but a show of hands from the audience revealed that SAP customers had yet to be convinced that the company’s moves would deliver them real business value. SAP executives on the panel insisted that the pricing changes announced last week were a sign of the company’s commitment to listen to and partner more effectively with end users.

Support has dominated the headlines around SAP since the price rises were announced in July, but the company has been trying hard to improve broader customer relations since Steve Rogers said at last year’s user conference that the company had been “complacent” about its customer base in the UK.

Commenting 12 months, on Bowling said, “Steve has been true to his words and has made new appointments within his organisation to focus on the quality of how well his team are working with their customers.”

He highlighted the introduction of Customer Success councils where SAP UK openly revealed their performance based on Customer Satisfaction surveys.

(Mike Simons chaired the panel discussion at the SAP user conference)

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