SAP AG today said it will transition all of its enterprise software customers to its recently introduced Enterprise Support maintenance offering, a move that will raise annual support prices for most of SAP's 47,000 customers.
Beginning Jan. 1, 2009, and planned as a phased-in transition, SAP will shift existing customers to Enterprise Support, which carries an annual charge of 22% of net license fees. As part of the change, SAP said, it is immediately discontinuing its Basic Support offering, priced at 17% of net license fees. SAP is also discontinuing Premium Support, which was priced at 22% of net license fees, and will fold these support customers into the Enterprise Support offering.
The change brings SAP's maintenance charge structure in line with that of its major enterprise software competitor, Oracle, which has charged 22% for maintenance for some time.
The move to transition all customers to the Enterprise Support offering follows creation of the higher-cost maintenance program earlier this year. At that time, Enterprise Support, at 22%, was designated for new SAP customers, with existing customers retaining the option to stick with lower-cost Basic Support or Premium Support. At the time, however, many experts said it was only a matter of time before SAP acted to move all customers to Enterprise Support at 22%.
"If this was intended to be a surprise, it was the world's worst-kept secret," said Jim Shepherd, research vice president at AMR Research, in an interview today. "Anybody who gave it much thought recognized that SAP wouldn't wind up with two tiers of maintenance pricing."
Despite the widely expected move, many SAP customers have reacted "viscerally" to the price increase, Shepherd said. Most, however, will quickly come to accept the price jump, he predicted, since competitors like Oracle are already at 22%.
Helping customers to stomach the maintenance price increase is the fact that SAP will roll the program out gradually. Although customers will be covered under several aspects of Enterprise Support immediately, the 22% maintenance price level will be achieved over a four-year period. Customers moving from Basic Support to Enterprise Support will pay 18.4% effective January 2009, 19.8% in 2010, 21.4% in 2011, and 22% beginning in 2012, said Mark Cordrey, vice president of SAP Active Global Support, in an interview with Managing Automation.
Also helping the price rise go down easier is SAP's move to bundle more services into Enterprise Support, particularly compared with the current Basic Support offering. Enterprise Support includes a new version of the company's Solution Manager and a new operational methodology, RUN SAP, which, among other things, allows customers and SAP to track down and fix problems that crop up when third-party products are integrated with SAP applications, Cordrey said. The new Enterprise Support offering also includes tools and services that support root cause analysis of those problems.
Enterprise Support also includes service-level agreements (SLAs) for problem resolution and a 24-hour-per-day, seven-day-per-week support adviser service. The Basic Support program did not include SLAs, 24-hour-per-day response, or adviser service.
New and enhanced Enterprise Support features also will roll out gradually. While the enhanced service manager, deployment methodologies, and SLAs will be available to all customers immediately, SAP will ramp up other features, such as online advisers and performance reports, between now and the end of the year, Cordrey said.