SAP Users: Support Debate Isn't Over
SAP users say the debate over the vendor's recent decision to force all customers onto enterprise support is far from over and they want SAP to back up its claims about the service's added benefits with hard data.
Meanwhile, there is no indication the vendor will change course.
"We continue to be very pleased with the reaction from customers we see in the market," said SAP spokesman Bill Wohl. "While customers are saying they never like to pay more money, they see the additional value."
On July 16, SAP announced that the enterprise support offering will replace the standard and premium support options. Current customers that are transitioned to it will start receiving some enterprise support features now, but won't see any price increases until Jan. 1, SAP said. The increases will be phased in gradually until 2012, eventually reaching the enterprise support level of 22 percent of maintenance base, compared to 17 percent for standard support.
Wohl repeated SAP's past contention that its move was tied to the fact that customer environments have become increasingly complex -- and not to a desire to drive revenue -- and that the service's additional benefits could actually lead to efficiencies and cost savings.
SAP customers and user group leaders aren't yet convinced this is the case.
"Supposedly, we're going to get more value. I haven't seen it because I haven't been shown it," said Michael Davidson, CIO of Apotex, a large Canadian pharmaceutical company.
Apotex won't immediately feel the effect of higher costs because it has some time remaining on an existing deal, he said, but added, "we need to look at a longer term of what that level of maintenance is, and ask quite honestly, 'Are we getting business value?'"
Meanwhile, the German-speaking SAP User Group (DSAG) said in a statement on Aug. 7 that it "cannot support the compulsory replacement of Standard Support with Enterprise Support at this point in time."
"Our impression is and the feedback we got from our members is that the opposition is very significant," group board member Andreas Oczko said in an interview Wednesday. "The feedback, especially from the small-to-medium businesses, is that they have very simple landscapes and are familiar with their systems. They don't see at the moment why they should need enterprise support."
The vendor has agreed to provide evidence for its argument that the enterprise support offering will provide added value and lower costs, especially to medium-size customers.
The group, which includes 2,100 companies in Germany, Austria and Switzerland and has 25,000 registered members, plans to present its initial findings at its convention in September.
The SAP UK & Ireland User Group, which also lodged a strong initial protest, "is continually engaging with SAP regarding the support issue," a spokesman said by e-mail.
The Americas SAP Users Group (ASUG) said in a statement that it will have time to evaluate the enterprise support offering through customer case studies "of what works and what needs correction -- thus, leverage our considerable member base to influence SAP to either change the costs or change the offerings, as appropriate."
In an interview, however, ASUG CEO Steve Strout said the group's advocacy would adopt a strictly diplomatic tone, and noted that the group did manage to convince SAP to phase in the cost increase over time.
"We want to continue to help influence this, but it is not our position to demand a set dollar amount [from SAP]," he said. "We can't go in there and say we're going to demand that prices are only going to be at 17 percent because then we're acting as a collective bargaining organization and we don't have the legal right to do that."
There are multiple ways customers can band together and fight back, said Forrester Research analyst Ray Wang.
For example, customers should perform an audit to figure out how often they've contacted SAP support and what patches and updates have been applied, he said via e-mail. "Share that data among members to establish a baseline and increase transparency of ownership costs as legally permitted. Segment by industry, size, region, version number. You can then figure out the money spent to date and the value realized to date."
Customers should also avoid signing a new SAP maintenance agreement that lasts more than one year, giving themselves an option to consider third-party maintenance options, he said.
Enterprise software support company Rimini Street plans to start such a service in 2009.
As for SAP, one long-time SAP integrator expressed skepticism that it can deliver a higher level of support to its customer base.
"I have one question -- where's all the talent going to come from? And if you could find the talent, would they want to be sitting on the support desk?" asked Mike Kerrigan, vice president of business applications at Laurus Technologies in Itasca, Illinois.
SAP's support service isn't optimal right now when it comes to general questions, Kerrigan said in an interview: "Nobody jumps up and down and says, 'I called SAP and got a great answer.'"
However, he acknowledged that the company is quite responsive when it comes to serious issues, such as a full system crash. "When you get onto SAP support desk and tell them that, I've always thought they really rallied."
Echoing concerns expressed by user groups, Kerrigan said that innovative companies that move quickly to upgrade to the latest technologies "are obviously going to need" a higher level of support. "But the people in maintenance mode, what are they going to use, what are they going to need?"
Rimini Street CEO Seth Ravin is hoping this anger ends up filling his company's coffers. Calls have been coming in from some of SAP's largest customers, he said. "I can tell you we are talking absolutely with the top 10 and 20 in SAP's maintenance base in terms of dollars."
Rimini Street charges customers half of whatever they were paying in maintenance costs, Ravin said.
But it's an open question as to how quickly the company can cater to the market's demands. "The question we haven't yet answered is, will we be in a position to take care of everybody or take a small group of customers [initially] and then go gangbusters [in January 2010]," Ravin said.
While acknowledging there is a general shortage of qualified SAP talent, Rimini Street will be able to get enough support staff aboard because of its own business model, he said. The company currently supports Siebel, PeopleSoft and JD Edwards software.
"We don't put people on the road. We allow them to live anywhere in the country or outside of it if appropriate," he said. "We've really been able to get people with 10 to 15 years of experience or more. I think we're going to find the same thing in the SAP environment."
But SAP's Wohl downplayed the prospect of third-party maintenance making a serious impact. "Customers have shown a preference for wanting support to come from the manufacturer," he said.
And SAP will have no staffing problems, he said. "We start from the premise that we already have the world's largest support infrastructure," Wohl said. "We have a lot of confidence. If I was a third-party support company starting from scratch, I'd be looking at an uphill battle."