U.K. SAP Users Angry Over SAP Support Price Increases

There’s trouble brewing in the SAP ecosystem: The U.K. & Ireland SAP User Group issued a statement regarding SAP‘s recent announcement that it was increasing its fees on its software support program for existing customers, from 17 percent of contract value to 22 percent.

By Jan. 1, 2009, all users are to be transitioned out of SAP’s Standard and Premium Support options; every SAP customer will have to pay for and receive the new support options of Enterprise Support. (In February, the software giant raised maintenance fees for all of its new customers.)

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The gist of the July 25th message from SAP users in Great Britain can be best summed up like this: We’re bloody mad about it!

The chairman of the UK & Ireland User Group, Alan Bowling, is the source of the statement, and while he’s somewhat diplomatic, it’s not too difficult to read between the lines. “The mandatory nature of this change along with the increase in cost has received hugely negative feedback from our membership to date,” Bowling says in the statement. “In real terms this is a 29.4 percent increase in costs over the next four years for existing SAP customers, and is proving to be a particularly difficult area to accept.”

These prices increases are a major part of SAP’s business strategy. The company has been pushing Enterprise Support since it quietly announced in early 2008 that as of Feb. 1 all new SAP customers would have to purchase Enterprise Support at the 22 percent rate. According to SAP, the new plan offers 24/7 service-level agreement for support, continuous quality checks, support advisory and advanced support for implementing SAP ERP enhancement packages and support packages.

The German software giant has billed Enterprise Support as the “next generation of support offerings.” Many of SAP’s users, however, think the program is superfluous, according to Bowling. He states that “…many of our members may not want or need this extra level of support and therefore are reacting negatively to having a new support product and the associated increase in costs forced upon them.” Bowling went on to assert that as part of the new business model there was a “category of large enterprise” that exists that will not be taking a price increase, “although this exception only seems to apply to the very largest of SAP’s customers.”

Bowling also stated that, along with the German-speaking user group (DSAG), “we are skeptical that the Enterprise Support offering is sized appropriately and we remain concerned on its suitability for many small and medium-sized enterprises.”

In the July 16th announcement from SAP, Mike O’Dell, chairperson of the Americas’ SAP Users’ Group (ASUG), was quoted as saying that “SAP consulted with multiple ASUG members for guidance in creating a transitional plan to SAP Enterprise Support that took into consideration organizations of all sizes and implementation stages—hence the graduated timeline.” O’Dell is the CIO of Pacific Coast Companies. He added: “At ASUG, we do whatever it takes for our members to succeed.” (For more on what ASUG thinks of the support increases, see “As SAP Support Costs Spike, Users’ Group Leader Preaches Collaboration — Not Rebellion.”)

Ray Wang, a vice president at Forrester Research, says that user groups play an important role in helping vendors and users understand the key requirements. “Recent announcements by DSAG and the U.K. & Ireland Group show why it’s important for members to play an active role in discussions such as maintenance, upgrades, and future functionality,” he says.

Bowling, in the announcement, delivered a treatise to SAP. “I’d also encourage SAP to reconsider this mandatory price rise,” he said, “so that organizations not requiring the extra level of support provided in Enterprise Support do not have to pay for features they do not require.”