Dec 1, 2009 DUESSELDORF (Dow Jones)--German business software maker SAP AG (SAP) Tuesday said it had postponed a decision to charge customers higher maintenance fees for its enterprise support until next year.
This announcement, coupled with the fact that over the past six months, SAP has wisely backed off its announcement of a maintenance fee hike from 17% to 22%, is heartening and in stark contrast to a Bill McDermott’s quote that characterized the initial announcement.
"The real criticism you can make is, 'Gee, Bill, why did it take you guys so long to increase the cost of customer support, because you were five points below the industry benchmark of 22% all that time, and giving up shareholder value?' " McDermott says. "That's a fair criticism I'll accept with open arms."
Contrast this to Tuesday’s SAP declaration: "With this (delay), SAP once again demonstrates that it takes the concerns of its customers seriously and also recognizes the ongoing pressures bearing down on IT budgets in the current economic environment," the company said.
Last March, my somewhat delayed response to the rate hike was a blog post SAP: Stop Chopping Off the Tallest Heads to Make Everyone Equal http://snipurl.com/tjgu2 in which I called for tiered pricing based upon relative support burdens.
In a recent, detailed article http://snipurl.com/tjgsi, Bob Evans of Information Week pores over the statements, retractions, suggestions, and organizational pause going on in the upper echelons of SAP. The article is titled Will SAP Move to Tiered Maintenance Fees? But unfortunately there is little discussion of this. All the same, this article as well as recent others by Mr. Evans on the subject are well worth reading.
In parallel, we are told that SUGEN had completed its KPI labors and that Gartner will soon commence an audit (though what form this audit will take is not clear to me).
While I still am not hearing anything suggesting tiered pricing for SAP maintenance, the delay in raising maintenance costs is a heartening signal that SAP is listening to its installed base and may find a rational way out of what appeared to be cause for massive client revolt.