SAP Packs More Value into Enterprise Support

 

By Sam Sliman
President, Optimal Solutions Integration, Inc.

 

What most SAP customers know about SAP’s new Enterprise Support maintenance program is limited to a few basic facts; namely, that it comes with a 22%-of-license-cost price tag; that it is mandatory for all new SAP customers (SAP 6.0); and that, eventually, Enterprise Support will be the only maintenance program SAP offers to its customers.

 

While all true, these facts do little to help SAP customers understand how Enterprise Support protects their SAP investment, helps them to realize greater value from their SAP landscape, and ensures they achieve faster ROI and lower TCO from their SAP solutions.

 

When it first announced Enterprise Support in February 2008, SAP made it clear that while all existing SAP maintenance customers will begin transitioning to Enterprise Support effective January 1, 2009, the transitioning will occur by way of a graduated pricing scheme that incrementally moves customers from their current agreements to the Enterprise Support 22% pricing. These customers will pay 18.3% starting in January, with gradual annual increases until they pay the full 22% per year in 2012. SAP expects that all maintenance will be fully transitioned to Enterprise Support by 2012.

 

Concurrent with the launch of Enterprise Support, SAP also added one year to extended maintenance (5-1-2 schedule) for SAP R/3 4.6c and 4.7 customers, providing these customers more time to map out an incremental upgrade strategy to SAP 6.0 that meshes with their immediate business needs and future growth goals.

 

More recently, according to a survey conducted by the SAP User Group Executive Network (SUGEN), a global federation of twelve SAP user groups, 90% of respondents reported not yet understanding "the full extent of the SAP Enterprise Support offering, its value and cost justification."

 

On first glance, this number may seem high, but keep in mind that it was only in June of this year – less than six months ago – when SAP began rollout of Enterprise Support in earnest. SAP reported the 90% survey finding in a recent press release, and the company is working diligently to close the gap between what Enterprise Support delivers and what customers currently know about the program.

 

In response to customer pushback and the lack of understanding surrounding Enterprise Support, SAP has forged a tight partnership with SUGEN. Together, SAP and SUGEN have established Value Key Performance Indicators for SAP Enterprise Support to ensure that the value delivered by Enterprise Support aligns with the needs and expectations of SAP customers.

 

Moving forward, a SUGEN-led SAP Enterprise Support Task Force will aggregate and communicate to SAP collective member feedback on the value delivery of SAP Enterprise Support.

 

Another major outcome of the SAP/SUGEN collaboration is an extension to SAP’s Enterprise Support Maintenance program.

 

Historically, SAP’s maintenance program adhered to a 5-1-2 formula, meaning customers paid an established base rate for five years, a 2% increase for one additional year, and another 2% increase for two years after that.

 

SAP Enterprise Support now follows a 7-2 formula, meaning customers pay a fixed 22%-of-license cost for seven years, and can purchase two additional years of maintenance for an additional 2% or 24%-of-license cost.

 

This 9-year maintenance offering, the longest in the industry, gives SAP customers even more time to evaluate, deploy and reap the benefits of SAP enhancement packages. In essence, 7-2 provides even greater visibility and stability to allow SAP customers to innovate at their own pace without business disruption and without fear of obsolescence.

 

Enterprise Support is a gradual and necessary shift in SAP’s strategy that reflects the overall maturation of the SAP suite and the enterprise software market in general. As is the case with any new product, it takes time to educate the market on the full range of benefits conferred. SAP’s Enterprise Support is no exception. The challenge becomes even more formidable when one considers the vast size of SAP’s global customer base. By extending maintenance to nine years, SAP is giving its customers more time to fully understand and appreciate the strong value of Enterprise Support while buying itself a bit more time to fully educate its customers.