SAP’s announcement last spring that it was effectively raising the basic cost of support to 22% of license cost and placing everyone under a single enterprise support regime came, not surprisingly, with some grumbling and raised eyebrows from customers.
Part of the problem was simple public relations. Absent from SAP’s initial announcements was any well-orchestrated attempt to define the value of SAP Enterprise Support services to customers. Instead of offering comprehensive reasons why customers may actually benefit from the new level of support, SAP didn’t trumpet its value, making it seem like an avaricious play for more revenue from customers with little or nothing to be delivered in return.
That’s too bad for SAP, and too bad for its customers. In reality, there is something to be said about the value of SAP Enterprise Support and what SAP is doing to make its support and maintenance regimes highly competitive. There’s also much that customers can do to ensure that their support and maintenance dollars are well spent.
The Expanding SAP Footprint
Let’s start with an important point from my colleague Bruce Richardson from AMR Research: Bruce points out that SAP’s footprint at virtually every one of its customers has grown significantly over the years. In your company, it’s very likely that SAP is more deeply enmeshed across your business practices than any of SAP’s major competitors (who are, more likely than not, also represented in your IT portfolio).
For the typical SAP customer, this makes SAP software not only more strategic to your company than it was five or ten years ago, but it also makes it more strategic across your systems compared to other vendors’ solutions. This explains why a price increase — the first in 10 years — is at least partly justified: Your support needs, and the missioncritical nature of this support, have grown, lending some legitimacy to SAP’s claim that support is of greater value than before.
Factoring Upgrades into the Equation
This notion is further justified when looking at SAP’s approach to upgrades. When any vendor upgrades its products, it is innovating on behalf of its customers by providing not just new technology, but new functionality. This functionality is passed on — for free — to customers paying for maintenance and support.
Because SAP’s strategy for software innovation relies heavily on improving its core software products, new functionality is made available for free under maintenance and support. Of course, there are obvious exceptions — among them new offerings in governance, risk, and compliance and the Business Objects product set. But dollar for dollar, SAP provides more innovation within its core solutions — and therefore, for free at upgrade — than most of its competitors. This is one area where the relative value of SAP’s software strategy over its competitors translates into greater value.
What’s more, SAP is heavily focused on lowering the cost of the upgrade itself. Remember, paying for maintenance and support means that you get the upgraded software for free, but you bear the cost of implementing the upgrade.
And that’s where SAP’s new enhancement packages come in. These packages significantly lower the complexity of an upgrade, changing a major functional upgrade, which typically consumes large amounts of IT resources, into something more akin to a technical upgrade, which usually requires far fewer IT resources. This presents real value for SAP customers, and when other vendors are charging the same 22% rate for support and maintenance, it’s a significantly greater relative value as well.
What Can You Do?
Whether or not I’ve convinced you that SAP’s maintenance and support fees have some justification, SAP Enterprise Support is indeed making its way to your company. There are ways you can find savings and efficiencies in your SAP implementation as you make this shift:
- Move to SAP Solution Manager. First off, you should implement and start running SAP Solution Manager. This is a big product that supports myriad functions in the lifecycle management of your SAP systems. For example, it provides a mechanism for notifying SAP support of a problem with your software. These alerts not only describe the problem, but also automatically send a significant quantity of supporting data that SAP can use to debug and resolve the problem. This speeds up problem resolution and is a significant component of the return on your maintenance and support investment.
- Invest in support across the lifecycle. Don’t overlook investments in your own overall lifecycle maintenance capabilities. Make sure your modifications are well-documented and your users are well-trained. This is an often-neglected part of the process that, in its absence, engenders a significant amount of support activity — and its benefits accrue for the lifetime of your implementation.
- Review your contracts. You must take a careful look at all of your existing contracts — particularly if you are also a Business Objects customer — to ensure you’re paying the right maintenance and support fee based on your contract and actual usage. In all too many cases, a comprehensive review shows product and license overlap that results in maintenance and support overages.
Even better, consider finding a specialist to do the contract review for you. Too many customers are simply out-gunned in the contracting process and end up not getting the best possible terms and conditions from their vendors.
This is not just an SAP problem, but it definitely has become more acute as companies increase their support. Indeed, it’s highly likely that a comprehensive contract review will uncover enough savings to compensate for the increase in maintenance and support costs.
You Can’t Live Without It
In the end, SAP Enterprise Support provides significant value to SAP customers at a price that, for better or worse, is on par with what SAP’s competitors are charging. And at that price, SAP Enterprise Support looks like a better value, despite SAP’s best efforts at hiding that fact.
Regardless, support is the one thing you just can’t live without, which means that you need to learn to live with it — and maybe, just maybe, learn to like it as well.
|Joshua Greenbaum has over 25 years of experience as a computer programmer, systems and industry analyst, author, and consultant. He spent three years in Europe as an industry analyst and a correspondent for Information Week and other industry publications. Josh regularly consults with leading public and private enterprise software, database, and infrastructure companies, and advises end users on infrastructure and application selection, development, and implementation issues. You can reach him at email@example.com.