SAP Details Tiered Pricing Model for Customer Support
SAP is now offering a
tiered pricing model for customer support, an apparent stand-down from
the business-software maker's earlier plan to raise its entire user base's
maintenance fees. In addition, the company will keep its 2010 fees for existing
SAP Enterprise Support contracts unchanged from 2009 benchmarks.
"We will now provide a tiered support portfolio," Leo
Apotheker, CEO of SAP, said during a Jan. 14 conference call with reporters and
analysts, adding that the new offering was "a predictable price
Customers will now be able to choose between SAP Standard
Support, whose features include updates, problem resolution, knowledge transfer,
and quality management; and SAP Enterprise Support, which includes all the
elements of SAP Standard Support plus additional focus on business continuity
and business process improvement.
In theory, the choice between the two support options will
simplify customers' pricing structures and offer a level of predictability to
On Dec. 1, SAP
announced that it would delay a decision on increasing customers' maintenance
fees until the beginning of 2010, and that it would convene a task force to
solicit feedback from customers and user groups. In theory, that feedback would
be leveraged into improvements in SAP's support offerings.
"Until then, a decision on pricing for Enterprise Support has
therefore been postponed," SAP said in a statement at the time.
In July 2008, SAP had rolled out a plan to shift all its
customers onto SAP Enterprise Support as of Jan. 1, 2009. As part of that
transfer, customers would have seen their maintenance fees increase to 22
percent of their base licensing fee by 2015.
However, as Apotheker acknowledged during the Jan. 14
conference call, many of SAP's customers have been facing "strong pricing
pressures" amidst a deep global recession and its aftermath. Recognizing the
increasingly cost-conscious nature of many companies, particularly as it shifted
its focus towards the SMB (small- to medium-sized business) market, SAP had been
offering its flagship Business Suite 7 as deployable in modules without
customers needing to upgrade to the whole platform.
SAP itself also suffered somewhat from the recent economic
unpleasantness, with its revenues falling by 9 percent during the most recent
quarter due to a generalized decrease in spending on business software. During
an Oct. 28 quarterly earnings call, SAP executives predicted a 6 percent to 8
percent dip in software and service revenue overall for 2009.
SAP executives have appeared publicly unconcerned about challenges from rivals such as Oracle, which is on the verge of absorbing Sun Microsystems in a $7.4 billion deal. SAP engaged in partnerships itself throughout 2009, including joining forces with Microsoft to offer the SAP BusinessObjects Planning and Consolidation application through the latter's channel, and with IBM and other companies for the SAP Business Suite 7 rollout.