SAP Announces Delay in Maintenance Fee Increase

SAP will delay increasing its customers' maintenance fees until early 2010 and assemble a task force to hear feedback from customers and user groups, in what could be seen as an acknowledgment of the pressures on businesses' IT budgets in a moribund global economy. In July 2008, SAP had announced that customers would be transferred to SAP Enterprise Support, which featured steadily rising maintenance fees through 2015.

SAP announced on Dec. 1 that it will delay a decision on increasing customers' maintenance fees until the beginning of 2010, in recognition of "ongoing pressures" on IT budgets in the aftermath of a global recession.

Furthermore, SAP said, it will convene a task force to solicit feedback from customers and user groups and then use that information to leverage improvements in SAP's support offerings. The results of the task force will be provided in the beginning of 2010.

"Until then, a decision on pricing for Enterprise Support has therefore been postponed," SAP said in a statement.

In July 2008, SAP announced a plan wherein all SAP customers would be transferred to SAP Enterprise Support as of Jan. 1, 2009. Under that plan, customers would have seen their maintenance fees increase to 22 percent of their base licensing fee by 2015. That plan now seems temporarily derailed until next year.

The announcement also comes as SAP shifts its focus to SMBs (small to midsize businesses) as a potential market for its software. Seeking to appeal to cost-conscious companies, SAP has been offering its Business Suite 7 as deployable in modules without customers needing to upgrade to the whole platform. But issues such as maintenance fees remain of keen concern to both SMBs and the enterprise, which have found their IT budgets squeezed by the recession.

SAP saw its revenues fall by 9 percent during the most recent quarter, due to an ecosystemwide decrease in spending on business software. During the company's Oct. 28 quarterly earnings call, SAP executives predicted a 6 percent to 8 percent dip in software and service revenue overall for 2009. Net income rose 12 percent overall, however, and SAP executives have appeared publicly unconcerned about a competitive challenge from rival Oracle, which is on the verge of absorbing Sun Microsystems in a $7.4 billion deal.

SAP has also been exploring ways to leverage its relationships in order to expand its customer base, including partnering with Microsoft to offer the SAP BusinessObjects Planning and Consolidation application through the latter's channel. In February 2009, it also partnered with IBM and other companies for the SAP Business Suite 7 rollout.