SAP to slash software costs ?

Warwick Ashford writes:

US media reports have jumped to the conclusion that SAP will be cutting software prices soon in an effort to attract and retain customers. They have made this leap based on comments by SAP’s co-chief executive Leo Apotheker that SAP will work with customers to help them through the economic downturn.

This is in the DNA of SAP, which has put a lot of time and effort into developing closer relations with partners and customers, so I would say it is unlikely to result in software price cuts. Not on the official price tag, anyway, as most price cutting tends to be hidden in the details around software support, or so I am told.

SAP’s announcement that it is to increase support costs from January provoked a negative response, but insiders say this pricing is one of the biggest bargaining chips used by software suppliers to win and retain customers. SAP has responded by demonstrating that it understands the importance of keeping end users on its side by agreeing to set up some KPIs around its software support.

 Although the first planned support increase will go ahead in January, all further increases will depend on meeting the KPIs agreed with SAP user groups. Tougher economic times may be retraining technology budgets, but suppliers have been affected too and they are likely to be a lot more end user friendly in the coming year, so it is not all bad news.