Enterprise software maker SAP has bowed to customer pressure and scrapped a controversial plan to move all customers to enterprise support contracts priced at 22% a year by 2015.
In an about turn, SAP has announced that it will return to a two-tiered system that reintroduces a standard support option priced at 18% a year, 1% higher than 2008 rates.
SAP has also frozen prices for existing enterprise support contracts at the 2009 level of 18.36%, but will gradually increase that rate from 2011 to 22% by 2016.
The decision comes after SAP postponed an announcement expected in December on 2010 support price increases and instead appointed a task force to gather more feedback from customers.
Two levels of support
"SAP's new support model is a direct response to the many discussions we have had with our customer and user groups," said Léo Apotheker, chief executive officer at SAP.
SAP's decision is a victory for customers and user groups who were unhappy about the plan announced in July 2008 to increase maintenance and support fees from 17% to 22% over five years.
"This move shows that SAP is listening to user groups, and therefore its customers, taking on board our feedback and making changes to meet the needs of all SAP users," said Alan Bowling, chairman SAP UK & Ireland User Group.
"We asked for choice between standard support and enterprise support, and today SAP has given us just that," he said.
Choosing the right option
Ray Wang, partner, enterprise strategy, at consultancy Altimeter Group, said there are several things businesses should consider in choosing the right option.
Broadly speaking, businesses planning to add more modules should consider enterprise support, but others should opt for standard support and consider third party maintenance in 12 to 18 months, he wrote in a blog post.
According to SAP, standard support is reactive and includes enhancement packages, new releases and fixing problems, whereas enterprise support is proactive and includes best practices for IT operations and monitoring and reporting.
Apotheker said he expects enterprise support to be the more popular choice and has exceeded the key performance indicators agreed with the SAP User Group Executive Network (SUGEN).
SUGEN, which represents 12 user groups around the world, has been negotiating with SAP over the issue of support since November 2008.