SAP, Siemens ink new support pact

The global corporation signs a new three-year maintenance deal, dispelling rumors it may drop vendor support

SAP said Wednesday that Siemens has signed a three-year renewal of its software maintenance agreement, an announcement that would seem to quell widespread speculation that the global engineering and electronics company was considering dumping vendor-provided support in favor of lower-cost alternatives.

In addition, Siemens has expanded its use of SAP software, according to the announcement. It will use SAP's SRM (supplier relationship management) application in support of procurement efforts around the world.

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Siemens' new maintenance agreement includes SAP's high-end MaxAttention service. SAP is also going to provide support for some internally developed applications that are integrated with SAP, the announcement said.

An SAP spokesman said last month that the rumors about Siemens dropping support created "an inaccurate portrayal about the SAP-Siemens relationship" and that the vendor was "currently working with Siemens to deepen the relationship in a multitude of areas."

On Wednesday, an SAP spokesman wouldn't discuss whether the company provided Siemens any sort of discount or other special accommodation in order to sign the new agreement, but said, "this was at usual costs for large SAP customers."

If an SAP customer as big as Siemens had chosen to drop vendor maintenance, the high-profile example could have provided a boost to the third-party maintenance market. But some observers treated the rumors with skepticism.

Right now, there are few third-party SAP support companies, and the best-known one, Rimini Street, probably couldn't handle the job, analyst Josh Greenbaum said in a blog post last month.

"I don't see how they can gear up to provide comprehensive maintenance and support ... for what is either the world's largest or the world's second largest SAP installation (Nestle is the other contender)," he wrote. "It would take something more than a Rimini to handle a customer of this size, despite their track record in third party maintenance."

In addition, large systems integrators such as IBM would likely be unwilling to take on the project, for fear of alienating SAP, Greenbaum said.

The specter of third-party maintenance has loomed large around SAP since its controversial decision last year to move customers to a fuller-featured but pricier Enterprise Support service.

After a protracted public debate, SAP and the SUGEN (SAP User Group Executive Network) agreed to work out a set of KPIs (key performance indicators) meant to show the value provided by Enterprise Support. SAP has agreed to hold off on an incremental price increase schedule for Enterprise Support "until the targeted improvements measured by the SUGEN KPI Index are met."

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