The word "upgrade" has long been a virtual bogeyman for SAP customers, given the historical pain, time, and cost of moving to a new version of the vendor's ERP (enterprise resource planning) software.
For some time, SAP has been trying to entice users onto the modern ECC 6.0 through its "enhancement pack" program, which promises to let users add new features without the pain of a full technical upgrade. Customers can't take advantage of the packs until they move to 6.0.
Meanwhile, a good percentage of SAP customers need to confront upgrade decisions this year, as they remain on platforms such as R/3 4.6c, for which extended maintenance ends this December, and 4.7, for which mainstream maintenance lapsed in March 2009.
For legacy customers who don't yet wish to upgrade, this means an increase in cost for vendor support, a jump to a third-party maintenance provider -- which has its own uncertainties, given ongoing high-profile lawsuits -- or a decision to go with no paid support at all.
The pack strategy is therefore crucial for SAP, which needs to preserve lucrative maintenance revenue while making life easier on customers and stemming defections to other options, particularly SaaS (software as a service) applications, where upgrades are handled by the vendor.
Some customers who are using the enhancement packs say the system works pretty much as promised, and their ranks are growing rapidly.
About half of the 13,000 SAP customers on ECC 6.0 have downloaded the enhancement packs, according to a spokesman. This represents a doubling in just several months, as the figure stood at more than 3,000 in late 2009, now co-CEO Jim Hagemann Snabe said in an interview at the time. SAP could not provide the number of customers remaining on R/3 by press time for this article.
SAP's strategy with the packs "makes a lot of sense," said Tim Ferguson, CIO at Northern Kentucky University. "Relatively speaking, compared to previous ways that SAP did this, they're very easy to install."
NKU has served as a beta tester for the packs, which helped the school influence SAP to add key features it desired, he said.
While NKU's core SAP functions for billing, payroll and other areas are fairly stable, the systems that touch students each day must evolve regularly, Ferguson said. One of the packs provided a new Web service that allows students to register for classes through their iPhones, for example, he said.
"The students that are coming out, this generation, they expect different types of services. We have to change to meet those needs," he said.
SAP's pack strategy is apparently pleasing some customers. But it still involves some work for customers.
"I've mostly heard good things," said Jon Reed, an independent analyst who closely tracks SAP. "[But] they're not quite as painless as SAP's marketing sometimes presented it."
System testing remains a crucial factor, Reed said. "Things break during an on-premise [implementation] and there's a preferred method of handling that, including sandboxing and testing, so when you pull that lever there are no problems. Customers still need to anticipate how it might break their system."