Moving to a 22 percent minimum fee brings SAP in line with the prices of rival Oracle, according to Ovum analyst Madan Sheina. "Since 17 percent was seen as a bargain for many companies, we feel this move is akin to SAP giving up a competitive differentiator," Sheina writes.
Ovum advises customers to take a long hard look at their support contracts. "There's no better time for SAP customers with expiring Basic support contracts to consider the extent to which they need and use such deep support," Ovum writes. "Admittedly companies that have spent millions on ERP software that is mission-critical to their core business will be ready to pay maintenance and support to make sure it keeps ticking. But at the same time vendors are desperate to keep them on board. So perhaps it's time to haul in your ERP supplier of choice for some serious contract negotiations."
SAP customers using the R/3 software will have another option in 2009, at which time Rimini Street plans to offer R/3 support at 50 percent savings over SAP prices. R/3 is a previous generation of SAP's software, which has since been replaced by ERP 6.0 and the Business Suite
Ovum further states that SAP should take a lesson from software-as-a-service vendors such as Salesforce.com and NetSuite, which build support fees into the monthly charges customers pay for access to the Web-based software.
Wohl says this is a false comparison, given that SAP software is more complicated and extends into more of a customer's systems than does a typical Web-based product. The support requirements are "a world apart," he says.
Wohl also says he's not worried about Rimini Street posing any threat, given that R/3 customers are rapidly upgrading to ERP 6.0. Worldwide, about 9,000 companies have installed or are installing 6.0, he says.
IDC took a less critical view of SAP Enterprise Support than did Ovum.
"Enterprise customers are demanding a more robust support solution from their support providers -- and SAP is answering that call with SAP Enterprise Support," IDC writes in a research note. "Integrating advanced tools with proactive support capabilities can free support staff to focus on high-value interactions with IT departments and end users. In addition, enterprises are looking for their support services providers to offer end-to-end capabilities for their environments. By including third-party applications in SAP Enterprise Support, SAP will be able to provide a complete software support solution for its customers."
Network World is an InfoWorld affiliate.