Wednesday, February 6, 2013

SAP Plugs Profit Hole With Support Price Hike

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  Wednesday, February 6, 2013
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Doug Henschen
Doug Henschen
 
SAP Plugs Profit Hole With Support Price Hike

A controversy around the price for SAP software support dogged the brief tenure of former company CEO Leo Apotheker, and now the topic has reared its head again. SAP resurrected the topic by telling customers Monday that it will increase the annual cost of new Standard Support contracts from 18 percent to 19 percent of the original software licensing, effective July 15.

An SAP spokesperson on Tuesday told InformationWeek that the planned increase will be "relevant for a relatively small group of SAP customers," because the "new customer adoption rate for Enterprise Support is 95 percent." Enterprise support is 22 percent per year.

However, that 95 percent only refers to new customers making this choice since this option was available. Don't confuse this adoption-rate stat with the current ratio of all customers on Enterprise versus Standard contracts. That's a figure the spokesperson said SAP does not divulge. If the total on Standard Support isn't much higher than 5 percent, it's hard to believe the company would bother revisiting this PR nightmare of a topic.

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JOIN THE CONVERSATION Posted By Andrew Hornback:
"Maybe if you need to expand more than 25 percent of the CPU capacity, the system will call your Oracle Sales Engineer for you to let you know that you need to buy more!... Looks to me like Oracle's simply trying to manufacture new revenue streams and slap the cloud label on it so that it'll sell at the C-level--because everyone needs their own private cloud."
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