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What is the Latest on the SAP Maintenance Fee Controversy?

The Silent TechEd ‘08 Issue: Maintenance Fee Increases and Customer Dissatisfaction

In my PAC blog entry on TechEd, "Inside the Hype of TechEd 2008," I wrote about two topics that I thought deserved more airtime than they got at the conference: the Oracle-SAP lawsuit and the maintenance fee increase backlash. I noted that the latter issue is the one that concerns me the most. To be honest, the more I think about it, the more it bothers me. I’m not sure I gave this enough weight in my TechEd in Review piece. Just because an issue isn’t talked about doesn’t mean it’s not important. Sometimes, it’s the elephant in the room.

  I think what disappoints me about this issue is that SAP has done such a brilliant job cultivating goodwill via their online communities. I’m not clear why they would want to risk that goodwill by bumping maintenance fees up 30 percent. Now, in my podcast with Robert Max on RunSAP, we talked about the possibility that SAP could deliver value through its new Enterprise Support package that would justify the higher increase. One can hope that this is true, but I think it’s pretty clear that SAP has not managed to make the "value" case yet, at least not in the discerning eyes of its customers.

At best, this is a botched PR/customer relations job, at worst, it’s a real impediment to SAP’s ongoing relationship with its customers. If the history of business has taught us one thing, it’s this: don’t take advantage of a captive audience. And I would add: don’t be warm and friendly with one hand (the online communities) while slipping the cold knife with the other.

The other danger to SAP not backing down from its support rate hike is that it reinforces the fear that with the departure of Henning Kagermann and the ascension of Leo Apotheker as the sole CEO, that SAP will indeed focus more aggressively on achieving the kind of profitability that Oracle reports, perhaps at the expense of other crucial intangibles, such as customer goodwill, or other super-tangibles, like the "spare no expense" German engineering and R and D that made SAP the most robust business software ever created. This is the time for SAP to quell these fears, not reinforce them.

To illustrate my point, I’d like to share with you a series of Tweets that my friend Jim Spath shared on his Twitter account. Before I post them, I’d like to point out that Jim is a level-headed guy (I did an ASUG in Review podcast with him this spring) who is not an axe grinder. He’s an SAP mentor, a hugely prolific and respected SDN contributor, and he’s also a year-round ASUG community facilitator in "BITI," the largest of ASUG’s technical Special Interest Groups (SIGs). If you’re SAP, Jim is someone you want on your side.

So with that in mind, take a look at the disintegration of Jim’s patience during an SAP Support Panel during ASUG’s Fall Focus event:

"Open forum on SAP enterprise support. Mark Cordey of SAP, Bruce Richardson of AMR, and Josh Greenbaum, analyst from Enterprise Appl. Consulting"

"Cordrey answered my comment that solving problems taks longer now than 10 years ago by saying Solution Manager instead of OSS. Total baloney."

"Cordrey: Solution Manager is a prerequisite for future support. He thinks that is minimal effort for SLA. CCC changed to CCOE. (why?)"

The others are talking generalities, comparing to Oracle and other vendor. Josh says ‘negotiate,’ in other words push back."

Cordrey: support has been ‘industrialized’ which is another meaningless phrase for all occasions. Keeps saying more services delivered (huh?)"

That’s all the teflon I can take. Outta here."

And Jim was off to the Smoky Mountains. But these issues will be awaiting him and his Black & Decker team when he gets back.

Full credit: Dennis Howlett, who is also a very popular Tweeter, SAP mentor, and widely read industry analyst, was the first one to immortalize Jim’s last post and quote a couple of his ASUG Fall Focus tweets in his own blog. Dennis’ entire post is worth reading because he smartly frames this issue as an opportunity for SAP.

While Jim’s Tweets are classic, and have a humorous edge, in a way, they are a bit sad, as they show that a company that is doing great things on some fronts is risking a lot of unnecessary customer pushback on the other. One can only hope that there will be some kind of positive resolution to this issue. From what I have heard, SAP customers are more than willing to meet SAP in the middle. Everyone wants fair value, hopefully it can be found.

Jon Reed notes: Jim’s Spath’s comments in this piece represent his personal opinions only, and are not in any way the official positions of the organizations he is affliated with.

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