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Is SAP Backing Down on Enterprise Support?

When you are blogging on a fast-moving issue, you can get caught with postings that seem out a bit out of date the moment you publish them. This has happened to me lately with SAP support. On Monday of this week, I issued an in-depth post on the issue of SAP support for PAC, and how it did (or didn’t) connect to ASUG’s dismissal of CEO Steve Strout. Almost as soon as I published the entry, some important news broke. The news didn’t change the fundamentals of the piece, but it still meant an update is needed. Meantime, I was also about to post another piece on SAP support, this time looking at some of the underlying issues of the support quality.

So, with this blog entry, I’m going to provide an update on how the latest support news broke, so that I can link to it from my other pieces and hopefully provide a more complete view.

  Here’s a simple play-by-play on how I found out about this news: I was offline early on December 9th when Oliver Kohl, an SAP Mentor based in Germany, first Tweeted news that SAP was changing its Enterprise Support agreement with Austria and Germany. (Follow Oliver on Twitter). The initial article reporting this was in German. Others picked up on the story. ZDNet blogger Dennis Howlett, who is always in the lead on the SAP support issue, published a breaking news piece on the topic on the morning of December 9th.

The “meat” of the story is that SAP agreed to honor existing contracts with SAP customers in Austria and Germany that essentially postponed the imposition of Enterprise Support (at higher rates) until 2009. The initial buzz on Twitter was that SAP was backing down on the Enterprise Support increases that have been a bone of contention for SAP customers. This move was first seen as a concession that would eventually lead SAP to repeal support increases in other countries and perhaps alter their support fee strategy permanently.

On Wednesday, December 10th, Courtney Bjorlin, News Editor at SearchSAP.com, published a useful update that included some fresh quotes from SAP spokesman Andy Kendzie. Kendzie’s quotes gave the impression that SAP intended to continue to take a hard line on SAP support: “Germany and Austria are the only markets where the change is relevant. In all other markets, we’re moving forward with the SAP Enterprise Support plan.” Bjorlin’s piece also included some comments from Ray Wang, Vice President and Principal Analyst with Forrester. Wang has been on the forefront of the ERP support conversation and deserves credit for furthering the discussion with a strong voice rather than being an apologist for the ERP vendors he covers.

In the SearchSAP.com piece, Wang offered some clarifications: Germany and Austria had a unique opportunity to apply leverage to the support fee negotiation because of some aspects of German and Austrian contract law. On Twitter, Wang later pointed out that global companies could benefit from this exception by finalizing their SAP contracts in Germany or Austria.

Next came another update from Dennis Howlett, issued earlier today (Wednesday December 10th), which included excerpts from an interview he did with Bill Wohl, Vice President, Field Communications SAP. In Howlett’s post, he provides some context for why Austrian and German companies were in a different contractual situation than other SAP customers.

So where does this leave us?

1. There is ongoing debate as to whether the change in SAP’s contract terms with Austria and Germany represents the beginning of a sea change on Enterprise Support, as many originally thought, or whether this is more of an isolated instance.

2. We can expect considerable discussion about the whys of different SAP customers in different countries receiving different fee agreements.

3. SAP will continue to talk with the SUGEN group (a board of SAP user groups) about KPIs that will be used to judge the value delivered with Enterprise Support (see my article in PAC’s blog for more on this).

And what do I think?

1. Regardless of SAP’s current game plan, there’s no question that now is the time for SAP users groups throughout the world to seize this opening and insert themselves into this discussion aggressively, either through the SUGEN group or through informal back channels. SAP may have one idea of how this is going to go down, but users should act now to help shape the terms they would define as “fair” for support.

2. In his piece with Bill Wohl, Howlett noted that he picked up on a higher level of SAP user frustration than Wohl sees. There does seem to be a disconnect between how SAP perceives Enterprise Support and how users perceive it. SAP seems to realize that better user education about Enterprise Support is in order; hopefully users will take advantage of this opportunity to be clear about their take on the value of Enterprise Support as well.

3. In my blog post on the deeper issues with SAP support, we hear from SAP technical managers who remind us that their main issue with support is less about price and more about quality. There is work to do here that will not go away, no matter what SAP concedes on price alone. Part of the issue is the perceived idealization of Solution Manager as the “wondertool” that will solve support in large part on its own, as opposed to a customer desire to better integrate tools, online communities, and human intervention into one complete support offering. Some ideas along those lines are shared in that blog entry.

4. SAP seems to be under the impression that they are going to have no problem managing the satisfaction levels of customers in different countries that are subject to different support agreements. At best, this seems like a situation that will breed confusion. More likely, it will fuel existing resentment about enforced support increases. SAP has more smarts in its leadership team than I do in my office tonight. That’s why I’m shocked by the public quotes from SAP implying that two countries can be offered a support break without ramifications. This is not the kind of ahead-of-the-curve thinking I have come to admire out of SAP. I can only hope that behind the scenes, there is an awareness that more changes will need to be made.

5. If Bill Wohl is not concerned about SAP customers eventually moving off the SAP platform because of support issues, he should be. As I explain in my other SAP support piece, SAP customers may have an opportunity in 2010 to vote with their wallets and head over to Oracle Fusion. And that’s not even counting the various "ERP as a Service" or "ERP in the clouds" options that may well have more clothes on their bones in a couple years time as well. I’m not sure why SAP wouldn’t take these possibilities very seriously and do everything possible to ensure that their customers are not only committed to them but happily so.

My goal in providing these updates on SAP support has been to give readers some important links for context on this issue. The intention is not to point fingers but to spur all stakeholders to join in a more constructive conversation. If I have not succeeded in that goal, please share your comments so we can move the dialogue in that direction.

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