Friday | 9 January, 2009
New SAP customers face price hike
Enterprise replaces cheaper support offerings
Darren Pauli 11/03/2008 13:25:21

A government project manager, who requested anonymity, said small and medium businesses will be out of pocket because they will be forced to pay for possible unnecessary features.

"Big organizations can force a hard sell but the smaller guys will just be stuck with it," he said.

"Its a sneaky way of jacking up the price."

SAP and Oracle are now equals according to Forrester analyst . He said the changes have cost SAP its price advantage over rival Oracle.

"It may very well be they will try to harmonize their maintenance to 22 percent across their customer base - this is why [Basic Support] customers should be careful about that," Wang said.

SAP said that Enterprise Support program upgrades the Basic and Premium Support options with a pool of full-time available support staff and an upgraded version of Solution Manager and RUN SAP.

SAP US spokesman Bill Wohl said the change was driven by customers who requested the Enterprise support package.

Gartner analyst Jane Disbrow said upgrade cycles can push contract costs up as high as 50 percent with an average rise of 35 percent for SOA deals.

Maintenance and support costs are the surreptitious money spinners of software contracts, according to Disbrow. She said vendors will drop software costs by more than 20 percent or bundle 'free' software to lock customers into mandatory support maintenance and upgrade cycles.

"They offer suites of so-called free products at high discounts which are used to push out competitors because the bundled software is generally what customers will turn to if they need a product," she said.

"But it is a double sting because you still need to buy licences - the up front cost is all about getting the foot in the door.

"The best discounts often have the worst [up front] purchase prices."

-With Brian Fonseca

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