Support price hikes will put pressure on SAP users

With tough times facing British businesses large and small in 2009, many SAP users are understandably concerned about the impact of the company's planned price rises for its restructured support contracts.

That was among the themes emerging from this year's SAP User Group conference in West London this week.

Back in June SAP announced that it would be discontinuing standard support capped at 17 per cent of licence fees, replacing it with enterprise support with a new fee structure that will rise to 22 per cent of fees over the next few years.

The first price rise is due in January 2009, increasing the support cost to 18.4 per cent of the SAP licence value. With that in mind, coupled with the economic pressures facing users, the SAP User Group has taken steps to try and ensure that users receive ample return on investment for the increased support charge.

"The SAP User Group Executive Network has held talks with SAP and agreed a collaborative move to monitor the value of enterprise support," said Alan Bowling, chairman of the UK and Ireland SAP User Group.

The two will monitor the service offering that customers moving from standard to enterprise support are receiving to ensure that the revised support product meets agreed benchmarks in order to justify the price increases.

"Economic conditions are going to be a major challenge for users in the new year. We are working with members to help them identify and add value to their IT. In times of economic pressure, the last thing you want is systems breaking and falling over. The challenge will be to ensure predictability in people's solutions and ensuring they function smoothly and reliability," added Bowling.

Also revealed at the conference was SAP's lifecycle plans for its current product range. SAP confirmed it will introduce a 7+2 model, comprising seven years of standard support and two years of extended support, taking products through to at least 2017.

"The 7+2 model will allow companies to manage the migration process and maximise the ROI of their existing products," Bowling told IT PRO.