SAP raises maintenance prices: Will it stick?

SAP raises maintenance prices: Will it stick?

Summary: Standard support at SAP will jump to 19 percent from 18 percent July 15. Will customers ask what support improvements justify the price increase?

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SAP is raising prices on its standard support from 18 percent to 19 percent effective July 15.

The news, delivered by Frank Scavo, principal of consulting firm Strativa, affects maintenance contract signed after July 15. The gist from an SAP email:

To be able to provide the same level of support in the future, we will change the maintenance rate for new maintenance contracts with SAP Standard Support from 18% to 19%, effective July 15, 2013.

This moderate adjustment does not apply to any existing maintenance contracts for SAP Standard Support closed before July 15, 2013. We also want to be respectful about budgets being planned for 2013. Therefore, we encourage you to take advantage of the opportunity to place purchase orders with SAP Standard Support ahead of this change at the existing 18% rate until July 14, 2013.

Scavo said customers should ask what support improvements justify the price increase among other items. Another side effect is that SAP will pull deals forward and that move could impact second half results. 

Here's a look at SAP's 2015 goals. 

sap020413

 

SAP a few years ago tried to bump up its maintenance fees from 18 percent to 22 percent and customers revolted. SAP ultimately backed down. This price increase is easier to digest, but it's unlikely that customers are going to be pleased about it. Rimini Street, which offers third party support, could be a beneficiary if SAP customers bite back.

Topics: Enterprise Software, SAP

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