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SAP price hikes delayed

The UK SAP users group predicts rises will not arrive until Q2 next year, after SAP announced its value benchmarking timescale had slipped
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Written by David Meyer, Freelance reporter on

The business software maker SAP has delayed price rises for its customers, after the timing of a user benchmarking scheme designed to set the level of the increase slipped.

On Tuesday, SAP said it will give details on the outcome of the key performance indicator (KPI) programme early next year, and its proposed price increases — originally slated for January — will be postponed. The SAP UK & Ireland User Group told ZDNet UK that the increases were unlikely to take effect until the second quarter of 2010.

SAP said in 2008 that it intended to move its customers across to Enterprise Support. User groups reacted by kicking back against the price rise this shift would entail, which would see the charge go from 17 percent of total licence cost to a proposed 22 percent.

In April this year, SAP agreed to the KPI programme, a scheme that is intended to accurately gauge the value for money SAP users are receiving.

The scheme launched in July. According to the original timetable, the first KPI benchmarks were set to be reported in September 2009, with the agreed price rises following in January 2010.

However, SAP's first report of the KPI programme only occurred on Tuesday, when it said in a statement that the indicators "have shown clear value to participating SAP customers".

The software maker has now formed a "task force to reach out to customers and user groups to continue and enhance the ongoing dialogue and incorporate their feedback in order to maximise customer value from SAP's entire support offerings", the company said, adding that the "outcomes" of this task force will be provided at the beginning of 2010.

"Until then, a decision on pricing for Enterprise Support has therefore been postponed," the company said. "With this, SAP once again demonstrates that it takes the concerns of its customers seriously and also recognises the ongoing pressures bearing down on IT budgets in the current economic environment."

News of the delay was welcomed by the SAP UK & Ireland User Group, whose chairman, Alan Bowling, said in a statement that the benchmarking programme was always going to be "a difficult process, especially in the time frames involved this year".

A spokesman for the user group told ZDNet UK that any agreed price increases were unlikely to become reality before the second quarter of next year, given the fact that "timelines have slipped".

"[The increases] are probably not going to kick in for Q1 [2010], from a practicality point of view," the spokesman said.

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