SAP's feet put to the fire

Helmuth Gumbel, ex-Gartner and generally sharp chap has opened a blog. Who's Helmuth you might think? I've known him maybe 6-7 years and he's always been one of those shadowy types who prefers to keep away from the limelight. Even so, he knows his SAP-stuff like very few others and especially the detailed situation in the German speaking territories. Anyhoo - in the opening salvoes, Helmuth takes SAP to task on a variety of issues:

Exhibit no. 1: for not being flexible about maintenance in an insolvency:

Most of the 350 users of their SAP system are gone. Only about 50 are left and, of course, the HR-system is required to pay the residual staff. Closer to year end, a few legal updates will have to be fitted to the SAP-HR-installation.

The administrator, in an attempt to make sure that staff can be paid, asked SAP to accept a partial maintenance cancellation for 300 seats...

SAP refused to accept the partial cancellation. Either you cancel in full or you pay in full. Under German law, the maintenace bill ranks way lower than salaries in an insolvency. SAP, however, has apparently found a way to circumvent this.

Not nice.

Exhibit no. 2: SAP penalizes loyalty

In a few days, SAP will send out letters to all those German customers who have remained on standard support. Recent surveys indicated that this is over 60% of the installed base. In this letter, SAP will enforce a hitherto never used clause in their maintenance agreement. This clause allows for a salary-index based increase of maintenance.

SAP plans to apply this clause retroactively. This means: old agreements will see a higher increase. Hence, loyalty is not rewarded – rather, it is penalized — a first in the industry.

Novel to say the least, perfectly legal but is this what one would expect in the teeth of a recession?

Exhibit no.3: Helmuth is running a two day conference in Cambridge MA under the title Sapience 2009:

The conference explores strategies for moving to a more heterogeneous environment by leveraging existing investments. Featuring best practices from companies who have already started the process, sessions on the legal implications as well as the impact on maintenance contracts, and other key considerations such as augmenting SAP through cloud offerings, the conference is designed for IT executives looking to reduce expenses and their reliance on a SAP as their sole ERP vendor.

The kicker? The first day coincides with SAP's Influencer conference just down the road in Boston. Sapience details can be found here. It has a solid line up of speakers which is being added to over the coming days. I'd expect the conference to do well.

Soundings in territories with which I am more familiar suggest the ongoing rumblings around the SAP maintenance issue are not going away. I see more CXO's willing to ask some of the hard questions and engage with experts prepared to argue the case or at least guide the client towards a more satisfactory conclusion.

Finally - you all thought I was tough on SAP? These are just samples. Mark Helmuth down as one to follow.