Zut alors! the French are revolting

The French have a long tradition of using cartoons to make a point and this does the job perfectly. Referring to SAP's proposed price increase in software maintenance costs, LeMagIT is reporting that USF - the French equivalent of ASUG is applying pressure to see action in relation to the KPI's that SUGEN is supposed to be negotiating with SAP. So far there has been near radio silence on that topic, despite the fact Bill Wohl, whose LinkedIn profile says he is VP of PR at SAP, told me in December 2008 that there was a commitment to having the KPIs agreed by the end of Q1 2009. That time has now passed and it is clear from the LeMagIT article that Jean Leroux, the head of USF, is running out of patience.

My condensed translation of what the article says (I used to live in France and speak the language) goes something like this:

• USF accepts that in the long term, SAP will be able to get to 22% maintenance which will bring it in line with Oracle. (I have my doubts about that as a sustainable business model as I've said many times.)
• SAP is dragging its feet in discussing what customers will get for their money - this has been ongoing as a discussion topic since last July
• Uncertainty for CIO budgets is causing problems among user companies
• Some customers are refusing to pay what is currently an 8% increase on 2008 rates but that SAP has done nothing to chase the outstandings
• USF is demanding the same moratorium on price increases that certain other territories were able to squeeze out of SAP. USF is not convinced of the legal arguments that have led to what it believes is the operation of discriminatory double standards
• USF has set up a legal service to assist customers. The service is available via USF's wiki.
• Despite the actions being taken by some USF members, Leroux remains hopeful that a sensible dialog can bring a compromise with which both sides of the argument can live.

The article describes the mood as one of 'revolution' a term the French like to use as an expression of displeasure. At the same time however, the cartoon makes clear that SAP customers are finding it hard to pay in these recessionary times, seeing the enterprise support bludgeon as a way of ensuring SAP bonuses. It's a harsh way to characterize the situation but understandable and perhaps gives an insight into the depth of ill feeling among SAP customers. As I know from discussions with users and other analysts - there's a lot of pain out there.

The danger for SAP is that without agreement with SUGEN, more customers will see an opportunity to take their cue from the French, withhold cash and so bleed the company from expected cashflow. It is hard to know what impact such measures are likely to have but it will create uncertainty for everyone.And you can bet it will be a discussion topic at the next financial analyst call.

Unfortunately, attitudes are hardening on both sides of the table. Someone has to give. The question is - will SAP suck this one up, rethink its policy and come out the other side looking good? I have no idea but as I said on an analyst call today: all bets are off.