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SAP users seek more clarity on negotiating maintenance, licensing contracts, Forrester says

Matt Perkins, Assistant Editor

Despite the reinstatement of a tiered maintenance and support structure, SAP users are still seeking lower maintenance and support costs, according to a recent analysis of client calls by Forrester Research.

Concerns over licensing, and support and maintenance topped the list. Users want to better

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negotiate their maintenance and support contracts, and perhaps the best option in that respect is reminding SAP that there are alternatives.

"I think it's fair to say that, to some extent, all vendors have felt the fact that their users really have credible alternatives, particularly around open source or around maintenance from third parties," said George Lawrie, principal analyst with Forrester Research and author of the report. "That gives [users] more ability to negotiate in a sensible way."

Of the report's inquiries, 17% said they were most concerned with pricing and license entitlements. Those users were curious about how to secure the best maintenance terms and how to approach application lifecycle management.

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 "I think what they're really trying to do is always trying to match the price to the value that they're getting," Lawrie said. "What they're interested in is the ideas about pricing and certainly the ideas about maintenance."

SAP made the right move, though, when it chose to offer two SAP maintenance and support options earlier this year, he said.

"That showed how responsive they were around the concerns people had about that," Lawrie said. "I think people are definitely happy with options, but I don't have any data that proves that yet."

The report, titled Inquiry Spotlight: SAP Users in Search of Value, identified the most urgent concerns among SAP users based on 501 user inquiries – including SAP strategy and functionality, business intelligence (BI), enhancement packs, and options for SAP services outsourcing and cloud computing – and provided tips on how to develop the right approach for managing SAP investments.

There were several surprising findings in this year's results.

"We thought there would be more about cloud," Lawrie said. "The interesting thing that we find is that it's the larger companies that are most interested in cloud. It's because they reach a level of maturity where they kind of standardize stuff, and then they have a shared service center internally."

He added that as more companies look to implement Software-as-a-Service (SaaS) solutions and as SAP places more focus on its on-demand strategy, more users are expected to hold it as a concern in terms of approach.

Meanwhile, 12% of the inquiries revealed concern around SAP strategy, functionality and positioning, Lawrie said, with a large focus on SAP's NetWeaver strategy. Users were particularly concerned with the level of commitment they should make to NetWeaver, and some customers felt confused as to whether they could use the middleware to integrate their SAP applications with the apps of other vendors such as Oracle and IBM.

"I think one of the things that perhaps surprised me was how people were a little bit naïve about it [NetWeaver] and how they wanted to use it for things it wasn't designed for," Lawrie said. "I don't think it's supposed to be generic middleware. That's part of the SAP philosophy."

Users also expressed concern about how much to rely on SAP's information management tools, as well as other BI solutions against SAP and non-SAP data. While SAP BusinessObjects is aimed at providing a user-friendly tool for consumption of data, users still need to extract that data from transactional apps and load it into a data warehouse for analysis, according to the report.

SAP has yet to put a premium on differentiating itself as a data warehouse vendor for heterogeneous environments, the report states. But Lawrie said it's the perfect opportunity for SAP to come up with a solution that could provide some clarity on where BI ends and where SAP NetWeaver Business Warehouse (BW) begins.

"This [BI] is turning into a bit of an issue in a way," he said. "People don't see [BI] as a transaction; they see it as one continuous process. At the moment, it's kind of, 'Well, this is BW and this is the rest of it,' but to make it all part of it, one kind of single flow, is troubling for quite a lot of people at the moment."

Lawrie added that a new SAP solution to shed light on that confusion could "help people to get a simple flow that includes transaction and analytics all in the same 'day in the life of.'"

"If you think about a lot of what they're doing, it's based on some kind of analytics and data," he said. "What they can't really worry about is whether this is BW, and could somebody package it up for me so it just gives me recommendations."

But before moving forward with discussions on strategic investments, implementations or contract negotiations, users should have a solid understanding of what they want and whether SAP can help them, Lawrie added.

"People sometimes go into discussion without all the information available to them," he said. "Oftentimes, rather than just taking a guess, it would be really good to ask the vendor, 'How can you help me with this?' But I often see them taking a guess and then regretting it later."


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