SAP extends support, revamps licensing

In a day full of announcements, SAP rolled out a bold new maintenance calendar and introduced the latest edition of its integration platform.

PALO ALTO, Calif. -- Responding to customer complaints that its migration path is confusing and costly, SAP today announced a bold new maintenance calendar that extends the company's current support deadlines by years.

The updated support schedule came as the software vendor introduced the latest version of its integration platform, NetWeaver 2004, which executive board member Shai Agassi called the largest project in the vendor's history.

The company is hoping that NetWeaver will drive upgrades because customers who license mySAP ERP and the mySAP Business Suite receive the full technology stack.

The 512 plan

SAP R/3 3.1 through 4.6B
Maintenance extension until December 2006
2005/2006: additional fee 4% (17% plus 4%)

SAP R/3 4.6c
Maintenance extension until December 2009
2007: additional fee of 2% (17% plus 2%)
2008/2009 (17% plus 4%)

SAP R/3 Enterprise:
Maintenance extension possible until March 2012, available to all customers
April 1, 2009-March 31,2010: additional fee of 2% (17% plus 2%)
April 1, 2010-March 31, 2012: additional fee of 4% (17% plus 4%)

MySAP ERP 2003
Mainstream maintenance until end of March 2009
April 1, 2009-March 31,2010: additional fee of 2% (17% plus 2%)
April 1, 2010-March 31, 2012: additional fee of 4% (17% plus 4%)


MySAP ERP 2004
Mainstream maintenance until end of March 2010
April 1, 2010-March 31, 2011: additional fee of 2% (17 plus 2%)
April 1, 2012-March 31, 2014: additional fee of 4% (17 plus 4%)


All of the above maintenance durations and extensions include all industry add-ons and all legal charges for HR and FI/LO.

Source: SAP

Acknowledging that customers were overwhelmed by options and craved a clear-cut upgrade strategy, the company dubbed its new maintenance and release strategy the "5-1-2" plan. Mainstream maintenance for all SAP products will stretch five years from the general release date. After that, customers can extend maintenance for one year for an additional 2% and for two additional years at a rate 4% above the annual maintenance fee.

After eight years, customers who don't commit to an upgrade have to arrange for more costly, custom maintenance plans.

"What customers said was, 'Wait a second. This is happening too fast," said SAP spokesman Bill Wohl, referring to SAP's phasing out its core R/3 product in an effort to get customers to buy in to the mySAP Business Suite or the scaled-down mySAP ERP.

SAP may be allowing customers more time to choose an upgrade path, but the company is also providing incentives for users to commit to either mySAP ERP or the full business suite. SAP will credit R/3 license fees toward those new licenses, Wohl said. The sooner a company begins an upgrade, the more credit toward the new license it will receive.

The "5-1-2" announcement, which SAP CEO Henning Kagermann was scheduled to introduce at CeBit 2004 in Hanover, Germany, comes as SAP is kicking off a 50-city global tour touting a newly synchronized NetWeaver platform. NetWeaver will now be sold as a single package that includes enterprise portal, business intelligence, master data management, exchange infrastructure, Web application server, composite application framework and solution manager.

"This is big news," said Joshua Greenbaum, principal analyst at Enterprise Applications Consulting, in Daly City, Calif. The newly packaged NetWeaver technology means that "SAP has pulled together all of NetWeaver into a single instance, in a single box," Greenbaum said.

In an interview with SearchSAP.com, SAP executive board member Shai Agassi said that some early adopters of NetWeaver, including large clients such as Visa International, are investing in the platform even though they are not SAP shops. Since many of its partners run SAP, Visa has started integrating NetWeaver as a way of reducing its data and enterprise integration costs, Agassi said.

"Five years from now, you'll look back on this date and you'll say, 'This was as big a shift as happened between mainframe and three-tier client-server," Agassi said at a NetWeaver 2004 press conference.

NetWeaver was introduced more than a year ago. It marked a strategic shift for SAP because it helped integrate SAP software with competitors' applications. The company is now selling the technology as a product –- not a project, a technology stack rather than individual components, Agassi said.

"We basically see this as the next architecture for the whole enterprise," Agassi said. "Not just for one solution, but for the whole enterprise. This is how landscapes will be shaped in the next five to 10 years."

"This is a big deal for the users," said Gartner analyst Yvonne Genovese, one of those who, when the technology was first introduced, expressed some skepticism that the company would be able to effectively deliver its NetWeaver message.

"NetWeaver is finally one thing, one product that users can see clearly and understand," Genovese said. "So that synchronization is a good thing for users."

FOR MORE INFORMATION:

Article: Yankee: NetWeaver can cut TCO

Interview: SAP's Zencke on RFID, NetWeaver and upgrades

Article: Some SAP shops take smaller upgrade steps

Article: SAP users want to unravel NetWeaver mystery

Article: SAP: Skip Enterprise, jump to mySAP ERP

Featured Topic: What is NetWeaver?

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