Although enterprise IT departments have always needed software support from their core providers for deployment,...
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integration, upgrade and patch challenges -- not to mention critical incident fixes -- this support is being pushed and pulled in new ways, most recently due to the rise of cloud-based offerings. These changes are not lost on SAP, which is operating right in the middle of traditional on-premises offerings and its own software as a service (SaaS) cloud efforts with products like Ariba, SuccessFactors and HANA.
Hybrid environment support trends for SAP customers start with an immediate tension between the promise of the cloud -- fast implementation and setup -- and the reality of integrating cloud platforms with on-premises enterprise ERP.
"Customers underestimate the effort of integration because the pitch is, with cloud, you just pay and everything is done for you, but this is only true to a certain extent," said Maximilian Veith, global program lead for SAP Enterprise Support and SAP ONE Support. "With all cloud providers, the business still needs to own the business process, still needs to make decisions to know which options to turn on, still has responsibility to test -- and this is still highly underestimated in what we're seeing."
The cloud is not an IT-free zone
Veith said that SAP support teams are doing a lot of "expectation setting" with customers, describing what they still have to do when they acquire cloud-based services. "It's not so much about incidents, it's more about right-sizing expectations after the sale," he noted. "Cloud is not a 100% IT-free zone, so that is something we have to communicate."
To complicate matters, the rise of cloud and mobile applications means that far more employees from customer environments are reaching out to SAP support services for assistance. In addition to traditionally trained IT staff, today's software support services need to be ready to assist more people than ever before, Veith said.
Consequently, SAP's software support includes efforts to distribute best practices knowledge and proactive education. SAP has multiple types of software support services, and in 2014 it launched SAP ONE Support in an effort to combine and harmonize its services across SAP offerings. This move gives customers a single method of engaging SAP support services, instead of having multiple support portals for cloud-based products along with different ways to access traditional support for on-premises applications.
SAP launchpad designed to streamline support
Recently, as part of its SAP One Support program, SAP introduced SAP ONE launchpad, a user-centric support entry point for all SAP customers. The launchpad is a funneled entry point to support services that also provides learning modules personalized for each user's technology and product needs.
Although SAP ONE Support is great in theory, the harmonization of support brings up concerns around how customers consume and pay for support. Typically, the cost of managing hardware and virtual instances in a cloud data center is built into the subscription price for cloud services because a company's IT staff doesn't perform upgrades or patch systems, much less worry about plugging them into a power source and backing them up. At the same time, cloud services often come with requirements that let the provider push out new functionality and versions whether the customer wants them or not.
"SaaS products like SuccessFactors have a different updating model compared to traditional SAP on-premises software, which means that customers need to more actively assimilate software enhancements to these products," said Paul Hamerman, vice president and principal analyst of business applications for Forrester. "There are also different cost models to consider as SAP transitions customers to more subscription-based revenue models as license revenues decline."
On the upside, Hamerman noted that SAP will be offering customers maintenance credits against SaaS subscriptions to accelerate the revenue shift to the cloud.
The HANA factor complicates support
Although SAP produces maps that show all roads lead to HANA, even customers who know they will move to HANA end up considering the question of when, which complicates their support contracts.
"The biggest quandary customers are in right now is that SAP is moving to its new platform -- converging all products on HANA -- and customers have to decide when to switch to HANA," said Akhilesh Tiwari, global head of the SAP practice for Tata Consultancy Services.
"From a support standpoint, for customers who have hardware in an end-of-life stage the decision is easy; but for others, it's hard," he explained. "Do they invest in moving to new hardware now or wait? That's making support equations quite interesting -- if you move to HANA, how do you stagger it?"
When customers aren't adopting new SAP technology quickly, the value of SAP support services rapidly shifts to a pain point -- a cost center. "Customers that don't upgrade often, for example, tend to feel that they are paying too much for support," Hamerman noted.
Enter the need for third-party support
The world of SAP support is constantly moving, with a lot of overlap among implementation partners and software providers. Often, SAP customers engage an SAP business partner and that business partner provides services that can slip into "support" situations that could last months or years. At the same time, an implementation partner may provide some level of support -- but also tap into SAP support services as situations become particularly troublesome or dire. Trying to identify and define the full world of SAP support is like trying to map the position of icebergs while ocean currents continuously swirl.
But another type of third-party support is aimed squarely at cost savings while disengaging from SAP support and maintenance services. The two largest and most well-known third-party support providers for SAP products are Spinnaker Support and Rimini Street.
Both companies say clients come to them to save money on support costs, although the cost-saving motivation is more complicated than it seems. For instance, Lee Mashburn, vice president of marketing for Spinnaker Support, said that some customers are not willing to stay on the most current SAP software releases -- either due to financial duress, migration to a different vendor software platform, not realizing enough synergy with SAP or simply being comfortably stable with their current version.
Companies turn to third-party software support for cost savings
"As SAP software versions age, there comes a point where SAP begins to cut service and raise price for support," Mashburn noted. "User organizations may not see value in an upgrade -- where they might lose customized functionality as well -- so they are faced with lessening support value when they eventually lose bug fixes, tax and regulatory updates, etc."
In addition to essentially "parking" an application to reduce support and maintenance costs, some companies turn to third-party maintenance savings as a strategic initiative to redirect cost savings into new products, Mashburn said -- a tactical move that Rimini Street is also noticing.
"Companies are starting to buckle down on running their core on-premises ERP as efficiently as possible -- then add cloud and other systems to drive innovation around the edges of the core ERP," said David Rowe, senior vice president and chief marketing officer for Rimini Street.
"From a support-specific perspective, if an SAP customer can more cost-effectively support their ERP core -- especially if they have a lot of custom code or find it unnecessary to upgrade to SAP's latest versions -- this strategy can let them shift funds from 'keeping the lights on' to investing in new applications that still work with their systems of record," he explained.
Recognizing a new opportunity for software support services
Ultimately, SAP software support -- and a myriad of services that revolve around support -- is evolving far beyond simple, tightly controlled on-premises landscapes with key IT pros handling everything.
For SAP's part, it recognizes a new opportunity for SAP software support services: value realization. SAP proactively helps customers with best practices around the configuration of their systems by communicating industry KPIs and providing educational services delivered through SAP's support organization. SAP seems keenly aware that customer expectations are evolving -- especially as it works with customers that have fractured-but-connected hybrid environments.
"We believe support is a customer care business, not a reacting on incidents business," Veith explained. "We strongly believe that if we provide good support and service, we know it will drive decisions in the future, because we believe that beefing up support is the right decision, and especially for cloud, where you have a more funneled offering, we can deliver a better way to deliver knowledge that is highly appreciated by customers."
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