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SAP to push on with Enterprise Support, but offers sweeteners

SAP is pushing ahead with Enterprise Support, but it's also promising to support its ERP 6.0 customers through 2017 and offering more clarification on Enterprise Support's value.

Confronted by a user community and analysts over the recent adjustment to its support package, SAP said today that it will continue to roll out Enterprise Support as planned but promised customers on ERP 6.0 that they will be supported through 2017.

Customers on SAP ERP 6.0 will be supported through 2017 on Enterprise Support. Starting in 2009, Enterprise Support costs will increase from 17% of net licensing fees to 22% over a period of four years. Customers are then guaranteed an additional two years of support, but at a higher price. It's the longest time frame SAP has offered to support a release.

"In today's environment, customers are taking a little bit longer to go through their rollouts [and are saying]: 'I want more time to realize the full value of that investment,' " SAP spokesman Bill Wohl said. "We're giving them more time to do that."

The time frame is significant -- and a big sweetener to the program, according to Paul Hamerman of Forrester Research.

"Customers are looking for more flexibility to upgrade at their own pace," said Hamerman, who is vice president, principal analyst with the Cambridge, Mass.-based firm.

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And while it doesn't apply to customers on R/3 and non-NetWeaver-supported releases, it is an incentive to get them to move forward. Roughly a third of SAP customers are on ERP 6.0, Hamerman said.

SAP has also added some features to its support offering to address concerns that customers have raised since it first released the new package. SAP is offering support for R/3 customers to help them migrate to ERP 6.0 and adopt the new enhancement packages, which provide downloadable upgrades and new functionality. The enhancement packs are a key feature of SAP ERP 6.0 and will be delivered through Enterprise Support.

Customers will now be provided with up to five days per year of remote advice from software architects to assist in evaluating the SAP enhancement packages and how they may be deployed for business process requirements.

And for midmarket customers, a group especially concerned with the value in SAP's new support structure, the company will study how to ease the transition to an SOA.

SAP announced in July that it would start rolling out Enterprise Support for all of its customers in 2009.

Since then, customers have voiced concerns over the new offering, prompting the SAP User Group Executive Network (SUGEN) to form a special task force -- the SAP Enterprise Support Task Force -- to address them. In fact, 90% of respondents in a SUGEN survey indicated they have not yet realized the full value and cost justification of the SAP Enterprise Support offering, according to a press release.

SAP has been resolute that it made the right decision with Enterprise Support and that customers were seeing and would continue to realize the value in the new offering. Yesterday, SAP CEO Henning Kagermann told the Goldman Sachs Software and IT Services retreat that he would have changed only one thing about SAP's decision.

"What I learned is, we could have communicated it a little bit better. That's the only thing," Kagermann was quoted as telling the audience in an article in ComputerWorld.

SAP is also teaming up with SUGEN to establish key performance indicators (KPIs) for customer adoption, customer awareness and customer satisfaction of SAP Enterprise Support, Wohl said. SUGEN and SAP will jointly evaluate the progress of these KPIs against customer expectations on a regular basis and adjust the continued rollout of SAP Enterprise Support until the quality measures are achieved.

But Wohl wouldn't say whether SAP would adjust the pricing increases in response to those KPIs.

"Whether we need to change our approach or increase our commitment, we haven't crossed that bridge yet," he said.

SAP will also continue to work with user groups to create materials and help customers understand Enterprise Support, including holding more customer workshops.

"SUGEN and its member user groups serve as a vital sounding board to help SAP validate our new initiatives," SAP CEO Leo Apotheker said in a press release. "From the open feedback received, we offer our commitment to SUGEN and our customers to help them realize the value of SAP Enterprise Support. We stand by our latest support offering, and we look forward to continuing our dialog with SUGEN and its members."

SAP has also clarified some of the key features of Enterprise Support.

Custom code support: For custom code built with an SAP development workbench, SAP provides mission-critical support for root-cause analysis for priority "high" and "very high" messages. SAP will offer two checks per software per year.

Testing efficiency improvement: To help customers optimize testing for SAP and non-SAP systems by helping them to figure out the full scope of testing required -- Enterprise Support includes preconfigured test cases with Solution Manager.

Enterprise Support report:This will be delivered once a year when requested, and it provides recommendations for maximizing the value received from SAP Enterprise Support.

Guidelines for configuration and operations: Guidelines and predefined content for configuration of future SAP products, as well as best practices for system administration and end-to-end operations.

Analysts said that taking advantage of these offerings will be key to realizing value in Enterprise Support.

"My advice to customers is to monitor their usage of the support services and try to maximize that usage by taking advantage of all the things that are offered," Hamerman said.

In a press release, Bruce Richardson, chief research officer at Boston-based AMR Research, said: "These enhancements to SAP Enterprise Support bring to the front some hidden gems that are under-hyped by SAP."

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