SAP will delay further maintenance and support fee increases until key performance indicators (KPIs) -- developed with SAP user groups to measure the value of those proposed increases -- are met, the vendor announced today.
SAP has also agreed to stretch out the SAP Enterprise Support price increase until 2015. Under the original proposal, customers' bills would have increased in steps from 17% to 22% of net licensing fees over the next four years.
The next price increase -- slated for 2010 at 18.9% -- will go into effect only if the KPIs are met. But SAP "fully intends" to meet the KPIs set for this year, a spokesman said.
"We want to demonstrate our commitment to our customers," SAP spokesman Saswato Das said. "This is really a model for the evolution of software support."
The maintenance fee increase, announced in July, met with opposition from customers in SAP user groups, who then united and pushed SAP to prove its value.
SAP maintained that the price increase was necessitated by the growing complexity of its customers' systems, and that it was worth the money. Originally, SAP planned to increase support costs to 18.3% in 2009, 19.8% in 2010 and 21.4% in 2011, ultimately reaching 22% of net licensing fees by 2012.
But in the fall, SAP and the SAP User Group Network (SUGEN) -- representatives from user groups across the globe -- announced they would work together to come up with new maintenance terms.
In the new model, a group of 100 customers from around the world on releases of R/3 4.7 or higher will act as the benchmarks to determine whether SAP Enterprise Support is worth the money. The group will be selected by SUGEN.
SUGEN will track the value achieved by a group of customers in four categories: business continuity, business process improvement, protection of investment, and total cost of operations. Those KPIs will be evaluated in six months and then on a quarterly basis for the next four years, Das said.
These benchmarks will then be evaluated by an independent third party.
If the KPIs are met, price increases will proceed as follows: 18.9% in 2010, 19.5% in 2011, 20.1% in 2012, 20.8% in 2013, 21.4% in 2014 and 22% of net licensing fees in 2015. The cost increase this year, which has already gone into effect for many customers, is 18.36%.
No one will see an increase of more than 3.1% annually from 2010 on, SAP said.
"We are convinced that SAP Enterprise Support delivers unparalleled value to all customers and, as a demonstration of our commitment, we will provide tangible reductions in their operational costs on a defined schedule," SAP co-CEO Leo Apotheker said in a press release.
The new deal applies only to customers who purchased software with SAP before July 5, 2008.