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11/26/2008
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SAP User Group Fires President

ASUG, which had been dealing with member complaints about SAP price hikes, said Steven Strout's departure resulted from a "strategic decision" by the board of directors.

SAP's user group has apparently fired its president, Steven Strout, after 15 months on the job.

The Americas' SAP Users' Group, or ASUG, distributed an e-mail to its 50,000 members Tuesday, explaining that Strout's departure was the result of a "strategic decision" of ASUG's board of directors, said a spokeswoman. Further questions were referred to Mike O'Dell, ASUG's chairman and CIO at Pacific Coast Cos., who could not immediately be reached for comment Wednesday.

While the reasons behind that decision are unclear, ASUG has been in the middle of a brewing war between SAP and some of its customers over a maintenance-fee hike. Strout had encouraged members to support SAP's price hikes.

"It is true that no one likes rate increases, especially in these difficult economic times, but like everything else in life, these things do occur on occasion," Strout said in a July 25 statement. Strout further defended SAP by noting it hadn't raised maintenance fees for 10 years.

SAP announced in July that it would eliminate its Standard Support offering and said those using it, who pay a maintenance fee of 17% of the price of the software they've licensed, must move to the more extensive, and expensive, Enterprise Support offering, priced at 22%. They'll pay 18.3% starting in January, with gradual annual increases until they pay the full 22% per year in 2012.

Some have complained that they hardly use SAP's support services and can't rationalize a price hike. SAP, in turn, is trying to prove to customers that they can get more out of those services than they may realize and ultimately reduce the total cost of ownership of their SAP software.

In an e-mail to InformationWeek in August, Strout indicated the price hike would've been more painful had ASUG not stepped in. "SAP's initial program had it adjust in 2009 to 22%, but ASUG was able to convince SAP that this was not in the best interest of our members," Strout wrote.

Strout, formerly CIO at Morris Communications, became ASUG's first full-time employee when he took on the CEO/president role in August 2007. The ASUG president job was previously a part-time gig, held by people who worked as CIOs in their day jobs. Strout could not be reached for comment Wednesday.

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