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SAP To Migrate Customers To More Expensive Support Service

The software company plans to move customers from their current agreements to the new service's pricing model of 22% of license fees by 2012.
SAP on Wednesday said it would transition its customers to its recently released -- and more expensive -- Enterprise Support service as of Jan. 1, 2009.

Over the last six months, more than 350 customers have signed up for the new service, which the business application maker calls its "next generation" of support. As part of the transition, some SAP customers will be able to take advantage of some of the additional services available with Enterprise Support at no additional cost. Graduated pricing would begin in January.

Enterprise Support replaces the company's previous Standard Support and Premium Support offerings. The new service provides a 24/7 service level agreement, continuous quality checks, advisories, and help in implementing enhancement packages for SAP software.

SAP says changes were needed because older support models no longer meet the needs of the current business environment, which includes a growing number of networked companies and adoption of service-oriented architectures that turn software functionality into Web services offered inside and outside an organization. As a result, support packages need to go beyond bug fixes and upgrades to provide a "holistic offering" that also looks for ways to improve software-driven business processes to optimize a company's overall operations, the vendor said.

SAP plans to implement a graduated pricing program with Enterprise Support that incrementally moves customers from their current agreements to the new service's pricing model of 22% of license fees by 2012. For example, a customer paying 17% for Standard Support in 2008 will pay a rate of 18.3% in 2009.

Pricing changes for companies that signed support contracts before July 1, 2008, may differ, depending on the contractual terms and conditions.

In recognition of the impact software-as-a-service companies like Salesforce.com has had on its on-premise software, SAP in May announced what it called "services by design," which consists of online components that integrate with the company's on-site software. Such new offerings also contributed to the need for new support programs.

The first online offering will be an online tool for companies to select and manage suppliers, integrating with their on-site supply chain or enterprise resource planning software. It's the same model Microsoft is pushing as software plus services, though, like SAP, most of Microsoft's product offerings are still in the planning stages.

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