SAP Braces For Change

New sole-CEO Leo Apotheker wants the enterprise-software powerhouse to be more responsive to customers.
SAP also will deliver new hosted services with ties to its core SAP Business Suite on-premises software. Among the technologies that will help SAP do that are assets acquired from cloud platform provider Coghead earlier this year. SAP sees itself helping customers manage cloud services transactions. For example, all of Apple's iTunes orders are processed by an SAP system, as are 8 million transactions per hour from Deutsche Postbank's online banking Web site.

And don't be surprised to see SAP software running on other clouds and hosting services. Sanjog Gad, SAP's senior VP of advanced technology, is working on getting SAP software to run on Microsoft's Windows Azure platform. What's more, Sikka said many companies already develop and test their SAP implementations on Amazon Web Services before deploying them in their own data centers.

Will Apotheker make a difference? The fresh thinking toward maintenance costs is a step forward. For users not already paying an annual rate of 22% of the license cost for enterprise support, SAP plans to gradually raise them to that rate -- but only if 100 test customers see a 30% improvement in areas such as total cost of ownership with SAP's enterprise support offering, based on key performance indicators established by a third party.

Competitor Oracle would never devise a conditions-based maintenance increase, said Bill McDermott, SAP's president of global field operations. "They can't do it because they have a different business model," he said. "If you listen to [Oracle CFO] Safra Catz, you hear her say Oracle is doing so well because maintenance fees are liquid gold for them. It's liquid gold until a customer says, 'What can SAP do? Let's give SAP a call to see if they can do better.'"

SAP customers generally see the effort as positive. "I will give SAP a ton of credit, because they listened to the feedback of their customers," Dow Corning CIO Abbe Mulders said. "Enterprise support has been a very controversial issue over the last year, but SAP didn't have to put those metrics in place. No one else in the industry today has any kind of measures on maintenance dollars."

That optimism was tempered with skepticism. Some CIOs questioned the quantitative success of benchmarks on such things as total cost of ownership. It's up to Apotheker and the rest of SAP to win them over.

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