SAP Delays Support Price Increase

The company is waiting until early 2010 to incorporate customers' feedback as it looks to raise its annual maintenance fees.
SAP, which angered many customers this year by announcing plans to increase support pricing, said Tuesday that it would delay a decision on any changes until early 2010.

In the meantime, the business software maker will await the findings of a SAP task force that has been talking to customers and user groups to "incorporate their feedback in order to maximize customer value from SAP's entire support offerings."

"SAP plans to provide the outcomes of the task force the beginning of 2010," the company said in a statement. "Until then, a decision on pricing for Enterprise Support has therefore been postponed."

In an interview with InformationWeek in January, Bill McDermott, president of global field operations at SAP, said the company planned to move all of its customers to a 22% annual maintenance fee by 2012. The plan represented a 30% boost and matched the percentage charged by rival Oracle.

The annual maintenance fee is a percentage of the original cost to license the software. McDermott said the hike was needed to cover rising costs from customers who have a myriad of custom and integrated software systems, all of which must work in harmony with SAP's core systems. "Customers expect us to help solve the problems that are very often taking place in [non-SAP] applications," he said.

On Tuesday, SAP softened its original position. "With this (delay), SAP once again demonstrates that it takes the concerns of its customers seriously and also recognizes the ongoing pressures bearing down on IT budgets in the current economic environment," the company said.

Annual maintenance fees charged by software vendors are a growing area of discontent among CIOs, who believe the maturation of the software industry should mean lower, not higher, software bills. Instead, the model of one-time licenses and ongoing maintenance fees remains strong across enterprise software segments.