With Siemens asking for and apparently getting a huge break on SAP maintenance costs, it is time to take a look once again to take a look at the whole issue. Understandably, there is a lot of emotion and name-calling and confusion around this; it’s not quite the health-care debate here in the United States, but the real issues have been buried under rhetoric in a strikingly similar way.
SAP Charges for Improved Support
Let me first state SAP’s position as sympathetically as possible. SAP believes (quite correctly) that the customer’s TCO (total cost of ownership) ought to go down, as software and hardware gets better and cheaper. It also believes that if it does something that would help TCO go down, it should get a share of the benefits.
Who would disagree with either point?
Roughly two years ago, therefore, it introduced a series of software and support improvements that it believed would indeed reduce TCO. These improvements largely revolved around a newly improved version of the Solution Manager, a piece of software that is supposed to do what its name implies.
The Solution Manager (or Sol Man, as it is called familiarly) was actually introduced roughly ten years ago. In its original version, it was a separate piece of software (one that ran on its own Windows box) that one used to communicate with SAP support (filing bug reports, etc.) and to monitor the performance of your SAP installation.
In the version introduced two years ago, the Sol Man EE (or enterprise edition), it did considerably more: it allowed you to do more extensive monitoring, test and manage upgrades, and even document your business processes. This new edition also beefed up the connectivity with SAP Support, so that support could use it to troubleshoot your installation more rapidly and effectively.
When SAP introduced its new, higher-priced Enterprise Edition support package, it placed the Solution Manager EE front and center. In every speech and every press release, it wasn’t, “We’re raising prices because Oracle got away with it.” It was, “We’ve developed new tools and support services based on those tools, and we’re increasing the cost of maintenance, because the maintenance has improved.”
The tools it was referring to were the various components of the Sol Man EE, and the improved support services were made possible by and delivered through the Sol Man.
To sum up, SAP’s position is that it is improving enterprise support by providing customers with new and better support tools. It is in the software business. So it is only reasonable for it to charge for those tools. That it charges via a maintenance price increase rather than by charging for the product itself is reasonable, presumably, because many of the benefits involve improved services, which are provided through the maintenance contract.
The Customer Reaction
It’s just a plain fact, of course, that nobody paid much attention to this. It took me, for instance, almost a year (until John Krakowski’s excellent presentation at ASUG last May) to figure out what SAP was getting at when it talked about new tools. (Before that, I wrongly, but honestly believed that the talk about tools was pure hand-waving.)
Other commentators on this, like Vinnie Mirchandani or Ray Wang or Dennis Howlett , may have gotten to a proper understanding of the argument faster than I did, but for the most part, they didn’t try to address its merits.
Today, for instance, the Enterprise Advocates, gave a webinar on Reducing SAP Maintenance Costs. (The Enterprise Advocates include the aforementioned three, plus Frank Scavo and Oliver Marks.) Not once during the main body of the talk did they even mention SAP’s recommendation for reducing maintenance support costs, which is to implement the Solution Manager and use it.
I don’t blame the advocates for this; it’s not their job. But I do blame SAP. If the Sol Man is what justifies the price increase, then SAP need to explain this in clear language.
Once SAP fails to do this, the Advocates and the SAP customer base are entitled to believe what you and I would believe when somebody offers an unclear explanation for something that seems to require some explanation: they dismiss the explanation that’s offered.
At some point, though, it does seem that someone should give SAP the benefit of the doubt and ask the question that SAP wants you to ask, namely, “Can the Sol Man EE deliver so much benefit that it justifies the maintenance price increase?”
If the answer is, “Yes,” that would of course be the best thing all around. Customers would have a clear path to reducing maintenance costs. SAP would have a product that keeps its customers paying maintenance. Total cost of ownership would go down.
And the Answer Is…?
Over the past four months, I’ve spent a fair amount of time finding out what I could about the Sol Man. I don’t have access to the documentation (all 1000 pages of it), but I do have the more public documents that SAP has issued, and I have talked to a number of Sol Man users and consultants.
What I found out is so complicated, and this blog is already too long. So I’ll delay a full report to another post. But here’s the answer in a nutshell:
1. To get the benefits of the Sol Man absolutely requires significant investment on the part of the customer.
2. It does not appear to be the case that the Sol Man was designed with the goal that SAP now has for it top of mind. It appears to be a product that was designed to be one thing that is now being turned to a different purpose.
3. The areas of benefit that the Sol Man promises are indeed important, and it is at least possible that customers can get significant benefit from it, if they put in the work.
4. At the end of the day, though, it appears to this humble observer that SAP needs to put more skin in the game.
Hope all this whets your appetite for the next post on the subject.
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