SAP to increase support fees in January to offset inflation costs

Maintenance and software installation prices heading north for range of agreements

SAP is upping the price of support fees for a raft of agreements to offset the rising cost of doing business, it confirmed to The Register.

“Today’s macroeconomic environment of high inflation rates reflected across regional price indices is broadly impacting companies around the globe,” a spokesperson for the German enterprise application giant told us via email.

“SAP is not exempt from these developments and they are steadily impacting our offerings through higher energy and labor costs, as well as increasing expenses for third-party services,” they added.

The proposal is to “adjust” the support fee for existing support agreements for SAP Standard Support, SAP Enterprise Support, and SAP Product Support for Large Enterprise, “based on the respective local Consumer Price Index.”

In line with standard business practice, the terms of SAP’s agreement lets the company make an annual adjustment of the support fee for the initial term and first renewal terms.

“Consistent with the terms of our agreements, SAP will moderately increase the annual support fee for the aforementioned SAP support agreements by a maximum of 3.3 percent (or the local CPI rate, if lower), effective January 1, 2023,” SAP said.

SAP pointed out that it had resisted increasing the price for maintenance and support installations for a decade, including during the pandemic, when numerous other vendors including Microsoft, HPE, Cisco and other upped hardware prices. Oracle raised support fees in July.

“This upcoming increase denotes the first time in nearly a decade that SAP has adjusted fees as we have kept support offering prices stable to a large extent for the last ten years, including waiving adjustments throughout the pandemic during 2021 and 2022,” the spokesperson told us.

“The increase does not represent an increase in list prices for SAP support offerings for new purchases of software. Affected customers and partners will be notified in accordance with the respective locally agreed contractual stipulations.”

The S/4 Hana developer says it is talking to customers and user groups to provide the requisite support services for them, adding: “Transparency is important.”

“Each customer has a unique, commercial relationship with SAP, and landscapes and requirements are different. The respective SAP account teams or local SAP account executives are available to answer any questions customers might have,” they added.

For more information, customers can go here.

SAP last week hired former Airbus CFO Dominik Asam to replace outgoing beancounter Luca Music. Asam previously worked in senior finance roles at Goldman Sachs, Siemens and Infineon. No doubt someone will have already worked out the likely consequences to support revenues before the new CFO arrives.

We have asked analysts and SAP user groups to comment. ®

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