SAP users not happy about German giant's price rises
Issues remain in the costs for development and quality assurance in the cloud
Nearly half of SAP users in its German-speaking heartlands are either dissatisfied or very dissatisfied with the software giant’s cloud pricing strategy, according to the latest survey.
DSAG, the SAP user group with members in Germany, Austria and Switzerland, surveyed organizations to find 32 percent were dissatisfied with SAP’s cloud prices strategy while 17 percent were "very dissatisfied" with the move.
SAP has said it would be applying a 3.3 percent price increase for services, including for cloud services that have been put into maintenance mode or discontinued, DSAG said.
"Almost half of the respondents do not like SAP's pricing policy. But I see this as a fundamental problem that customer companies have with all providers of cloud solutions," said DSAG chairman Jens Hungershausen.
Nonetheless, he said the planned annual price increase for SAP cloud services had caused a lot of criticism among DSAG members. “We are convinced that reliable mechanisms for price development are needed. This is another reason why these values are like an echo of a reaction from SAP customers already shown last year. A recurring annual increase in prices makes it more difficult for companies to move to the cloud.”
During the DSAG keynote at the 2023 Technology Days, the interest group called on SAP to refrain from its price increases. “If customers are asked to pay even more for cloud solutions that have already been discontinued or are no longer maintained, this creates a negative impression of the manufacturer – and from DSAG’s point of view, that cannot be SAP’s goal," Hungershausen said.
In the survey, DSAG found that spending on its latest generation of ERP technology — S/4HANA, first introduced in 2015 — was a relevant for high levels of investment for 28 percent of users, and medium levels for 39 percent, both increasing on last year. However, the earlier generation of ERP, called Business Suite but often referred to as ECC, is also seeing an increase in investment focus. Six percent of survey respondents saw it as relevant to high investment plans, while 22 percent saw it as relevant to medium investment plans, the latter up from 18 percent last year.
Mainstream support for Business Suite is set to end in 2027, with extended support available until 2030. "[It] still sounds far away. Nevertheless, the effort involved in such a migration should not be underestimated. Companies need strong partners with sufficient resources at their side," said Hungershausen.
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Since January 2021, SAP has been pursuing a strategy to accelerate its customers migration to the cloud. Application development in the cloud is centred on SAP’s Business Technology Platform.
In DSAG’s membership survey, 24 percent said they were making high and medium investments in the SAP Business Technology Platform (BTP).
In its survey commentary, DSAG said it was positive that the first migration services are being developed to support the conversion of existing integration architectures to BTP’s Integration Suite. However, it said issues remained in the costs for development, quality assurance and use of the services without productive reference. It said it was in discussion with SAP to address these issues.
Earlier this month, the German-speaking user group issued a statement calling on SAP to introduce new features in its flagship ERP system on-prem as well as in the cloud.
Later, DSAG board member Sebastian Westphal told The Register concerns remained about the environment for managing the release of software in the cloud, together with the tooling used for managing operational cloud software.
An SAP spokesperson told The Register: "Our customers can be sure that we take their needs into account when making strategic decisions and want to ensure planning security. For this reason, close exchange with DSAG and its members is a particular concern for us."
In a statement sent to The Register, SAP said:
"SAP is engaged in an open dialogue with our customers and user groups to offer the right support offerings for their needs, at predictable commercial conditions. Transparency is important for SAP in its relationship with customers, and SAP will always strive to maintain adialogue around important areas such as support.
"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. We are confident that our customers will continue to drive their business outcomes by taking advantage of the distinctive value provided by their SAP support offering." ®