Included in the announcement however is an indication that pricing will increase from 17% of contract value to 22% of contract value, immediately applicable to new customers and introduced in a phased way for existing customers. The mandatory nature of this change along with the increase in cost has received hugely negative feedback from our membership to date. In real terms this is a 29.4% increase in costs over the next four years for existing SAP customers, and is proving to be a particularly difficult area to accept. As I have stated before the Enterprise Support product looks good and for organisations needing the extra level of support that it offers it will no doubt provide value. As a user group we understand that if SAP is to provide more comprehensive support then it has to charge more for it. However, many of our members may not want or need this extra level of support and therefore are reacting negatively to having a new support product and the associated increase in costs forced upon them.
In addition, along with the German speaking user group (DSAG) we are sceptical that the Enterprise Support offering is sized appropriately and we remain concerned on its suitability for many small and medium-sized enterprises.
It should also be noted that within the new SAP model a category of large enterprise exists which will not be taking a price increase, although this exception only seems to apply to the very largest of SAPs customers.
We have made and will continue to make representations to senior management within SAP with whom we have regular contact. Further developments will be reported back to our membership in due course. In the interim, Id encourage all organisations impacted by these changes to examine the potential value of the offering and to contact SAP to provide their feedback on this price increase. Id also encourage SAP to reconsider this mandatory price rise so that organisations not requiring the extra level of support provided in Enterprise Support do not have to pay for features they do not require.
SAP UK & Ireland User Group