SAP user group foments revolt over massive price hike

The UK SAP user group today called on the German software giant's customers to scrutinise plans to force them to cough up almost a third more for their contract. The group wants companies affected to examine the changes in detail in the hope they'll be unhappy enough about a real-terms 30 per cent costs increase to kick up a …

[James]

Of course ...

.. the other interpretation is that SAP has become "top heavy" and needs to find a way of financing it's fleet of directors.

A good software product should (in theory) require very little in the way of support beyond initial training. If it needs constant calls to help and support desks then there is something seriously wrong with it's design! (Just think how often you've phoned your Fridge manufacturer in the past year for "support" - that's how software should be!). (Says he, hoping that you haven't got a Windows driven fridge!).

Paris - top heavy - geddit ? Ah well, please yourselves...

[Edwin]

SAP is clever

They've done the math:

How much more will our customers be willing to pay before they would rather endure the pain & suffering of swapping ERP solutions.

[Anonymous Coward]

I've deal with those incompetent f**kers in SAP support before,...

how much does it cost to say "Add more memory" to any performance-related support call?

[Anonymous Coward]

A way to lessen the pain ...

While SAP's prices are indeed steep, who shafts your company more: SAP through their support and licensing contract, or the "value added reseller" who wants 800 quid per developer-day to develop a piece of sh*t software?

Mine saw the light and got me SAP certified, so at least we don't have to pay others to develop sh*t which can be developed in-house for (almost) free (the software, not the sh*t ;)

Hmm now where did I leave that glossy paper reading SAP Certified Development Consultant?

[Tony]

@Edwin

In reality, the people that pay the bill are not going to change over just because the support price has gone up by 5% in a year. If SAP then decide to hike it again by another 5% in say 3 years time, it still won't cause sufficient pain. They could probably slap another 5% every other year for the next 10 years, and all that will likely happen is that people huff and puff, but still stump up the cash.

In our case, the cost of purchase / installation has already exceeded the original quoted price (which I said was wrong anyway) by 25% - it will be almost 45% over budget by the time we go live. They said they would provide 4 consultants to get it up and running; I've just provided access for the 24th consultant. Oh and they said it would be live the first week of August - Not a chance as we are at least 3 months behind schedule. I'm betting it won't happen until Jan 09 and even that is a long shot.

They've been working on it now for 10 months and they still cannot demonstrate it working fully from one end to the other - bits in between are OK but not all of it. And whereas it was all supposed to happen in one go, several months ago they started talking about "phase 1" / "phase 2" / "phase 3". Got to make sure those consultants have plenty of work in the future.

If you buy SAP, you had better make sure that you have a full chequebook - and be prepared to write out some very large numbers.

[Anonymous Coward]

This is a childish play

Oracle just hiked the prices for E-Business Suite HRMS licenses more than 300%.

[yeah, right.]

sounds about right

Step one: sell a product at a decent price such that people don't look too closely at the real pitfalls to buying that product.

step two: make sure customers become dependent on said product, while making sure that they are still dependent on company for support. Do this by making the product so insanely complex and poorly designed they'll have to call for help if something goes wrong.

step three: jack up prices to just under the level that it would cost for businesses to switch applications. Screw the businesses who have become dependent on you, your profit is much more important than their bottom line.

step four: watch a competitor come in with step one.

[Ian Michael Gumby]

SAP will do what SAP wants.

Listen to their users?

If they did that, then they would still continue to support Informix (Now IBM's IDS) on their new releases of software.

[Anonymous Coward]

SAP is a great bit of, off the shelf software

If you are fool enough to be suckered into an off the shelf software solution then hey, you get what you pay for :)

Accounting systems of large corps should be bespoke, and fully bespoke, the reason is it is not hard to get it right, and having the flexibility all the way through, is the thing that will give you the edge.

I have seen too many corp systems, that are off the shelf solutions, and they never work, they just force people to work with them, which is just the wrong way to do things.

Developers should be business analysts and coders, most are, tap the talent and watch how your company performs well.

[Edwin]

@Tony

<grin>

I'm not convinced it's SAP-specific though.

What all consulting divisions (SAP's included) seem to fail to grasp is the ability to make a realistic estimate of the effort to do an ERP implementation.

That said - in my experience roadmap slippage is typically due to three things (my experience):

- Crap due diligence on both sides

- Scope creep

- Blatant lies (or stupendous cluelessness) by the sales folk

Surprisingly (for the more cynical among us) the third item is the smallest of the three influences.

[sap_basis_chap]

Bloatware cost

I used to work for SAP in the days when they first tried to force people to use Solution Manager. This was aimed at lowering their support costs. That went wrog for them.

Now they have succeeded in forcing people to use Solution Manager and it is getting worse. This huge piece of over complicated bloatware takes weeks to set up an maintenance is significant. The over 'rich' functionality including 3rd party software is clearly costing them a lot to maintain and they need to pass this cost on. I imagine it is so they can lower their support costs.

It is so bad they their alternative products that are streamlined and fast are being phased out to force people to use this product more and more. I see many custoemrs suffering with this product, especially when it comes to costs vs value

[James Anderson]

SAP is not a package.

SAP is a development environment sold as a package solution.

If it was a pacjkage why would you need all those ABAP programmers and consultants to implment an "industry standard solution".

So with SAP you overpay three times.

Once for the overpriced package.

Once more for the overpriced consultants who know how to use the obscure development tools and flakey ABAP language.

Once again for the overpriced maintenance contracts.

After the recent high profile failures which required reporting on SEC filings at HP and Levis it must be harder and harder for the sales people to sucker CFOs into buying the "package"s.

So SAP are switching to the classic CA "lets shaft them on license and support" business model.

[Anonymous Coward]

Mixed Views

We switched to SAP about a year ago. I like it because it's a hell of a lot better than what we were using before. Case in point... my boss changed something and didn't realize it logged his name, thus clearing me of something I'd been complaining about, tampering with our material lists. Of course it didn't go anywhere, but I didn't have to watch my back with that portion of my job.

On the flip side, the interface for SAP sucks. It was bad enough that we didn't get any real training (telling people to enter x, y or z but not telling them where these values come from is not training), but the way data is set up and managed makes little sense for our business. I'm guessing we have to pay for each of these custom commands to pull up data in a certain way.

I can't really fault SAP entirely, since my company was real cheap on the training side (and waited until after the transition to train most of the staff). We also did the "just enter this >insert alpha-numeric chars< into this field and you part number and that's all you need to do". Nevermind where the stuff came from. They also have been restricting access to supervisors (too expensive to license) so now the lines go down because a material handler can't find the material and the line leader can't double check on their own (because the materials dept. should be correct, something I haven't seen in the past 4 years).

Since we can't go back to the old system (no support and it just sucked), it looks like I'm gonna hear more reasons why the company won't give a decent pay raises (even though we're profitable with an overall growth exceeding 3% yearly... pretty decent considering the economy here in the States).

[John]

Oh Noes!

Profits are down and the Eruo is strong. Lets raise our rates to compensate for crappy sales in an economic downturn. Way to go guys.

[Tony]

@ Edwin

"What all consulting divisions (SAP's included) seem to fail to grasp is the ability to make a realistic estimate of the effort to do an ERP implementation."

Couldn't agree more. Even now after 10 months work, and we are clearly at least 3 months behind schedule, they are still talking about going live in just over a months time - reality seems to have left the building.

I'm convinced that it is simply the way that they operate - set a date, then work backwards to establish a timetable. When you don't hit the milestones, just ignore them and keep talking about the original date. When it then goes pear shaped, blame it on the customer and charge extra for "fixing" the problems.

Oh, and I've just been told that there are 2 more new consultants coming in tomorrow - forget any plans that I have for any work, I have to be available to help them do whatever it is they are supposed to be doing (no, I haven't actually been told what it is!)