End of the Year for SAP – What You Need to Know
Author: Steven Zolman
Planning ahead with tech suppliers can be daunting and time consuming, especially if you don’t rely on the suppliers themselves and the consultant firms that take money from them for all your information. For many however, escaping from the Technology Cartel is difficult.
Back in May, we wrote about:
- Oracle – Fiscal year ended May, and often the renewal cycle is the best time to change terms
- Microsoft – Fiscal year ended June, biggest month for license renewals and new license deals
- Cisco – Fiscal year ended July, best time of year to review Cisco estate for M&S optimization and more
And now – its SAP’s turn – fiscal year ending December. Here is reprint of what we said in May – and remember, its never too late to do something!
It’s hard to hear I’m sure, but our view is if you are paying any maintenance at all to SAP…you are over-paying. Due to SAP’s desires to (i) migrate its customers to the cloud, (ii) cut into the highly profitable database space of its chief rival (Oracle), and (iii) deliver an integrated solution that also captures more customer wallet share from providers like Microsoft and IBM. SAP has been aggressively promoting its own “in-memory” database solution (called Hana), and has been encouraging its customers to upgrade to the next version of its software, SAP Business Suite 4 (S/4), which runs on Hana (and no other Database); commonly referred to as S/4 Hana. The challenge with S/4, is that it’s another code base change, similar to what we saw with R/3. SAP has been positioning S/4 as “free” to Hana customers for a limited time basis. If not handled appropriately, however, this “free” solution could prove to be the most expensive SAP software ever sourced by a client organization. Many customers considering their options will unknowingly sacrifice huge savings opportunities by following traditional migration paths, but enormous savings are achievable with the advanced strategic assistance of NET(net).
This is a huge market vulnerability for SAP, but don’t take our word for it; SAP Chairman to the Executive Board Hasso Plattner says, “If this doesn’t work, we’re dead. Dead in the water”. With so much riding on this action by SAP, clients have an unprecedented opportunity to control the bargaining table and ensure commercial and contractual terms are highly market optimized. NET(net) is your partner in this effort. As a result of this upgrade and this new code base, the majority of SAP software investments are being directed towards S/4, and therefore, your maintenance service and support dollars are not going in large quantities to deliver further innovations for you, and most of the SAP deployments we have seen that do not have short term plans to upgrade to S/4 are highly stable, and thus the support investments you are making are doubly inflated. The SAP maintenance business model is now officially broken, and with a little information about your environment and plan, we can show you how much you can save by considering alternative approaches. Clients we have worked with recently have been experiencing savings of 20-80%.
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