There has been a lot of buzz lately about Siemens decision to stop SAP maintenance and I think also a lot of confusion and misinformation. I have had some conversations with two of our clients over the past week on what some of this means so I thought I would throw myself out on a limb and try and explain some of what is being discussed and what it means. Note that Siemens intentions have not been confirmed, the initial buzz was based on one website article in Germany which as I understood was mis translated, so it is not confirmed that Siemens has terminated maintenance only that they are considering it. This could just be a negotiating ploy on their part for all we know, so I won’t muddy the waters by speculating what they are doing, but let me say this. There are SAP customers that are off maintenance, I have no idea how many as I am certain SAP and everyone else involved would not want the word to get out, I don’t believe Rimini street is publicizing who their customers are either for the same reasons. Of course none would be as high profile as Siemens if they do go that route. I heard at one point that they were SAP’s largest customer so that is why there is so much interest.
A little bit of background on what maintenance is
To cut through some of the noise out there especially misinformation let me first explain what maintenance is and isn’t. When you purchase a software application you are given the option (note that this is an option not a requirement) to buy maintenance (some vendors call them subscriptions) what this includes is access to upgrades during the maintenance period and potentially some extras thrown in. To be even clearer this does not include normal application support, an IT manager I talked with recently over coffee told me he would never cancel SAP maintenance because if they ran into an emergency where they could not get their SAP system working say after a backup failure or power outage he would need access to SAP to get up and running quickly, I explained to him that this would not help, sure he could submit a service marketplace ticket in case it’s related to a software bug (doubtful this scenario would occur because of a bug) but otherwise they would need to call either remote consulting support or an external SAP vendor / consulting firm for help, this is not covered under a maintenance agreement. In the scenario painted above the customer would need a support contract with either SAP or a third party support organization and this is a whole separate animal that is not what all the Siemens buzz is about.
Is this what other vendors do?
To provide some comparison let’s compare with Microsoft. Microsoft’s program is called software assurance, it provides you access to all the upgrades that Microsoft releases during your maintenance period (this is usually 1-3 years). You can buy software assurance at the time of purchase but it is not required, albeit your reseller will probably explain to you why there are some benefits to doing so. Microsoft constantly has to battle the perception that their software assurance does not provide any real value, what I mean by this is that if you are on Office 2007 and have no plans on upgrading anytime soon the perception is that you are not getting any value for the payment on software assurance and because of this customers allow maintenance to lapse. To ensure that you don’t think this way, Microsoft sweetens the pot a little by providing you a certain amount of incidents (help desk calls) that you get for free during your software assurance plan and also allows you access to software that is not available if you are not part of the assurance plan. Except for the free incidents you might get though as part of the plan you do not get access to support here either, in case you have a problem say with MS Windows XP you would have to call Microsoft support and pay for support either for the incident or you can of course also buy a support plan from Microsoft, this is a separate payment from maintenance.
So what does SAP maintenance include?
Now on SAP maintenance you get access to upgrades and potentially new software applications (depends on contract terms), also you get access to service marketplace support, now this is where things get tricky, service marketplace is intended for the support of SAP standard application functionality, via service marketplace you can ask for help with a potential bug, if after review they find it to truly be a bug they will fix it and provide you an update you can apply to your system. This is where it ends, when a customer submits a request and asks for assistance with the use of an application or possibly functionality that is not working and SAP deems it is related to config, exits or modifications that you have made, you will receive the dreaded “this is not a support issue please contact your account rep or remote consulting for paid assistance”. I think this trips up a lot of people especially people that are not familiar with the details of their agreement. So what does this mean, this means that your request is beyond what is included in your maintenance. This is what is considered a typical support request.
What I do not know, which is a good question is that if your company cancels maintenance will SAP continue to allow you to submit bug fixes and also receive patches for your particular version of SAP software? It would make sense to me that they would, but since I have not heard specifically I can’t answer the question. If anyone knows please post as a comment for others benefit. I can’t imagine for example that Microsoft would stop providing updates to MS windows unless you were on maintenance, I think there would be an uproar. For additional reading on maintenance in general read Where’s our bumper to bumper warranty.
Filling in the gaps
Because companies are looking to save costs wherever possible there are third party options available, they typically fall into two categories
Maintenance and support companies – These companies replace SAP as your software maintainer, (i.e. Rimini Street) they will provide you with updates to your software version fixes, in general if you are planning on staying with the current version of SAP with no plans to upgrade this might be an option. Note that you are still paying an annual maintenance fee only the fee is significantly reduced from what SAP charges. (Rimini is offering 50% from what SAP charges but I don’t know if this means 11% or 50% of what maintenance used to cost which would be 9 %.) These companies may also offer support as an additional option which would increase the costs.
Third Party support organizations – These companies (i.e. Advanced Solutions) provides support for your SAP system in general, usually they can either supplement or replace your internal SAP support desk. With these companies whether you maintain your maintenance agreement or not with SAP is not relevant, they (we) do not purport to provide patches or updates to the base application. This is the most cost effective option for an organization trying to reduce cost and with the least risk.
I hope this helps to clarify that there is a difference between Maintenance and Support and getting back to point what does this mean in the case of a company like Siemens, In a research we did earlier this year we reported that over the years there has been a increase in the number of customizations in a typical SAP environment (in some cases doubling), I bring this up because one of the recent articles mentioned that the Siemens environment was heavily customized, in this type of environment I would venture to guess that SAP maintenance may not be much help, not only is a heavily customized environment unlikely to be upgraded quickly, support issues are more than likely handled internally. So the risks by eliminating maintenance might be small, the fact is that at 22% maintenance, staying on SAP for a little over 4 years would be a break even period, a company staying on their current platform for say 6 years could theoretically repurchase a SAP license in the final year and show a 32% savings. Of course this is oversimplified (this assumes SAP would be priced the same etc.) but just some food for thought.
My two cents……
BTW the opinions are my own and not necessarily those of my employer.
Phillip Avelar is a Managing partner at Advanced Solutions, based in Chicago. He works with SAP enterprises to optimize their supply chains, increase productivity and challenges the status quo. He shares his passion for solving customers problems in his blog posts, industry articles and conference talks.