Monday, April 16, 2007
SAP license negotiations: Beware of shelfware
SAP license negotiations: Beware of shelfware: "Having unused software around may not seem like a big deal, especially if it was obtained at a deep discount, but it can end up costing a customer in other ways. One major hit can be maintenance and support, Disbrow explained. This generally costs 15-17% of the discounted software price per year -- whether the product is used or not.
SAP's CRM modules in particular have come under scrutiny in recent years, with SAP claiming market leadership based on license revenue and Oracle responding that SAP CRM amounts to shelfware at its customer sites. It's not easy to negotiate these fees based on whether the product is used, either.
'SAP takes a pretty hard line on this,' Disbrow said. 'They say, 'We gave you this discount based on the total amount of money you were spending, and we won't reduce your maintenance and support because you're not using these modules.''
The risks associated with SAP license negotiation don't end with shelfware. Other problems that may pop up surround terms that aren't included in a contract. Disbrow called these 'missing terms and conditions' and said they often have the potential to wreak havoc on a deal. "
SAP's CRM modules in particular have come under scrutiny in recent years, with SAP claiming market leadership based on license revenue and Oracle responding that SAP CRM amounts to shelfware at its customer sites. It's not easy to negotiate these fees based on whether the product is used, either.
'SAP takes a pretty hard line on this,' Disbrow said. 'They say, 'We gave you this discount based on the total amount of money you were spending, and we won't reduce your maintenance and support because you're not using these modules.''
The risks associated with SAP license negotiation don't end with shelfware. Other problems that may pop up surround terms that aren't included in a contract. Disbrow called these 'missing terms and conditions' and said they often have the potential to wreak havoc on a deal. "
