Customers Must Hurry To Address The Mistakes From Shadow IT SaaS/Cloud Adoption Amidst the hey day of the early years for software as a service (SaaS) and Cloud, many line of business executives signed simple month to month, user based contracts without the burdens of IT and scrutiny of vendor procurement.  These edge applications and […]

Dealing With Tough Contract Negotiation Scenarios Join me Thursday, September 24th, 2015 from 8 to 10 am PT for a webinar chat that shares best practices in building win-win relationships with Oracle With the experience of negotiating thousands of Oracle contracts, this is an exclusive webinar on building your Oracle relationships. Key topics to be […]

Constellation Sees An Alarming Increase In Inquiries Constellation has received an alarming increase in inquiries about an unethical vendor sales practice coined as “trolling for indirect access”. Indirect access is when a vendor claims that a client is accessing their perpetually licensed software in an unintentional manner or inappropriately licensed manner. One vendor uses a […]

SAP Plans A Standard Support Maintenance Fees Hike Of 5.5%For New Customers For new customers, SAP announced its intent to raise its standard support maintenance fee from 18% to 19% effective July 15, 2013.  The standard support option was reintroduced in January 14, 2010, after much pressure from user groups.  A few key takeaways: Price […]

Thank You For Your Support SoftwareInsider.org generated almost 10 million page views in 2012 (see Figure 1).  This does not include syndication through Constellation Research, Forbes (discontinued in 2012), Enterprise Irregulars, Computerworld UK, and other great media partners. Figure 1.  Software Insider Achieved 9.8M Page Views for 2012 Classic Posts Address The Key Fundamentals In […]

The Real Deadline To Consider Third Party SAP Maintenance Is September 30th In conversations with hundreds of SAP customers, many have not realized that they must act now in the next 30 to 45 days if they want to move off of SAP customer specific maintenance from extended maintenance for older products. Despite the support […]

Versytec Acquisition Addresses Growing Demand For JD Edwards Support Denver, Colorado based Spinnaker Management announced on March 6th, 2012 its acquisition of competitor Versytec.  For those who remember their third party maintenance (3PM) history, Versytec was among the first firms to announce third-party maintenance services within a year after PeopleSoft acquired JD Edwards in July […]

Forward And Commentary Software ownership costs continue to escalate as vendors accelerate their efforts to capture support and maintenance revenues. Some vendors have gone to the extreme to eliminate third-party options for their customers. This best practices report examines three strategies to free up unnecessary costs to fund innovation and new projects. A. Introduction On […]

Business Leaders Often Poorly Prepared For Cloud/SaaS Contract Negotiations Business leaders often take great care in building their Cloud and SaaS strategy, only to have many of the benefits of flexibility and agility hampered by overlooking details in their cloud contracts.   In conversations with over 200 cloud customers in 2011, key reasons include: A […]

Keeping Up With The Latest In Microsoft Licensing Given the vast array of Microsoft products and licensing categories, an organization may often feel overwhelmed by Microsoft’s policies.  While there may be some complexity, these series of posts are designed to provide up to date commentary and analysis on new programs as they become available.  Feel […]

Organizations Report Increase In Software Licensing Audits Across the board, the largest complaints about software vendors and their business practices have come from increasingly aggressive software auditing practices.  Once thought to be a small possibility, the software vendors now wield this big stick to drive up sales and of course ensure compliance.  Given the 32 […]

Organizations Seek Measurable Results In Disruptive Tech, Next Gen Business, And Legacy Optimization Projects For 2011 Credits: Hugh MacLeod Enterprise leaders seek pragmatic, creative, and disruptive solutions that achieve both profitability and market differentiation.  Cutting through the hype and buzz of the latest consumer tech innovations and disruptive technologies, Constellation Research expects business value to […]

Themes In 2010 Reflected The Buy Side Demand For Both Optimization and Innovation Technology buyers in 2010 focused most of their priorities on finding cost savings through legacy optimization, navigating a flurry of disruptive technologies, and designing/experimenting with new business model innovations.  Consequently, the top 25 posts for 2010 reflected these 3 major themes: Legacy […]

Annual Evaluation On SaaS Satisfaction Begins This Fall The Software Insider Insights™ solution evaluation and buyer comparison tool will launch this Fall.  The first report focuses on Customer Centric Cloud Agreements – Software-as-a-Service (SaaS).  This evaluation will: Identify the leading seller/vendors delivering SaaS based applications that adhere to the spirit of the cloud Evaluate seller/vendors […]

Keeping Up With The Latest In Microsoft Licensing Given the vast array of Microsoft products and licensing categories, an organization may often feel overwhelmed by Microsoft’s policies.  While there may be some complexity, these series of posts are designed to provide up to date commentary and analysis on new programs as they become available.  Feel […]

Welcome To The First Of A Series Of Posts On Microsoft Licensing Updates. Given the vast array of Microsoft products and licensing categories, an organization may often feel overwhelmed by Microsoft’s policies.  While there may be some complexity, these series of posts are designed to provide up to date commentary and analysis on new programs […]

Four Common Customer Scenarios Will Trigger Vendors To Raise The Back Maintenance Fee Discussion Back maintenance fees describe the amount an organization would have paid for maintenance if they would have continued to pay the usual stream required to access support, bug fixes, patches, and upgrade rights.  As economic conditions have worsened, many organizations have […]

Who Says Support Has To Be Bundled With Maintenance? About a decade back, vendors would offer support and maintenance as two separate line items on their contracts.  Support would run about 5 to 10% the license fee and so would maintenance.  Keep in mind, average support and maintenance fees were under 15% back then.  Here’s […]

Apps Users Seek Third Party Maintenance For Cost, Value, and Service Updated surveys from inquiries, client conversations, and user group meetings show a 113.8% increase in interest in third party maintenance (3PM) services from Q3 2009 to Q1 2010 (see Figure 1).  Key factors stem from (see Figure 2.): Continuing cost pressures. Budgets continue to […]

Standard Support Returns After Much Deliberation

SAP announced today that they would be reintroducing their Standard Support offering. Customers now gain choice with a 2-tier maintenance offering. Here are the details between standard support and enterprise support.

* Standard Support Offering reintroduces at 18%. Customers seeking core bug fixes, support packages, risk mitigation, and related new functionality will have choice in staying on standard support. The program is designed for customers who seek to keep their systems up and running. Customers with CPI clauses in their contracts will want to take note – the first set of consumer price index (CPI) price increases will begin January 1st, 2012.
* Enterprise Support remains at 22%. SAP will continue to offer Enterprise Support at 22% for new customers and a ramp up for existing customers (see Figure 1). Enterprise support includes features such as best practices for IT operations, proactive monitoring and reporting, and transparency for business process performance. Customers who choose to go with Enterprise Support prior to March 15th, 2010 will be eligible for ramp up.
* Supplemental offerings still available. Other programs such as Max Attention, Safeguarding, and Product Support for Large Enterprises (PSLE) will continue to be available by choice and invitation.

High Cost Of Ownership And Changing Requirements Drive SAP Users To Seek Optimization Solutions

As users await SAP to regain its mojo (see Dennis Howlett’s post) and implement it’s “Voice of the Customer” strategy in 2010, users must continue to reduce their cost of ownership and complexity. In addition, rapidly changing business requirements require some users to seek SaaS alternatives, additional point solutions, and extensions.
Consequently, vendors providing SAP optimization and extension solutions represent one of the fastest growing parts of the $78.7B (2009 Altimeter Group estimate), 850,000 SAP service partner and developer ecosystem. SAP users already embrace many of the solutions from vendors on this inaugural SAP Optimization List as part of their business value oriented apps strategy. The living list covers seven areas including:

1. application extension and usability;
2. application life cycle management;
3. archiving, storage, and test data management;
4. license management and optimization;
5. Microsoft Office integration;
6. third party maintenance; and
7. virtualization

DSAG project team and project leader departure could signal disagreement with methodology not SUGEN SAP embarked on an ambitious program to prove value in its Enterprise Support fee hike last year.   As planned, SAP should announce the results for the first set of SUGEN KPI’s in early December.  However, two key SUGEN KPI project […]

Connect.  Collaborate.  Innovate. Welcome to the first of many Altimeter Group research reports.  Before you dive deep into the Customer Bill of Rights: Software-as-a-Service report, we wanted to share with you a bit about the research process and how we work within the community. Connect.  We strive to bring new people together and share our […]

This post has been cross posted on the Enterprise Advocates blog A New Way Of Creating Research – Collaborative Input And Review Some time early next week, we (i.e. Altimeter Group’s Jeremiah Owyang and I) will be publishing a Customer Bill of Rights – Software-as-a-Service.  Through the generous input of 57 collaborators and organizations, this […]

Free Software Gimmicks From Some On-Premise Vendors Only Address The License Cost Issue Recently, readers and clients have been approached by on-premise vendors offering free software modules to incentivize new license purchases.  However, free should not be confused with the Open Source (i.e. Freeware) movement, where source code is provided with minimal copyright restrictions.  Free […]

Title: Vendor Event: Soft Summit Location: The Sheraton Palace Hotel, San Francisco, CA Link out: Click here Start Date: 2009-10-21 Start Date: 2009-10-22 Description: What is SoftSummit? Agility and Insight. Profitability Today! “SoftSummit has a great mix of practitioners, looking at licensing from an end-user and a vendor perspective and has a great deal of […]

In the first step of the original seven simple steps to successfully negotiate software contracts, the key is to have the right team in place.  To refresh everyone’s memory from the March 8th, 2004 post the details for Step 1 are: Step 1: Ensure that the right team is in place Inputs:  Organizational chart and […]

Many user groups currently meet the basic requirements… Today’s independent and vendor sponsored user groups serve a key role in building community among a common interest group.  Typical mission and objectives often include: Creating an environment to share information and best practices Exposing issues and limitations with a vendor’s product and partner solutions Soliciting member […]

Declining demand and diminishing output increase the pressure for enterprises to reduce their software license maintenance costs.  As part of a larger enterprise apps strategy, shelfware reduction provides an area for significant cost savings.   However, shelfware reduction is often hard to achieve because many vendors impose: Enterprise wide agreements. These “all you can eat” agreements […]

FORWARD AND COMMENTARY “An Enterprise Software Licensee’s Bill of Rights (LB0R) V2” brings the 10th installment of an on-going series to provide clients with insight on how to better align their packaged apps strategies.  Version 2 of the LBoR updates the original groundbreaking list of 36 best practices for software licensing and pricing and provides […]

Infor announced two new maintenance options for its customers today. These actions represent a proactive approach to provide its customers with new ownership models.  The key offerings include: Flex Upgrade: customers move to the latest application version, no change to existing maintenance and support costs, little or no license fees POV: Support and maintenance fees […]

Oracle President Charles Phillips pleasantly surprised Oracle Applications User Group (OAUG) Collaborate 09 attendees this morning during his keynote with the decision to waive Extended Support fees for a number of product lines through 2010 and 2011. As customers and prospects face one of the worst global economic crises, proactive relief on support and maintenance […]

More details have emerged on the actual 10 or 11 KPI’s that SUGEN and SAP have agreed to as well as the SAP’s targets for showing value.  To start with, here are the main KPI’s for each category: SUGEN KPI’S Business Continuity Increased business solution availability Reduced amount of work related to all SAP incidents […]

Since SAP’s announcement of its single tier Enterprise Support plan last July, customers have continued to express dissatisfaction.   In response to such complaints, the SAP User Group Executive Network (SUGEN) of 12 SAP user groups and SAP have been engaging in discussions around the value derived from this new offering.  This morning SAP and […]

FORWARD AND COMMENTARY “Shape Your Apps Strategy To Reflect New SaaS Licensing and Pricing Trends” represent the seventh report in an on-going series to provide clients with insight on how to better align their packaged apps strategies.  As more and more clients seek SaaS solutions as options to pipe in innovation and potentially control costs, […]

ZDNet Japan Business Applications Conference Bellesalle Yaesu, Tokyo, Japan June 10, 2008  13:00-18:00 R “Ray” Wang Keynote Speech: Insights Into Building A Recession Proof Apps Strategy ZDNet Japan ビジネス・アプリケーション カンファレンス 不況だからって、アプリケーションを止められますか？ いうまでもなく、不況です。不況はITコストの削減を生みます。しかし、いまや、ITは止められないばかりか、進化を続けなければなりません。 企業は情報システムへの投資をこれまで通り続けられない状況にあります。こうした状況においてこそ、情報システムを真剣に考え直すべきです。本イベントでは、そのなかでも、最もビジネスに近い層であるビジネスアプリケーションについて議論します。 小さく導入したアプリケーションを統制・連携するためのアーキテクチャーとしてはSOA、ビジネスの効率化をITに実装するためのBPM、所有から使用への新たな選択肢として脚光を浴びるSaaS…… 不況下でも企業が情報システムにできることはたくさんあるのです。 » 来場事前登録はこちら 開催概要 名称 ZDNet Japan ビジネス・アプリケーション カンファレンス 開催日時 2009年6月10日（水）  12:30開場  13:00開演 場所 ベルサール八重洲 [会場について] 参加費 無料（事前登録制） 定員 300人 対象 CIO（情報に関する資源の統括、戦略立案、実行する責任者の方）／IT部門のマネージャ／業務でERP、CRM等アプリケーションに携わる方 特典 「来場者アンケート」にご回答いただいた方にQuoカードをプレゼントいたします。 […]

Recession creates an opportunity for frank vendor – client discussion A fine equilibrium exists between the vendor’s success and a client’s success.  Its time for the enterprise software industry to have a frank and honest conversation about software costs and vendor business models. To date, comparing cost among different vendors remains difficult as license, maintenance, […]

Maintenance costs represent a major part of the software budget and the largest growing source of revenue for software vendors.   In fact, an aggregation of the past four quarters of software vendor financial results definitively demonstrates double digit declines in new license revenue, even more exacerbated by the evils of currency flux from the […]

A common question asked by readers of this blog is when should vendor contract negotiations be led by a domain expert and when should this be led by a procurement professional?  As the complexity of the technology topology increases, expect a multitude of domain experts in roles such as application specialists, business process experts, enterprise […]

Now’s The Time To Assert Your Rights With the market now in favor of the enterprise software licensee, its now time to update the Enterprise Software Licensee’s Bill of Rights to include newer topics such as virtualization, SaaS and subscription pricing, newer usage based pricing models, open source, and vendor lock-in avoidance.  As mentioned in […]

In several contract negotiation support calls this month, clients have discovered interesting language in their contracts designed to prevent them from choosing a third party maintenance option.  The language is often buried deep into the legalese and many unsuspecting clients may sign without understanding the future implications in the software ownership life cycle and the […]

Vendors Find New Ways To Limit Access to Third Party Advisers Conversations over the past 3 months with clients about their software contracts highlight some egregious licenses practices by software vendors.  Here are some examples of gag rules that some vendors have recently attempted and successfully put into contracts: Limits on third party negotiation support.  […]

FORWARD AND COMMENTARY The five steps to building a recession proof packaged apps strategy represent the sixth report in an on-going series to provide clients with insight on how to better align their packaged apps strategies.  Aligned with operational efficiency and regulatory compliance business drivers, these best practices provide a road map for more efficient […]

Software Ownership Remains Unusual, Onerous, and Restrictive Software licenses are truly unique.  Licensee’s can not resell, reuse, or share their licenses with others. For example, enterprises easily reuse, resell, or share tangible assets such as hardware, telecom equipment, and storage. From both a replacement and life-cycle perspective, leases for assets such as telecom equipment incorporate […]

In both the enterprise and SMB space, recent market conditions point to a lack of available financing for enterprise software purchases.  This trend will continue as the credit markets tighten.  The result – vendors will be more inclined to discount.  Enterprises engaged in contact negotiation with software vendors should take this opportunity to seek additional […]

Margin Pressures Drive Maintenance Fee Increases Announced at the 2008 Field Kick Off Meeting (FKOM), the elimination of the Standard and Premium support offerings was originally developed just for new customers. However, today’s announcement that existing customers will be “transitioned” to Enterprise Support as of January 1, 2009 will come as an unpleasant surprise to […]

You are reading a post originally published on March 1, 2004 from an older blog on the old www.raywang.org site.

You are reading a post originally published on March 1, 2004 from an older blog on the old www.raywang.org site.

You are reading a post originally published on March 1, 2004 from an older blog on the old www.raywang.org site.