How to Interpret SAP’s Misleading Support Video

Executive Summary

  • SAP’s created a highly misleading video on support.
  • What is left out is the enormous expense and ineffectiveness of SAP’s support.

 

Introduction

In the previous article such as What to Do About SAP’s Declining Support, we have brought the support issue front and center. SAP has cut support costs to the point where they have 90% margins and most the support personnel work in 3rd-world nations that SAP pays around $25 to $35 per day.

SAP Support Video

This is why it is either sad or amusing (depending upon your perspective) to see support videos like the following from SAP.

This video is simply highly misleading. As a consulting who has often used SAP support, SAP’s underinvestment in support is quite apparent. Secondly, in the video, SAP mentions MaxAttention, but what they leave out is that MaxAttention is even more expensive than the base 22% of license revenue support. And it leads to consultants coming to the client to pitch their services, so it is unclear how it is really supported.

The Enormous Costs of SAP On-Site Support

The costs that are implied in the design towards the end of this video are enormous. It also brings up the question of why so many support personnel would be necessary for SAP, when this support overhead is really not replicated at the vast majority of other software vendors.

Conclusion

Customers should not be confused by this video. SAP support has declined significantly over the past 10 years in particular. And SAP is not giving its support sufficient resources to do the job properly.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
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References

How to Use Outsourced Support to Gain Privacy from SAP

Executive Summary

  • Indirect access is triggered by specific behaviors on the part of the customer.
  • Sharing information with SAP is a double-edged sword is that it opens the customer to more liability.

Introduction

Brightwork Research & Analysis has covered indirect access extensively. It is one of our primary research areas. One of the things we have been researching lately is what tends to trigger indirect access claims. We will cover this topic, and then suggest a possible response to the trigger.

Sharing Information with SAP

And what we have come to learn is that SAP uses specific areas to trigger an indirect access audit. Gartner provided some coverage of indirect access, however, Gartner’s coverage of this topic is restricted by the fact that they probably receive around $100 million every year from SAP. Yet there are still some interesting things to learn from Gartner.

In reviewing the Gartner recommendations on indirect access I noted the following point:

“Proceed carefully. When audited by SAP (or any vendor), share the minimum amount of information required to comply with the audit terms in your contract, as SAP will use information provided regarding third-party interfaces to justify indirect access compliance fees.”

This got me thinking about the following tactics for reducing your risk of an indirect access claim.

  1. Use only internal or contract SAP resources to evaluate your indirect access exposure.
  2. Use a SAM vendor to evaluate your indirect access exposure.

But indirect access basically supports the idea that the less your SAP account executive knows about your use of SAP the better.

This gets into the topic of support. The more that a company uses SAP support, the more SAP knows about how their customers are using their software. However, SAP is the only software vendor that enforces Type 2 indirect access claims. And this is increasing on the part of SAP. SAP produced a misleading announcement on indirect access, which is covered in the article How to Best Understand SAP’s Faux Change on Indirect Access. SAP will continue to apply indirect access because it is driving license revenue. Secondly, because SAP is able to steer customers to buy specific applications based upon an indirect access claim.

SAP’s Support Quality

SAP’s support quality has continued to decline over the past 15 years. SAP takes over 22% of what the customer paid for all of their licenses (there are a number of areas of support that are not covered in the standard 22%, which is why 22% is the minimum that a customer can pay. However, with most of SAP support workers being based in countries like India, where the average pay is between $25 to $35 per day, the margin on the support is immense. This is covered in the article What to Do About SAP’s Declining Support.

There are really two reasons to keep SAP’s support. One is for the actual support, which as discussed has declined to such a point that it is a very poor value. The second reason is to obtain the newest versions of software. However, SAP is not coming out with very much new that is useful. SAP’s only really good application was its ERP system, and most of the non-ERP applications have proven to be quite uncompetitive. This is covered in the article How SAP is Now Strip Mining Customers.

For this reason, there is little reason to continue to pay SAP’s support with its 90% margin when there are entities that can support SAP better than SAP at around 1/2 the cost.

Privacy an Indirect Access

Another benefit to outsourcing support away from SAP is that you gain privacy from SAP. Now certainly, SAP can come in and audit you at any time. However, the less that SAP knows about how you use SAP, the better.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
    • If this type of accuracy interests you, tell us your question below.

References

Roberto Sacco, Alexa Bona, Derek Prior, Lori Samolsky, SAP Indirect Access License Fees Can Be Significant and Unexpected,  31 July 2014

Bill Ryan, Roberto Sacco, Derek Prior, Lori Samolsky, Customers Must Resolve SAP Indirect Access Risk When Investing in SAP Functionality, April 5, 2017