ERP Software Support Is Suddenly a Sexy Topic
ERP maintenance and support fees have become a hot starlet in a cold economy.
I remember the earnest conversation about maintenance and support as if it was yesterday: At SAP's Sapphire show, in April 2007, the sun setting over the Atlanta skyline.
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Having just finished up an e-mail exchange with Shai Agassi (superfluous name drop) about why he had abruptly left SAP and was a no-show, I then proceeded to have an awkward chit-chat with CEO-in-waiting Leo Apotheker (superfluous name drop No. 2).
After Leo and his PR entourage departed, I sought out TomorrowNow's then-CEO, Andrew Nelson, to discuss third-party maintenance and support for Oracle's legacy ERP and CRM software. (You'll remember that SAP purchased TomorrowNow in early 2005 and was offering cut-rate ERP support and a "Safe Passage" for those customers to move to SAP's wares, if they so chose.)
Nelson's enthusiasm for the business model was unflagging. It all made perfect sense. Why were companies paying all this money to Oracle for PeopleSoft and Siebel support, when they could get that same support for half off the price from TomorrowNow? (Of course it also seemed odd to me that SAP customers were paying a lot of money for support, so why not offer the same service to SAP legacy customers? Nelson just smiled it off.)
After Sapphire, I dug into the enterprise software maintenance and support services area with a journalist's passion and investigative vigor. I tapped into the experts (Vinnie "Maintenance" Mirchandani, Ray Wang and others) and burrowed into this world, in order to both understand it better myself and expose what was going on to CIO.com readers.
A series of in-depth articles followed—SAP's Purchase and Attempt to Sell Off TomorrowNow, The Man Behind 'Half Off' Third-Party Software Maintenance, SAP: Oracle Software Support from TomorrowNow to End, and Oracle v. SAP Legal Fight Gets Messier, Raises Tough Questions About Third-Party Maintenance, to name but a few.
Cue the tumbleweeds crossing the road....
Nothing much happened. Our readership—comprising IT executives and business leaders interested in technology—apparently couldn't have cared less about the mostly unchecked millions they were spending on their new and old software. Or were too locked-in to upset the status quo. (Even my Mom and Dad didn't feign interest in the articles.)
But that all changed in fall 2008. As I've noted in my blog and in other articles, the global economic recession forced companies to reexamine IT spend like never before. (Hell hath no fury like a CFO scorned.) And enterprise software customers have—finally—started pressuring their ERP, CRM and other software vendors on maintenance and support. Show us the value!
Due to various and sundry motivations, most software vendors have responded to their customers. And dare I say that maintenance and support is downright sexy (I know, I know). The drama over the fees and program flexibility, the increasing competition and actual services provided is now as exciting as an alcohol-fueled holiday get-together at the Kardashian household.
It seems like a day doesn't go by when I don't receive something from enterprise software vendors on their new support initiatives: SAP's new tiered offering, Infor's Flex program (which offers maintenance fee incentives), and Microsoft's new "choice and flexibility" maintenance strategy, among others.
In other words: Most vendors are attempting to get out in front of the issue—rather than sweeping the size and scope of those bountiful fees, as well as the value proposition, under the proverbial rug.
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