SAP price hike has customers asking difficult questions

Data center
(Image credit: Future)

SAP user group DSAG has voiced complaints about the recent increases in support fees for the German company's popular enterprise software. 

Thomas Henzler, DSAG board member, told The Register that though SAP is "within its rights" when it comes to raising prices, "the value received for maintenance had fallen over time, making the price rise difficult to justify".

The executive went on to claim that  "we are seeing an increasing modularization of the core ERP product (S/4HANA)", which means "that solutions that were previously still part of the ERP are now increasingly being marketed individually and the customer, therefore, has to pay for them additionally".

How big are the hikes?

The prices for SAP Standard Support, SAP Enterprise Support, and SAP Product Support for Large Enterprises are set to rise for existing customers from January 1, 2023 onwards.

SAP claims the price rises are in line with the local consumer price indexes, and that they will be capped at 3.3%.

SAP justified the increases by saying that it was "not immune" to the wider economic trend of high inflation rates.

"SAP is not exempt from these developments as they are readily impacting our offerings through higher energy and labor costs, as well as increasing expenses for third-party services," said an SAP spokesperson.

SAP was able to reply to the user group's claims with some additional justifications, telling The Register its strategy of offering its tools in more specialized components enables its "customers to make more targeted investments where they expect the most added value and operational benefits for their business".

The move comes as SAP is still pivoting its business to a new model, in October 2020 the company said it was "all in on its shift to cloud computing", abandoning short-term profitability targets. 

Unfortunately for end consumers, this likely won't be the last major price rise we'll see from major software vendors.

Research from Gartner recently predicted that over the next 36 months, software as a service (SaaS) vendors are planning a significant increase in their prices, by as much as 20% in some cases.

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Will McCurdy has been writing about technology for over five years. He has a wide range of specialities including cybersecurity, fintech, cryptocurrencies, blockchain, cloud computing, payments, artificial intelligence, retail technology, and venture capital investment. He has previously written for AltFi, FStech, Retail Systems, and National Technology News and is an experienced podcast and webinar host, as well as an avid long-form feature writer.