A CFO’s Guide to Taking a SAP Maintenance Vacation

Take an SAP maintenance VacationManaging risk and containing costs are two CFO responsibilities that intersect when it comes to SAP maintenance contracts. SAP charges customers up to 22% of the original licensing fee each year for support and maintenance, and in some cases, annual increases are built into the maintenance contract’s automatic renewal clause. Those using SAP for support and maintenance have often felt pressured to upgrade to costly new versions or to prematurely migrate to HANA. This has been known to create a state of perpetual instability with limited value to the business.

It is well documented that software maintenance revenues generate up to 90% of the gross margin contribution to companies such as SAP. Rather than allowing your SAP maintenance and support agreement to renew automatically for 2017, now is the time to review your options. As we’ve mentioned before, there are numerous reasons to switch to third-party support providers, including an average annual savings of 62%, faster response times, core and custom code expertise on current and older versions of SAP software, global tax and regulatory compliance management, and so on.

We recommend CFOs take the following steps before you end up committed to SAP support for another year:

1.  Review your contract

Confer with corporate counsel and engage third-party SAP contract experts and analysts.

2.  Get feedback from key stakeholders

Keeping the C-Suite and IT department in the loop helps uncover issues and builds buy-in should SAP contact them directly after the cancellation is submitted.

3.  Cancel on time and follow correct procedures

SAP will reject the notice if it’s not submitted according to guidelines, so pay specific attention to the following terms and conditions:

  1. Maintenance expiration date.
  2. Required notice period (usually 90 days) and notification method (e.g., written letter).
  3. Legal notification address (along with name and title, if specified).

If you are in discussion with a third-party vendor like Spinnaker Support, but not 100% sure you are leaving SAP, still submit a cancellation. Notice of cancellation is a strong negotiating tactic.

4.  Be prepared to negotiate

SAP may counter your cancellation, and counteroffers could include:

  1. A new license (e.g., cloud) that you can’t use yet, and will have to pay to implement once you can use it.
  2. A lower level of support for a lower fee.
  3. Partial termination of licenses. This termination may result in a re-pricing of the maintenance costs for your remaining products, negating any savings. And by surrendering licenses, you concede your perpetual license (an asset) and forfeit rights to use those licenses in the future.

5.  Be prepared for threats and intimidation

Some software publishers have been known to use scare tactics to keep you from switching including:

  1. Inability to buy new licenses. Even if your contract states you cannot buy directly from SAP, there are SAP resellers.
  2. Return penalties. Check your contract to see if there are penalties (e.g., back maintenance fees) for terminating the contract or returning unused licenses.
  3. Losing access to Solution Manager. SAP offers Service Marketplace, which enables customers who are no longer on maintenance agreements to install software to which they have rights and have archived prior to the SAP maintenance expiration/termination date.

6.  Make a transition plan

If you’ve chosen to go with a third-party support provider, they will supply onboarding and archiving tools, tips, and processes to keep things from falling through the cracks. Be sure to look at the backlog of tickets with SAP that won’t get resolved before the contract expires and share them on to your new third-party partner. Also look into any SAP updates that will come out during your transition period.

Reducing risks and lowering costs offers short-term and long-term benefits for your company. Switching from a SAP maintenance contract to a third-party support provider can accomplish both at the same time. Take a SAP maintenance vacation to help fund your IT roadmap or cloud migration strategy.

Maintenance Vacation: Funding SAP Cloud Migration Strategy

أغسطس 9, 2016 | كورت مويديل | Vice President, Americas

In a new webinar, featuring Forrester Research’s Duncan Jones and yours truly, we discuss how organizations can find and fund the right cloud migration strategy for their enterprise applications. Cloud migration is a red-hot topic for CIOs, who see the promises of modern, flexible, and easy-to-implement SaaS platforms – but are waiting for a clearer cloud roadmap and business case from SAP.

Funding Your Cloud Migration Strategy

The webinar unveils Forrester Research’s new vision for enterprise applications and why Forrester believes that SaaS is the only way to deliver their vision. ومع ذلك، من المهم التمييز بين البرمجيات كخدمة الحقيقية والزائفة ويقدم دونكان بعض التوصيات المفيدة في هذا الأمر. وأما ما أثار الاهتمام الشديد لمشاهدي مؤتمر الويب كان نصيحة عن كيفية اختيار وتمويل إستراتيجية النقل السحابي الصحيحة، وقد قام دونكان باستعراضها على ثلاثة محاور مختلفة:

  1. Move on-premise applications to cloud infrastructure (IaaS)
  2. Migrate on-premise applications to incumbent software publisher’s SaaS offerings
  3. Replace select on-premise applications to independent “best-of-breed” SaaS products

In one of the poll questions, 13% of total respondents see IaaS on their roadmap, 63% see a mixture of the alternatives in their future, and 25% are unsure which path is best to take.

After revealing pros and cons for each of the three cloud migration strategies, Duncan talked about how increasing numbers of organizations are taking a “maintenance vacation” from the big ERP vendors to help fund their journey to the cloud.

Third-Party Software Support

In my session, I focused on the third-party maintenance and support market – the basic offering, benefits, and the typical characteristics of those organizations making the switch. المؤسسات التي تنتقل إلى نموذج الدعم الخارجي من Spinnaker Support لا تنهي العلاقة مع مورد البرمجيات، إلا إنها بدلًا من ذلك تتوقف عن إجراء الصيانة لفترة تستغرق من 3 إلى 5 أعوام. يقوم عملاؤنا بتوفير متوسط يبلغ ‎% 62‎ من رسوم الدعم السنوي من SAP. Regardless of a company’s size, complexity, or industry designation, third-party support is a viable alternative.

Why Companies Switch to Third-Party Software Support

Companies switch to third-party software support for a variety of reasons:

  • They simply want more comprehensive support for lower price.
  • They’re happy with their current release and opt against a forced upgrade.
  • They are migrating to a new software vendor.
  • They are financially distressed or have a mandate to cut costs.

The cloud has become a top driver of our business growth. I authored a white paper, The SAP and Oracle Cloud; A Market Report & Strategy Framework, which outlines why more SAP and Oracle users are seeking a third-party alternative after they have diagnosed software publisher cloud roadmaps.

Q&A with Kurt Moydell and Duncan Jones

In conclusion, I thought you might find the webinar’s Q&A section of interest – as follows:

  1. Does a company’s size or industry dictate which cloud migration strategy they should take?

Duncan: An organization’s complexity and how heterogeneous it is tends to drive its cloud migration strategy more so than does its size or industry designation. فغالبًا ما تختار الشركة التي تتميز بتعدد أقسامها لطبقات مختلفة من العملاء إستراتيجية تقودها وحدة أعمال ومتعددة المصادر لجذب موردي برمجيات كخدمة مستقلين تناسب نطاق احتياجاتهم.

وبالتالي، غالبًا ما تختار المؤسسات المتشابهة التي تتميز بمزيد من القيادة المركزية، مزيدًا من توحيد المقاييس والإبقاء على العروض السحابية لكبار البائعين الأساسين. هناك تطبيقات ناشئة ذات صلة بمجالات محددة قد تكون أكثر منطقية في بعض الحالات من قبول عروض عامة ومحاولة تخصيصها لتفي باحتياجات الأعمال. Such SaaS offerings should be investigated as part of the overall cloud migration strategy.

  1. What is the typical reaction of the big software vendor, i.e., SAP or Oracle, when a current customer notifies them of support cancellation with intention to switch to third-party support?

Kurt: يختلف رد فعل كبار بائعي البرمجيات حسب البائع والمنطقة الجغرافية. وأحيانًا لا يكون هناك أي رد فعل على الإطلاق. لكن سيزداد رفض هؤلاء البائعين لذلك. أصبحت SAP أكثر استباقية في محاولة لتعزيز ما قدمته عروض الدعم من قيمة. يمكن أن يختار العملاء قبول ذلك حسب كونها دقيقة أم لا.

تبدأ SAP وOracle بتقديم حوافز للاحتفاظ بعملاء الدعم. لم نر حتى الآن خصمًا على رسوم الدعم ولكننا رأينا بدل ذلك عمليات تجارية وحوافز لاستثمارات مستقبلية تتعلق بالترخيص السحابي. تعتمد فعالية التراخيص السحابية من عدمها على ما يفرضه توقيت إدراك العميل لقيمة الأعمال. في كثير من الأحيان، تكون القيمة “المخطط لها” بعيدة المنال فيطلب العملاء العائد الاستثماري الفوري، وليس مجرد برمجيات مهملة. In short, we are not seeing tradeoffs that sufficiently offset high support fees.

Duncan: من المهم تقييم العلاقة بين العميل وبائع البرمجيات. حيث إن كبار بائعي البرمجيات الذين يحصلون على أموال الدعم/الصيانة من العملاء وليس التراخيص البرمجية الجديدة غالبًا ما يعتبرون هؤلاء العملاء “خاملين”.

فبالإضافة إلى توفير المال، قد يتسبب إيقاف الصيانة في تطوير علاقة العملاء وتحسينها مع كبار بائعي البرمجيات الذين يتعاملون معهم. وبعد إيقاف عملية الصيانة، يمكنك أن تعود كعميل سخي ويتم الترحيب بك بصدر رحب كأنك عميل “جديد”. On the other hand, if the big software vendor is not providing a reasonable conversion package to its SaaS offering, maybe the relationship isn’t worth all that much.

  1. What are some of the trends that you’re seeing in the third-party support market?

Duncan: أرى تدفقًا مستمرًا من الاستعلامات ومزيد من قبول مفهوم الدعم المقدم من أطراف خارجية. حيث يحاول مزيد من الموردين الانضمام إلى السوق. فالقواعد التي تحكم ما يستطيع أن يقدمه مورد الدعم المقدم من أطراف خارجية وما لا يستطيع فعله أصبحت أكثر وضوحًا. يتخذ العديد من العملاء هذا المنحى ويرون مزاياه؛ حيث خلق مزيد من الزخم. وعلى العكس، أرى بالفعل بعض ردود الأفعال كذلك من جهات نشر البرمجيات. يقدم بعضهم عملًا رائعًا حيث ينظرون في عروض الدعم المقدمة ويفكرون في كيفية جعلها أكثر قيمة وتقديم المزيد من قيمة الأعمال للأموال التي يحصلون عليها.

إذا رغبت في التعرف على المزيد بشأن تمويل إستراتيجية النقل السحابي من SAP بمساعدة الدعم البرمجي المقدم من طرف خارجي فإن Spinnaker Support سترشدك في ذلك.

7 Reasons to Consider Third-Party SAP Software Support

August 3, 2016 | Michelle Wilkinson | Director of Marketing

SAP charges between 18-22 percent of the costs of its software licenses for annual support, compelling many companies to consider the benefits they actually receive from SAP. For some companies, switching to third-party software support is a viable and attractive alternative to traditional SAP support services.

How do you know if your company is a good candidate for third-party SAP software support? Here are seven things to consider:

Is your business running smoothly with your current SAP solution?

You might feel pressured by SAP to make unwarranted upgrades to your ERP software. However, there can be significant cost, instability, and risk involved with forced upgrades or SAP HANA migrations. Third-party SAP support experts learn your specific environment and business requirements to provide best-in-class ongoing support for your current software solution for as long as you want.

Are you currently getting your money’s worth for SAP support?

Examine how often you use SAP software support to care for your on premise applications. Are you using it enough to justify paying approximately 20 percent of the cost of your licenses each year? Has your support declined as your software version has aged? And are you receiving personalized fixes and advice in a timely manner rather than online links based on search queries? If you are, great! But if not, keep in mind that with third-party SAP support services from Spinnaker Support you can realize world-class support for a fraction of what you are paying SAP.

Are you using custom code?

Most companies have customized their enterprise software to some degree, from minor modifications to highly customized code. Because SAP doesn’t provide support for custom code, you may need to look elsewhere to solve custom code-related problems. Third-party SAP support providers deploy experienced software engineers who can analyze and support both core and custom code, troubleshoot problems, fix bugs; whatever you need. They also provide an array of advisory services across the entire technology stack to diagnose interoperability and security issues pertaining to either generic or custom software.

What version of SAP are you running?

With each new release, support for aging versions becomes costlier. SAP focuses forward and invests more for newer versions and the SAP HANA cloud platform. This does not mean that you have to invest in a new version every time one is released. There should be a viable business case and decisions mustn’t be made solely on cost and completeness of SAP support. Third-party SAP support providers specialize in all on premise versions of the software (older or newer), giving you control of your own destiny.

Do you like being a high priority while having an experienced SAP software engineer as your point person?

It is well documented that the software mega-vendors generate about 90% profit from annual support. They prefer developing futures, i.e., the cloud, more than new functionality for aging versions. Third-party support providers focus on support and solutions to issues on your existing version, giving you better service when you need it and for as long as you need it. The third-party SAP expert assigned to your account gets to know your business, the modules you are using, your technology architecture, and the business outcomes you need. Independent analysts have stated that customers who pay the mega-vendors for support, but not for new software licenses, are often considered dormant. It is hard to feel like a high priority when you’re categorized as dormant.

Is your contractual commitment with SAP coming to an end or is coming up for renewal?

Depending on the terms of your contract, you likely have an annual renewal of your SAP support agreement. SAP requires a 90-day notification of cancelation, otherwise your annual support agreement is automatically renewed. Generally, the timing of the renewal is December 31, whereby the cancelation notice would be due in their hands by September 30. You have the choice to end the contractual commitment each year when the renewal is up. Before committing to even 1 more year, explore your options. Renegotiate a better deal with the software vendor or save an average of 62% with a third-party. You win either way.

Are you planning to migrate on premise enterprise applications to the cloud?

The cloud is here to stay, so now IT departments are trying to figure out how to incorporate it into their business. How, when, which applications? In a recent webinar, Forrester Research talked about taking a “maintenance vacation” from SAP in order to choose a strategy and help fund the transition. More detail on this topic is coming next week.

Not all third-party SAP software support providers offer the same level of service. To discover whether Spinnaker Support is right for your business, please contact us today.

JD Edwards INFOCUS 2016 | Things to do in Denver

أغسطس 1, 2016 | جيسي إجان | Digital Marketing Communications Specialist 

Spinnaker Support is proud to announce that we are a sponsor at the 2016 JD Edwards INFOCUS conference running August 8-10 at the Sheraton in downtown Denver. INFOCUS هو فرصة لمستخدمين JD Edwards للعمل معا للإصغاء والتعلم، والتواصل مع أقرانهم لتقاسم المعرفة. We are excited to participating in this event once again.

As INFOCUS is being hosted in Denver, that means there are a multitude of other activities to enjoy between INFOCUS events while you’re visiting the Mile High City. إذا ما كنت تزور لعدة أيام فقط أو لأسبوع كامل – لا تفوتك الفرصة أن تستكشف هذه المدينة التاريخيّة وكل وسائل الراحة التي يمكن أن تقدمها لك. فيما يلي ذكرنا بعض أنشطة اللهو والمرح لأيّ مقبل يستطيع أن يختبرها في أو حول المدينة. تعرف عليهم! The links are below the infographic.

InFocus Things to do in Denver

 

In & Around Downtown…

  1. Rockies Game – vs. the Texas Rangers on Aug 8&9
  2. Beats on the Creek at Coohills – Enjoy live music and great food
  3. Union Station – Shop, dine or take a ride on one of Denver’s many transportation options.
  4. Rent a bike or hop on one of Denver’s B-cycle bikes, and check out the beautiful scenery along the Cherry Creek Trail
  5. Bowl a few frames at Lucky Strike at the Denver Pavilions
  6. Denver Breweries – Create your own tour or join a guided tour and discover the best breweries that Denver has to offer.
  7. Get yourself a cocktail at the Peaks Lounge in the Hyatt Convention Center and enjoy the best views of the mountains from the city – with especially great views at sunset.

If You Have Time During the Day…

  1. Awkward Family Photos Exhibit at the History Colorado Center – Take solace in knowing there are families that are weirder than yours with this wonderful photo exhibit.
  2. Elitch Gardens – Theme Park and Water Park
  3. Check out one of Denver’s many parks and take some time to kayak, paddleboard, rent a bike, or just sunbathe in the grass.
  4. US Mint Tour
  5. Civic Center Eats – Live music and delicious food benefitting the Civic Center Park revitalization.
  6. Check out a little history and visit the Molly Brown House – the Titanic heroine’s Victorian mansion.
  7. Join a walking tour of one of Denver’s historic neighborhoods like LoDo or Capitol Hill.

If You Rented a Car…

  1. Denver Botanic Gardens – Join a yoga session, wander the beauty that is the botanic gardens or check out live music with Bruce Hornsby and the Noisemakers on Aug 8th.
  2. Take a short trip to Golden, just a few minutes outside of Denver and visit the Coors Brewery for a historic tour that includes free beer!
  3. Head to Wings Over the Rockies Air and Space Museum to enjoy 40000 sq ft of aviation history.
  4. Wanna squeeze in18 holes? Discover the many city run golf courses that Denver has to offer.
  5. If you’re looking to do a little hiking, biking, boating, fishing, swimming or maybe a little of everything – Cherry Creek State Park has all these amenities and more.
  6. Enjoy a concert at Red Rocks Amphitheater – Flogging Molly Aug 8 or Eric Church Aug 9 & 10. Or if you have extra time, Red Rocks has great hiking during the day.

Don’t miss out on your chance to learn at INFOCUS while experiencing all that Denver has to offer during your stay. Make the most of your time here by clicking on any of the above links for more information about that specific activity. We’re confident that you will not be disappointed.