SAP has second thoughts on its price hike

SAP's recent attempt to raise maintenance prices has fallen flat, at least in Germany and Austria. Will SAP extend the "discounts" to other markets?

Dennis Howlett at ZDNet reports that SAP is reversing its earlier maintenance price hike, at least in Germany and Austria. While it appears that SAP was prodded into the move due to legal reasons, I imagine that the customer backlash in such a bleak economy might have prodded SAP to reverse course, anyway:

This is a major victory for SAP customers who, despite SAP management's protestations to the contrary have continued to lobby for reconsideration of SAP's maintenance package pricing. According to the FT, some 50-60% of SAP customers in Germany and Austria were deeply unhappy with the measures, citing economic pressures contributing to difficulty in justifying what was already a tough budgetary sell. Computerwoche confirms that SAP had only managed to persuade 25% of its customers to changeover from standard to enterprise support.

The pricing changes won't kick in until 2010, but by then I suspect we'll see the same policy find its way to other markets beyond Germany and Austria. Maybe SAP and its ilk don't have quite the level of pricing power we thought?

SAP is a great company, but were it able to increase prices at will we'd have serious cause for concern.


Disclosure: SAP Ventures is an investor in my company, Alfresco.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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