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Software shorts: SAP delays support fee increase

8th Dec 2009
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SAP drags its feet with enterprise support plans

8 Dec - SAP has unexpectedly delayed a planned increase in support changes. The company originally planned to move all of its customers to a 22% annual maintenance fee by 2012. The plan represented a 30% boost and matched the percentage charged by rival Oracle. However, the proposal was met with outrage by customers.

SAP backtracked and agreed a set of key performance indicators (KPIs) with the SAP User Group Executive Network (Sugen). If the supplier achieved the KPIs, the price increase would go ahead. But this week, the company announced it would postpone its decision on enterprise support pricing until an internal task force had a chance to gather customer feedback to "maximize customer value from SAP's entire support offerings".

It added: "With this, SAP once again demonstrates that it takes the concerns of its customers seriously and also recognises the ongoing pressures bearing down on IT budgets in the current economic environment.”

Industry analyst Gartner Group analyst Yvonne Genovese called the delay a “temporary solution” that may not have much impact on long-term fee increases. “While this move eases the immediate pressure on 2010 client budgets, it does little to eliminate client questions about the value of maintenance.”

For the moment, SAP’s annual fee of 18.36% of the licence price is lower than its biggest competitor, Oracle, but new SAP customers will continue to pay the industry average of 22%. Further analysis on this story is avilable from

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Sage profits drop as recession bites

2 Dec - Sage scraped its way to double-digit revenue growth in the financial year to 30 September 2009, but saw its profits drop 2% according to its unaudited preliminary results.

Overall revenues for the year were £1.44bn, up 11% from 2008’s £1.30bn, with profits down 2% to £267.4m. The company’s summary recasts the trend rates to a 4% drop in revenue and 6% increase in profit when restructuring costs and currency fluctuations are taken out of the equation. According to its highlighted analysis, “organic revenues” dropped 5% compared to last year’s 3% growth and software and related services revenues dropped 16%.

Growth in recurring subscription revenues compensated for weaker demand for software and software-related services revenues, explained chief executive Paul Walker. The company continued to counter the difficult market conditions by focusing on cost savings. As a result, cash generation remained strong, with operating cash flow up £15.6m on 2008 to stand at £357.6m.

“Conditions stabilised in the second half of the year with SMEs still investing in value-adding business management products and services. However, at this stage, we are not yet seeing a general recovery in our markets.” Walker said.


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