October 22nd, 2009
SAP and Siemens: kiss and make up?
The other week news broke that Siemens planned to can its estimated €40 million plus annual maintenance agreement with SAP. What a difference a few weeks makes. According to a press release issued by SAP:
SAP…today announced that Siemens AG, a global leader in electronics and electrical engineering, has expanded its strategic relationship with SAP through its selection of the SAP® Supplier Relationship Management (SAP SRM) application for Siemens’ worldwide e-procurement operations. Also announced was the completion of Siemens’ contract renewal for SAP maintenance support services for all SAP solutions based on SAP’s maintenance standards for large customers for a duration of three years.
[my emphasis added]
Colleague Vinnie Mirchandani was on the case with his old Gartner buddy Helmuth Guembel:
He [Helmuth] hears Siemens got the deal at under euro 20 million a year compared to the euro 35 million they were paying earlier. They also got perks such as MaxAttention, extended maintenance on some Siemens specific enhancements thrown in and also got some shelfware off maintenance.
SAP will, of course, publicly deny this and Siemens will, of course, publicly not confirm it. And they are very justified in not sharing the gory details.
SAP cannot be happy seeing these issues raked over in public. I already know Siemens does not intend for this to become a media issue and SAP doesn’t want to say much beyond the press release although they question whether Helmuth got it right. That’s completely understandable if frustrating. As Vinnie says: ‘he said, she said.’
Fact of the matter remains that those of us who support the buyer in the buy/sell relationship hear about discontent day in and day out. The language at times is anything but ‘family friendly.’ RiminiStreet and other third party maintenance providers would not have a reason to exist if the main vendors were more flexible in their arrangements. Whatever really happened, Siemens must have got something substantial out of the negotiations otherwise SAP would not have gone to the trouble of making the point. That should send a strong signal to buyers: think before you sign up for another 1,3,5 year deal.
At 9am PT today, Vinnie, Ray Wang, Frank Scavo and myself will be sharing a webinar session discussing SAP maintenance TCO. It won’t be easy for SAP to hear what we have to say but then this is only one company within the enterprise arena. We are an equal opportunity flamethrower so in future sessions we will be addressing similar issues around Oracle, Infor and so on.
Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.
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