SAP’s co-CEO Jim Hagemann Snabe has said that he’s “not concerned” about the rise of third party maintenance and support providers, such as Rimini Street and Spinnaker, as most of the software giant’s install base wants access to innovation.
Third party support providers have been posting impressive growth figures in recent months, claiming that SAP customers no longer want to pay hefty maintenance fees. The likes of Rimini Street claim that they can reduce maintenance costs for SAP customers by at least 50 percent.
However, Snabe told Computerworld UK at SAP’s annual customer and partner event this week in Orlando that 98 percent of customers are actually opting for the most expensive support offered by SAP.
Also, he said that customers are opting to migrate to the latest applications, which suggests they want access to the latest innovation - something that isn’t possible if you opt for support from a third party player.
“First of all, I think that it’s fine that there is choice, but I’m not so concerned about it because we have been able to move our install base to the latest version of the Business Suite very successfully,” said Snabe.
“I estimate that out of 40,000 ERP customers, at least 85 percent, if not 90 percent, are on the latest version, which means that they like our innovation strategy and they want to consume the innovations.”
Snabe said that third party support from Rimini Street or Spinnaker is fine if you are running an old version of SAP’s ERP, you don’t want any innovation and just want a company to take care of what is already running. However, he added that if this is the case then customers will be “kind of left behind”.
He added: “The trend is the opposite for us, we have a lot of customers that want more of a relationship with SAP, not less..
“You see that in the facts. We have very little loss of maintenance and 98 percent of our install base chooses enterprise support, which is the more expensive option. They wouldn’t do that if they were just on a maintenance path where they just wanted cheaper maintenance.”
Snabe’s comments come shortly after Rimini Street was able to more than double new sales in EMEA during 2012, where it saw 117 percent year-over-year growth in new client invoicing.