Article SAP will increase maintenance prices in 2024
SAP will increase maintenance prices in 2024
By Insight UK / 7 Nov 2023 / Topics: Software Software Asset Management (SAM)
SAP recently announced another yearly maintenance increase of 5% for its on-premise customers in 2024. This increase is in addition to the 3.3% maintenance increase in 2023. We think the motivation behind this increase is clear; encourage (push) their customers to upgrade to
SAP's S/4 HANA cloud solution.
So what’s the impact?
The impact of this increase will be felt by all SAP on-premise customers, your SAP costs will rise (no pun intended) and you will be trying to find ways to absorb and defend these additional costs internally. Although SAP’s labour costs may have increased, it’s important to know, the margin SAP makes on their support fees is still large. Even taking this into account and more importantly, SAP is reducing both discounts and future developments for on-premise software. So, in reality this means you are getting less for more. How can SAP really justify this price increase and degradation in development for what you are paying for?
SAP’s strategy is clear
They want to move you to their cloud-based solutions. You should take proactive steps to be in the driving seat of your software choices and not succumb to SAP's strategies and direction. It's essential to have a clear vision of your IT roadmap and identify any (future) shelfware in relation to your SAP technology. Investigate their different licensing models and explore if third-party support providers can deliver you cost savings whilst maintaining the same level of service.
You have choice
Be proactive and explore all possible alternatives, don’t let SAP be the lead in your negotiations and become recipient of enforced increase. Take control of your spend, you have an opportunity to mitigate or avoid cost increases and make informed choices based on your strategic goals.
Need support?
We have deep expertise in SAP from both a commercial and contractual perspective. We have supported many organisations, whatever their SAP position and roadmap, optimise and improve their SAP investments. Don’t wait, get the expert guidance and support to make a real difference.
