To follow up on Bertrand’s recent post Price increases: because they can, and as if to prove us right, SAP attempted last week a massive switchover of the former BO customers to SAP’s technical support system. And this was a catastrophic failure, with thousands of customers unable to access the new support system. As Chris Kanaracus from PC World reported: “SAP moved more than 50,000 Business Objects customer records — including any open support issues — into its system, but not every customer has received a log-in”. They knew about this problem. And still, they switched - never mind the customers. Kanaracus actually interview a couple unhappy BO customers, and one said: “We’re pretty entrenched in their product right now. The last time we changed BI providers, it took about a year. … It’s a big roll out.” He is right. SAP, rest assured, you can do what you want, it will take a lot more than only a few weeks of tech support non-availability for customers to switch over! You have them by the balls, right?

On a slightly different topic, but still as a further proof that vendors such as SAP and Oracle do only what’s good for them - not what’s good for their clients, Sarah Lacy wrote in Business Week:

Why isn’t Oracle a bigger player in on-demand software? It doesn’t want to be, Ellison told the analysts and investors. “We’ve been in this business 10 years, and we’ve only now turned a profit,” he said. “The last thing we want to do is have a very large business that’s not profitable and drags our margins down.” No, Ellison would rather enjoy the bounty of an acquisition spree that handed Oracle a bevy of software companies, hordes of customers, and associated maintenance fees that trickle straight to the bottom line.

Indeed, as Lacy explained higher in her article: “Software sold “as a service” over the Web doesn’t sell itself, even when it’s cheaper and actually works. Each sale closed by these new Web-based software companies has a much smaller price tag. And vendors are continually tweaking their software, fixing bugs, and pushing out incremental improvements. Great news for the user, but the software makers miss out on the once-lucrative massive upgrade every few years and seemingly endless maintenance fees for supporting old versions of the software.”

Customers may not have a choice now. But they are not stupid either and won’t take the abuse indefinitely. See what happened to MicroStrategy when they decided to double their maintenance bills “because they could”. Did not turn out great for them in the long run. Who is willing to bet that SAP and Oracle will end up paying the price one day? I do.

Yves