An endangered species

December 14, 2009 --

In a smart IT world, clients would cheer when a price drop was announced. But in our glass-half-empty world, customers only show joy when they hear that a price increase has been postponed!

This is the sad reality of the proprietary IT universe. "SAP Announces Delay in Maintenance Fee Increase" and (particularly DSAG and USF) express their delight.

As mentioned in a previous post:

"The price of maintenance is thus set at 22% of the software license price, compared to the 17% it was previously. However, this increase will not take full effect before 2015 for current customers - the cost of support will go up 3.1% annually, rather than an immediate 8%. New clients will be charged 22% as soon as they sign the contract.

In exchange, SAP agreed to jointly develop KPI benchmarking in order to measure the value of Enterprise Support (business continuity, business process improvement, protection of investment and total cost of operations) and to delay future increases until these targets are met."

Eweek commented that on December 1 SAP announced "it will delay a decision on increasing customers’ maintenance fees until the beginning of 2010, in recognition of "ongoing pressures" on IT budgets in the aftermath of a global recession." So, changing a maintenance fee from 18.36% to 18.9% is delayed; and that’s the good news!

In the aftermath of a global recession, we would be more inclined to suggest that they switch to open source. And it does seem that they’ve noted the trend. As Eweek reported: "SAP saw its revenues fall by 9% during the most recent quarter, due to an ecosystem-wide decrease in spending on business software."

In response to the SAP decision, two of the user group members leading the project resigned, but "the Enterprise Support program is still on track." So, besides the ongoing recession, what can SAP users expect? Nothing. As shown by Oracle’s decision earlier this year, the maintenance fee is set to rise to 22%. This is business-as-usual in the proprietary software world.

As I said in my earlier post: "Maintenance fees for open source solutions aren’t calculated the same way and, with no license fee, the open source alternative is far less expensive than a proprietary solution. And, finally, with free access to the source code, users can easily personalize their systems and at much less expense than contracting with SAP’s expert consultants."

In fact, user reaction might be straightforward. They know that open source alternatives can help them cut expenses, while keeping the same level of service. And this is strengthened by Talend’s recent inclusion in the Gartner Data Integration Magic Quadrant. Open source is here to stay!