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Risk

1/15/2010
08:41 AM
Bob Evans
Bob Evans
Commentary
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Global CIO: SAP Blows Huge Opportunity With Timid Support Changes

SAP is overblowing its new support plan, which gives customers only marginally more choice.

"--Sumptuously Supreme is 48 ounces and comes with a lid, a straw, free refills, your choice of flavors, your choice of ice or no ice, drink-holder, swizzle sticks, sweeteners, and a thank you from the order-taker. Its price is $2.00.

"—Not As Good is 40 ounces and comes with a lid, one ice cube, and a small napkin. Its price is $1.85."

I guess my main problem in all of this is SAP's apparent belief is that the world hasn't changed much in the past five or 10 years, and that the business model it rode to such phenomenal success in its first few decades existence will endure forever, regardless of changes in technology, competition, customer requirements, and global business climate. And that out-of-touch mentality is precisely what has caused SAP to miss this golden opportunity, and to miss it badly.

SAP could have positioned itself as the global enterprise-software company that has not only the widest range of superb technology but also the one with the most modern and customer-centric business models. But it didn't.

SAP could have positioned itself as the enterprise software company that is willing to share risks and rewards with its customers in everything from products to services to support to new-product development. But it didn't.

SAP could have buried Oracle as a serious contender for the top spot in global enterprise applications by clearly and unambiguously using a truly tiered support and maintenance structure—one with more than two barely separated price points—to differentiate itself unmistakably from Oracle's monolithic 22% for all. But it didn't.

SAP could have given its customers and prospects the incentive to throttle back on their evaluations of alternative vendors and approaches, including SaaS and other cloud models. But it didn't.

SAP had the chance to truly remake itself in the minds of its customers and prospects worldwide. But it didn't. And as a result, in today's tumultuous business-technology world, SAP might well learn that an opportunity is a terrible thing to waste.

RECOMMENDED READING:

Global CIO: Why SAP Won't Match Oracle's 22% Maintenance Fees

Global CIO: Where Do Oracle's Profits Come From?

Global CIO: Will SAP Move To Tiered Maintenance Fees?

Global CIO: SAP Is Testing Flat-Rate Pricing For Large Enterprises

Global CIO: An Open Letter To SAP CEO Leo Apotheker

Global CIO: Will Oracle Or SAP Blink First On 22% Maintenance Fees?

Global CIO: Oracle And SAP Race For Mid-Market Opportunities

Global CIO: SAP Eliminates All-Up-Front Payment Requirements

Global CIO: SAP Preps For Cloud Future Via New Intel Partnership

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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