Users reject pricing of software vendors

In the "Satisfaction Index for License Pricing" compiled for the first time by Voice, the Federal Association of IT Users, the major software providers score poorly to very poorly.

On a scale from "completely dissatisfied" (0) to adequate (5) to "absolutely satisfied" (10 - not shown in the chart because no provider scored higher than "adequate"), all but one of the providers mentioned scored well below average. The majority of them scored between 3 and 4 index points.

The question here was not about product quality, but about license pricing - a point that the DSAG user association has also been criticizing for many years with regard to the SAP PKL (price and conditions list).

SAP fails

The ERP world market leader SAP scored particularly poorly in the evaluation. The lack of transparency on the part of SAP sales representatives combined with an almost unmanageable price list is evident.

The combination of license, volume and engine prices is almost impossible to understand in the case of SAP. ERP and CRM is even classified with a value well above 3. In the area of Data Warehouse/BI, the Walldorf-based company only achieved 2.46 index points.

However, it is not clear from the voice figures whether this is a general assessment of SAP Business Warehouse or whether the expensive conversion to Hana has already been included.

Ultimately, however, it explains the very heterogeneous BI scene within the SAP community with its user and engine prices. While BW is primarily used almost across the board by the very large existing SAP customers, SMEs are very happy to use cheaper BI solutions from SAP partners or Excel add-ons.

The prices of the other software providers are by no means met with approval either. Microsoft, for example, was only awarded 2.75 points in the CRM sector. Other industry giants such as Oracle, IBM and Adobe did not cover themselves in glory either:

The CAD provider Autocad was rated slightly better with 4 points. The security provider Kaspersky reached the upper end of the satisfaction scale with 6.6 index points - but this was only a relative success. The respondents do not appear to be really satisfied with the providers' license price policy (see chart).

63 users took part in the survey, most of them (45%) with an IT budget of between 2 and 49 million euros. 24 percent of participants spend between 50 and 200 million euros per year on IT and around 4 percent spend more than one billion euros per year on IT.

The SME sector responds

Users' anger at the pricing is understandable. After all, 70 percent of them spend between 10 and 30 percent of their IT budget on software licenses alone. With an IT budget of 50 million euros, that would be a whopping 5 to 15 million euros.

"Although IT budgets are rising moderately again this year, when you consider how large the fixed costs are that users have to bear each year in addition to personnel and equipment costs, there is little room for innovation. The costs for the applications already in use leave users little room for maneuver"

explains Voice Service Manager Patrick Quellmalz.

Bombardier, an existing SAP customer, pays around 15 million a year for its software maintenance (support). As an alternative, an offer was prepared by Rimini Street, which claimed to provide a similar or better service than SAP in the areas of SAP R/3, ERP/ECC 6.0 and BW. Rimini Street demanded 7.5 million for annual maintenance, whereupon SAP massively reduced its maintenance fee. Bombardier stayed with SAP.

Cloud should be inexpensive

Unfortunately, there are no signs of a more user-friendly license pricing policy from providers in the area of cloud computing, although the marketing promise is to at least make costs more flexible, if not reduce them. Source malt:

"Even in the cloud environment, providers' pricing policies remain extremely complex and opaque. More simplicity and transparency are urgently needed."

A demand that also comes from DSAG e. V. with regard to the Hana Enterprise Cloud (HEC). The current SAP cloud prices were described as unrealistic at the most recent meeting of the user association.

Voice calls for simple and transparent license terms and metrics, the involvement of users in the discussion about new license models and better documentation and free provision of detailed license information.

Demands that the SAP user association DSAG has been making for many years - sometimes unsuccessfully.

"We urge providers to make their contribution here. The digital transformation and the switch to cloud solutions already demand a great deal from users. They would therefore very much welcome a simpler and fairer licensing policy from providers"

said Quellmalz.

And Voice Chairman Thomas Endres adds: "The licensing policy must become simpler and more transparent. Providers should develop simpler and cheaper alternatives to the current licensing policy, especially with regard to cloud computing.

Otherwise, software asset management threatens to become even more complex. The results literally call for a constructive discussion with licensors, which we are happy to enter into at our event and forum formats."