The European Commission (EC) has accepted commitments from SAP to address European Union competition concerns relating to its aftermarket support services for on-premise enterprise resource planning (ERP) software.
The EC preliminarily investigation into SAP reported that the enterprise software company had engaged in four practices that could restrict competition for on-premise maintenance and support of its ERP system across the European Economic Area (EEA).
Following what it described as “constructive dialogue with the European Commission”, SAP said it has now agreed to a set of adaptations to these practices to improve flexibility, transparency and predictability.
Teresa Ribera, the EC’s executive vice-president for clean, just and competitive transition, said: “Today’s decision gives customers using SAP’s popular on-premise business management software more freedom to choose maintenance and support services without unfair restrictions that raised their costs and stifled competition.
“The legally binding commitments secured by the Commission set a benchmark for the industry more broadly and should serve as a warning against practices with similar effects in the cloud markets, where customers are increasingly moving. This decision sends a strong message: dominant firms in digital markets and beyond should not abuse their power to lock in users at the expense of choice and innovation.”
SAP said it is enhancing how customers can organise their SAP system landscape by providing a “clear, streamlined framework for splitting it into separate parts”, which it refers to as commercial installations. SAP customers can now select different levels of SAP support for these installations, elect no support at all, or make other choices outside of SAP Support.
It said it would also not charge any administrative fees for customers returning to SAP for maintenance. However, there will still be a charge. It said it would limit the back-maintenance fee to the minimum of six months or 50% of the fees for the time off.
DSAG, the German-speaking SAP user group, noted that the changes SAP has made mean that users who wish to remain on their existing on-premise infrastructure and obtain support from a provider other than SAP will be able to do so in a more granular way than previously stipulated in their contracts.
“Even with SAP’s cloud-based strategy, it is important to decide on your own how to proceed with systems that still have a positive impact on the company and there’s no need to shut them down,” said Jens Hungershausen, chairman of the executive board of DSAG.
“We see this development as the result of our effort to drive an ongoing dialogue and partnership between SAP and the customer community on such improvements. These commitments will deliver tangible benefits for customers and strengthen trust while keeping customer choice and flexibility at the centre.”
Conor Riordan, chair for UK & Ireland SAP User Group (UKISUG), agreed that greater flexibility was a positive for SAP users. “We welcome the proposed changes to SAP’s support and maintenance policies for on-premise customers. Our members have long called for greater flexibility, transparency and predictability, and these changes appear to be a positive move. This should give organisations more room to adapt to changing business conditions and evolve their SAP estates at a pace that suits them.”
