SAP AG is facing a call for a review of its German mid-market pricing policy by the DSAG, the largest lobby group representing SAP users in the German-speaking region. This will leave the vendor with a tricky decision in its important home market.
According to reports, the DSAG has said that SAP’s price strategy discriminates against mid-sized companies in the German market when compared with larger organizations because the per-user price for mid-sized companies is higher than that for large companies.
The problem could be related to the break point between SAP’s mid-market-designated All in One software and services combo, and its top-level mySAP Business Suite. All in One is aimed at the upper mid-market, defined as companies with annual revenue between $100m and $1bn. It restricts the number of users but many of the upper-end mid-market companies will require more than the designated number, meaning they have to move to the more costly Business Suite. SAP has to decide whether to adjust the break point and lose revenue or face discontent within its mid-market-dominated home market.
The DSAG also maintains that application development is geared too much towards the demands of the US market.
No doubt Oracle will be delighted by the news. Oracle president Charles Phillips has been in Germany in recent days giving interviews in which he reiterated his company’s intention to penetrate the German market.
There was some good news for SAP, however. A DSAG poll indicated that customers had a high level of satisfaction with SAP.