SAP and SAP User Group Executive Network (SUGEN) Announce SAP® Enterprise Support Milestones

WALLDORF, Germany .— SAP AG (NYSE: SAP) and the SAP User Group Executive Network (SUGEN), a global federation of 12 key SAP user groups, today announced an agreement on a defined list of key performance indicators that will be used to measure the success of SAP® Enterprise Support services. Also announced was the rollout of a joint benchmarking program that will use key performance indicators to define and measure how SAP customers derive value from SAP Enterprise Support. In this joint benchmarking effort, the key performance indicators will be measured and tracked among a representative selection of customers. As a further demonstration of its commitment to customers, SAP has modified the 2008 pricing program for SAP Enterprise Support as it applies to support contracts migrated to SAP Enterprise Support. This decision coincides with its recently announced seven-year maintenance lifecycle (see “SAP Enhances Value of SAP Customer Relationships”).

“We are convinced that SAP Enterprise Support delivers unparalleled value to all customers and, as a demonstration of our commitment, we will provide tangible reductions in their operational costs on a defined schedule,” said Léo Apotheker, co-CEO, SAP AG. “SAP is now the role model for the evolution of software support offering an industry game-changing standard for transparency, accountability and the clear measurement of value. We remain strongly committed to helping our customers both protect their investments and closely manage costs.”

A joint SAP–SUGEN task force formed in November 2008 (see “SAP and the SAP User Group Executive Network (SUGEN) Liaise to Quantify Value of New SAP Support Offering”) has established the SUGEN Key Performance Indicator Index (SUGEN KPI Index), which will measure and verify the ongoing value of SAP Enterprise Support. This effort will help customers by providing a transparent mechanism to link their support investment to the value delivered. SAP has agreed to postpone the subsequent price increase schedule until the targeted improvements measured by the SUGEN KPI Index are met. Successful delivery on KPIs is expected to demonstrate tangible cumulative cost savings for customers. This value delivery is targeted to be fully realized within the four-year time frame of the benchmarking program.

“SUGEN and SAP have formed a strong partnership based on a common goal of ensuring that current and future SAP customers fully realize the value of SAP Enterprise Support,” said Mike Stoko, SUGEN chairman. “The SUGEN organization represents a global community of customers, and it is on their behalf that we form joint task forces with SAP to work on strategic issues such as SAP Enterprise Support. SUGEN is excited about today’s announcement – our collaborative efforts are resulting in the first program of its kind for the IT industry, providing transparent, measurable ways for customers to truly see how valuable SAP Enterprise Support is for their organizations.”

The SUGEN KPI Index aggregates key performance indicators from four major categories representing key customer business value-drivers, which were defined after joint discussions with customers. The four major categories for the SUGEN KPI Index are:

* Business Continuity
* Business Process Improvement
* Protection of Investment
* Total Cost of Operations

Benchmark Study Process Announced
The key performance indicators within the SUGEN KPI Index will be measured as part of a formal benchmarking program that will provide customers with a baseline against which to appraise and compare the value delivered by SAP Enterprise Support. In order to achieve consistency in the measurements over time, SUGEN and SAP will select a core representative customer group that will deploy capabilities of SAP Enterprise Support and track their results. Quality assurance on the benchmark program and its results will be validated by an independent third party. The program has the full and unanimous support of all SUGEN members and the SAP Executive Board.

“In collaboration with SAP, we achieved an important milestone by setting up this long-term benchmark program and tying the added value to further price increases,” said DSAG board member and SUGEN SAP Enterprise Support lead Andreas Oczko. “With this effort, companies will gain insight into the SAP Enterprise Support value that SAP promises its customers.”

Modifications to the 2008 SAP Enterprise Support Pricing Program
In consideration of the current economic climate and discussions with SUGEN on SAP Enterprise Support, SAP is extending by three years the four-step price increase program announced in July 2008 (see “SAP Enterprise Support Offering Rolled Out to All Customers”) for customers that were migrated to SAP Enterprise Support at that time. Originally scheduled to run until 2012, the program will now conclude in 2015, coinciding with the recently introduced 7-2 maintenance strategy. Starting in 2010, the price of SAP Enterprise Support for existing customers will continue to increase based on individual contract terms but will not be higher than a yearly fixed upper cap. This translates to an increase average of no more than 3.1 percent per year from 2010 onwards. The price of SAP Enterprise Support will be capped at 22 percent through 2015. With this adjustment, SAP demonstrates a clear commitment and responsiveness to its customers and the challenging global economic conditions they must navigate today.

Industry Analyst Comment on Announcement
“SAP’s goal to provide a rating of application support via key performance indicators is innovative and challenging,” said Peter Wesche, research director, Gartner. “The extensive benchmarking phase and mapping of key performance indicators to business value will allow customers to fully understand the benefits of a comprehensive support program.”