SAP Is Under Fire for Maintenance Fees -- Why Isn't Oracle?

Last year it seemed like there was nothing SAP could do right. They were attacked on pretty much all fronts—cost, deployment options, maintenance fees—and while criticisms weren’t wholly unwarranted, they were perhaps not all necessary.

Thomas Wailgum over at CIO.com tackled the issue of ERP maintenance fees on his blog today, and made some interesting observations. No, he didn’t vindicate SAP, but he did point out that SAP isn’t the only ERP software vendor to ever slip up. Namely, Wailgum takes a shot at Oracle for their 92% software maintenance profit margins. Last year SAP was very publicly derided for forcing customers to move to their Enterprise Support offering, which meant a rise in support fees; this year they seek to mitigate this misstep with a two-tier maintenance offering. Still, pundits are wary.

SAP will likely continue defending itself this year, while Oracle’s similar “offenses” seem to go unnoticed. Oracle touts 22% maintenance fees, and last fall, Oracle President Safra Catz even noted the profits they reap from maintenance fees are so large it’s “impossible” for Oracle to spend them all. So why is everyone up in arms against SAP and not Oracle?

Wailgum doesn’t imply any particular reason for outrage over SAP’s costs and not Oracle’s, but we wonder if perhaps the discontent comes from customers who thought they’d found a deal suddenly having to pay a price they’d hoped to avoid. To admit that maintenance costs earn gross profits is, well, gross, but they are still necessary to a functioning ERP platform. Some people have their price and others don’t—perhaps SAP’s failure to account for this is why they are currently in a bind.

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