What's the Street Price of SAP?

Mengoxon asks: "Many software/hardware companies for enterprise solutions (BAAN, Oracle, PeopleSoft, ...) offer informative websites, but one thing that is always missing is the price. Whether they are afraid to let the competition know (they know anyway) or whether they don't want to shock potential purchaser 'Our suggested retail price is $800.000' or whether they first want to understand your company to do some price descrimination. I don't want to tell all my company details just to find that the price of something is way out of my league anyway and I don't want to be hassled by sales personnel while I am still in 'consideration stage'. Some companies want your general contact information BEFORE they pass out informational materials, like whitepapers! Is there any website out there where IT people can openly exchange and find out price information and evaluations of enterprise solutions before they get caught in the machinery of an enterprise solutions sales department? I know that the price of a solution is dependent on the size of the solution but if a sales person can work out the price from a few facts about the customer, then any sane IT person can probably compare an offer to another company and relate it to his own situation!"

Comments

SAP Bites =P

[Anonymous Coward]

The company I work for runs SAP. Its a mid size company, I think about 300-400 employees spread over four or five buildings, with field service and sales reps.

I wasn't really involvled with any of this, since I don't work for our IT department anymore, but the scuttlebutt was that it cost about $500,000 just for the licensing to upgrade from 31h to 40B.

Of course that's just the beginning. Our IT department (Composed of about 15 people) has six people completely dedicated to coding for SAP, and two more people who spend a lot of time on it. Plus during the upgrade period when everything was getting planned out we had three consultants there working on it as well.

Add to that mix that the new GUI is a resource hog (you can run it on a 486 if you don't mind waiting 30 seconds for stuff to happen after you push a button, and five minutes to start the application).

Management loves SAP, they market really well. However, those who have to impliment it curse it constantly. Did I mention that those SAP developers that work for us are always complaining because most of the code is commented in GERMAN?! They are also constantly loading hotfixes for SAP.

It took one of our developers about two months to make SAP work with some barcode printers we have for inventory control.

OTOH, I've seen online that some other companies really like SAP. I don't know, but I think they're embaressed to admit they spent millions of dollars on that POS.

Posted anonymously... last thing I need is to get fired because SAP sucks =P

It's not that simple

[duffbeer703]

Implementing large, complex ERP management products like SAP or Baan are not a matter of purchasing some software and loading a CD into your server.

Since ERP software will be the 'data bus' for your entire business, it needs to be customized somewhat for every implementation.

Also, SAP solutions are not standalone projects. In addition to multiple (and distinct) SAP modules, you need to have an installation of Oracle or some other RDBMS (probaly a distributed version) as well as a large investment in 'big iron' hardware configured for high availability.

Add to this employee training (end-user and IT), consulting time, conversion or integration of legacy resources, hardware & software maintainence and you have one hell of a hairball of a project that will be very difficult to plan and cost accurately. (Even after spending thousands on planning everything :) )

Time and Materials...

[gus goose]

I have worked for SAP "partners" in the UK, and I am fully aware of their strategies.

The bottom line is that SAP and most other large packages are very stable in the sense that there is not much new developpment. Their strength is in their perceived stability.

The drawback is that the model is not very flexible. SAP would never admit it, but their modules are based on "best practices", and very few businesses actually have bast practices.

Thus, to get SAP installed, it needs about 50% customisation of the code, and 50% customisation of the business. Neither of these are cheap.

Now, SAP really makes it's money on the installation, and not on the actual software. For an installation, they get to throw a number of consultants, and a number of ABAB programmers at the client, all substantially marked up. They talk in riddles alternating between MBA style management consulting, and at very basic ABAB concepts. Neither of these are in the real reach of the customer, and the customer is bent / masaged / coerced to fit the SAP mould.

Although I am biased, and am rather cynical, I believe that the above holds an element of truth.

The short answer to your question is that SAP will not tell you the proce of the product because:

1. The software is licensed on a scale related to the customer's size, support requirements and status.
2. SAP will have a licensing structure which is often significantly discounted, but not all discounts are equal. They do not want their customers to be able to easily price shop.
3. The bulk of the money comes in through implementation through customisation / consultancy. This is, if SAP is successful, performed on a time and materials basis, and thus the costs rapidly escalate.
4. Competition is quite fierce with people like Oracle, and price quoting is a bad thing if your business sales pitch is based on reputation and goodwill, not a "good bargain".
5. SAP will drain every penny they can get, and the price is really an Arm and a Leg (literally if you count the staff turnover generated by job redundancy and change stress, as well as scape-goatism).

Basically, be prepared to pay more than you bargained for, whatever you are quoted.