CRM - October 2008 - (Page 18)

• SAP “wrongly predicted” that OraCRM. “Looking forward, social networking, collaborative technologies, cle would not take legal action under and social software are producing a the assumption that Oracle would have major impact on the CRM market,” to sue its own (PeopleSoft) customers Mertz writes in her CRM report. “En- as well. At press time, SAP was scheduled to terprises face increasing challenges to determine how best to harness these respond to Oracle’s accusations in court trends and technologies for growth, on September 11. In September 2007, both internally and in their customer however, SAP publicly declared that inappropriate downloads were exclusively service strategies.” Meanwhile, on the eve of SAP’s restricted to TomorrowNow employees quarterly earnings announcement, Oracle and that no information crossed over attempted to steal the spotlight by fil- to SAP Americas or SAP AG. Regarding an amended complaint in a long- less of the veracity of Oracle’s amended running suit against its rival—and this claims, SAP announced on July 21 its time, Oracle’s accusations were directed plans to shut down operations at at top-level executives. Some observers TomorrowNow by October 31, 2008. After admitting to Oracle’s initial paint Oracle’s amended lawsuit as a gambit for publicity—albeit a costly allegations last year, SAP has repeatedly one—as opposed to having significant voiced its desire for the case to be resolved as soon as possible. Oracle, on ramifications for the industry. The suit involves TomorrowNow, a the other hand, seems prepared for the Texas-based third-party provider of long haul, declining to contest the case’s scheduled trial date of technology support for February 2010. users of Oracle’s PeopleSoft SAP informed It’s unclear whether the applications. The Tomorcustomers that case has had any impact on rowNow case, according to SAP’s reputation or its cusOracle’s filings, “is about a maintenance costs tomer base. So far, though, conspiracy to engage in would increase from and cover-up corporate 17 percent of license the only ramification, says Ray Wang, principal analyst theft of Oracle intellectual at Forrester Research, is “a property on the grandest fees to 22 percent. definition of what can be scale.” According to the newly amended complaint, Oracle al- done in third-party maintenance: What’s leges that SAP executives, including legal? What protects IT? How can people Chief Executive Officer Henning go down this path?” One thing’s for sure: Kagermann, were cognizant—prior to Wang believes third-party maintenance SAP’s 2005 acquisition of Tomor- should be available to customers, esperowNow—of the Texas firm’s illegal ac- cially when the market holds only a cess to files and electronic documents handful of options, creating a noncombelonging to Oracle. In the suit, Oracle petitive environment where the cost of states that SAP AG was warned in a ownership becomes very high. Quoting pre-acquisition presentation given by another industry pundit, Wang says, “If I TomorrowNow executives that appar- could only service my Porsche at a ently “made clear that TomorrowNow Porsche dealer, what would that be like?” SAP announced revenue growth in did not operate legally,” and, in fact, posed “likely legal action” from Oracle. software and software-related services Oracle’s filing suggests at least two of 16 percent (19 percent at constantreasons for SAP to have gone ahead currency basis) for the second quarter, marking the 14th consecutive quarter with the deal: • SAP did not want to sacrifice main- of double-digit revenue growth. SAP customers had other news to tenance revenue generated by Tomorponder: Not only did the company rowNow’s clients; and 18 CUSTOMER RELATIONSHIP MANAGEMENT | OCTOBER 2008 announce that it was shuttering TomorrowNow, but SAP Americas also informed all its customers that maintenance costs would increase from 17 percent of license fees to 22 percent, to cover additional services. “The overwhelming consensus is that it’s an insurance policy [customers] are not going to use,” Wang says. Most customers, he explains, talk to SAP for support-related issues maybe four to five times a year. He adds that, at an annual cost of, say, $500,000, it hardly seems worth it to be spending $100,000 a call. Wang advises customers to examine the components of SAP that they’re using, and to put SAP customer support to the test, taking advantage of the features SAP currently offers, which are technically free until January. He says he’s skeptical, though, that SAP will be able to put its money where its mouth is. “They’re not ready to support the number of customers who are going to come after them,” he says. Customers, he adds, need to ask themselves, “Did you get the functionality requirements you asked for in the last four years? Have [the dollars] been put back into the product with the maintenance fees that you’ve purchased?” Wang does credit Bob Stutz, senior vice president and general manager of CRM global strategy and product development at SAP, with having made significant progress in SAP CRM. “They’ve been very active in working with customers, getting requirements in there, and understanding that CRM customers are much more demanding,” he says. Wang adds, however, that despite SAP’s sizeable market-share leadership in CRM—a measure that Wang says fails to reflect actual software deployment—the company needs to play catch-up to other CRM industry peers in terms of functionality and customer service. It’s rare, he notes, that an SAP customer purchases SAP CRM as a standalone application. —Marshall Lager and Jessica Tsai www.destinationCRM.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - October 2008

CRM - October 2008 Contents Front Office Feedback Reality�Check Customer Centricity The Tipping Point Sprinting Toward Disaster? SAP�Retains Market-Share Lead in�CRM A�Week of Strong Customer�Service CRM�on Twitter Build a Good Event and They Will Come Required Reading There's No Place Like Home The New Breed of CRM�Consultant The Price is Right...You Hope How Much Marketing is Too�Much? The�Sweet Smell of High-Quality�Service The Next Act! For An Acquisition Some Stories Never Get Old CRM�Eases the Pressure For WIKA�Instruments Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - October 2008

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