Managing Automation - February 2009 - (Page 15) Quote of the its on-demand effort alone. The software has a robust feature set that enables a company to manage the entire manufacturing process, from shop floor to top floor. Aside from the typical ERP and SCM capabilities, a comprehensive MES offers production scheduling, shop floor control, quality management, traceability, labor and tracking, machine integrated SCADA, and more. “We cover virtually everything a manufacturer needs to run a business, except cutting paychecks,” Symonds says. And while Plex Systems has made significant inroads in the automotive industry, it says it is seeing an uptick in activity in the food and beverage and life sciences segments. “There is a great phenomenon happening now that has to do with Y2K,” Symonds explains. During Y2K, there was a boom in ERP installations, he says, but the average lifespan of ERP is seven to 10 years. “Now, companies are looking to replace those products, and they are looking outside of the incumbent suppliers We’ll continue to win a huge amount of that business.” — Stephanie Neil hear it. Last July, SAP rolled out what it called Enterprise Support, effectively raising annual maintenance rates paid by most customers from 17% of a net license charge to 22%. The increase, which began to go into effect last month, will be rolled out gradually, taking full effect in 2012. “The grumbling has been more passionate in some parts of the world than others,” says Rod Masney, immediate past chairman of the Americas’ SAP Users’ Group (ASUG) and global director for IT infrastructure services at OwensIllinois. “Nobody likes to take an increase, and some customers have been more vocal Rod Masney about it than others.” While customers across SAP’s customer base have objected to the increase, users in Europe have been the most vocal, Masney says. In fact, customers in Germany and Austria won a one-year reprieve from the increases after pointing out that local laws limit changes that can be made unilaterally to existing contracts. As much as anything, Masney says, customers objected to the manner in which SAP communicated the price hike. In justifying the move, for example, SAP executives said some customers had requested the new program, which, in addition to raising prices, enhances maintenance services. SAP also justified the move by noting that the increase brought its fees to parity with the 22% maintenance price rate charged by its number one competitor, Oracle. “SAP had some work to do in articulating the value proposition behind the change,” Masney says, noting that the Enterprise Support program includes new features such as a 24/7 support adviser service and a new version of SAP’s Solution Manager software that makes it easier for customers to track down and fix software problems. “SAP didn’t adequately explain what customers were going to get out of the change,” AMR’s Shepherd says. Given such concerns, it’s not surprising that other enterprise software vendors have resisted increasing their own maintenance prices. Soon after SAP announced its new maintenance pricing program, Jim Schaper, president and CEO at applications vendor Infor, told Managing Automation that he had consid- MONTH “The grumbling has been more passionate in some parts of the world.” — Rod Masney, president of the America’s SAP Users’ Group, said of customer reaction to SAP’s maintenance pricing increases For the Continued from page 12 Record ductivity, and cut operational costs. Hearing implant maker Cochlear Limited chose Dyadem FMEA-Med software to standardize its quality assessments. Dow Chemical is using Elemica’s Connected Solution for Procurement. PEAK Technologies developed a barcode printer applicator for ice cream cone manufacturer Joy Cone Co. Watch and clock maker Jaeger-LeCoultre implemented PTC’s Product Development Solution. FINANCIAL Aravo closed $7 million Series D financing for expanding sales, engineering, and delivery capacity. Vanguard Voice Systems, maker of the Mobile Voice Platform for enterprise-wide voice-directed data capture and control deployment, landed $2 million Series B funding from Berkshire Ventures, LLC. SAP PRICE HIKE NOT GOING OVER WELL, ANALYSTS SAY ust over six months ago, when SAP AG announced a new Enterprise Support software maintenance program carrying higher support fees for most of its customers, many observers expected other enterprise software vendors to follow suit and increase their own maintenance prices under the cover of SAP’s move. The good news for manufacturers trying to keep a lid on software costs during the recession is that, for the most part, that hasn’t happened. Influenced by a surprisingly strong backlash among SAP customers reacting to the maintenance price increase and by the economic downturn, even software vendors that had considered following SAP’s lead have decided not to. “We’ve had private discussions with vendors about how they could increase maintenance prices now in the 18% range, but, given all of the noise about SAP’s move and pain being inflicted by the recession, nobody’s going to do that right now,” says Jim Shepherd, research senior vice president at AMR Research. Grumbling from SAP customers about the maintenance price increase has been substantial, say analysts and others in a position to J M&AS Autodesk, Inc. bought ALGOR, Inc., a provider of analysis and simulation software, for $34 million, as well as iLogic software and technology from Canada-based Logimetrix, Inc. Emerson acquired process control system engineering and industrial technical services company Bay-Tec Engineering. GXS bought Interchange Servicos S.A., a Brazilian provider of EDI services. PA R T N E R S H I P S AT&T and Oracle teamed up on a subscription-based PeopleSoft product for HR, payroll, and back-office operations. Boomi is partnering with Host Analytics to deliver on-demand integration for its software-as-a-service CPM suite via Boomi AtomSphere. Bottomline Technologies, which offers collaborative payment, invoice, and document automation products, entered a partnership pact with ERP provider QAD. Information Builders teamed up with Tagetik to develop real-time reporting, planning, and forecasting software. 15 February 2009
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