Executive Briefings

Support, Maintenance Fees Charged to Customers Enable Needed Research, SAP Exec Says

SAP AG co-Chief Executive Officer Bill McDermott said the fees charged to customers for software support and maintenance are fundamental to fund research and development of new offerings.

In 2009, toward the end of now-Hewlett Packard Co. CEO Leo Apotheker's reign at SAP, the company had quarreled with some customers about maintenance prices. A company such as Siemens AG, Europe's top engineering firm, may spend about 30 million euros ($43m) in annual maintenance fees, said Helmuth Guembel, managing director at consulting firm Strategy Partners.

"The systems that SAP sells and that customers use to run their business are mission critical to the operation of their company so the investment in support is well worth it," McDermott, 49, said in an interview. "The only way software companies can stay in business is by refueling the research and development machine and constantly innovating."

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SAP AG co-Chief Executive Officer Bill McDermott said the fees charged to customers for software support and maintenance are fundamental to fund research and development of new offerings.

In 2009, toward the end of now-Hewlett Packard Co. CEO Leo Apotheker's reign at SAP, the company had quarreled with some customers about maintenance prices. A company such as Siemens AG, Europe's top engineering firm, may spend about 30 million euros ($43m) in annual maintenance fees, said Helmuth Guembel, managing director at consulting firm Strategy Partners.

"The systems that SAP sells and that customers use to run their business are mission critical to the operation of their company so the investment in support is well worth it," McDermott, 49, said in an interview. "The only way software companies can stay in business is by refueling the research and development machine and constantly innovating."

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