When SAP positions PSLE as an opportunity for your company, the fact that you will be paying a 17% factor for support in lieu of 22% is compelling at first glance. But before your company starts calculating potential savings, consider the following:
Will PSLE Meet Your Needs?
A common misconception in the market is that the only distinction between SAP Enterprise Support and PSLE is the reduction in the support factor by 5%. However, when considering the reduction in the support factor, we recommend taking an opportunity to solicit clarification from SAP and understand the corresponding reduction in support under PSLE.
The aspects of support that your company may have come to expect from your current support offering, like Message Processing, Mission-Critical Support, and Remote Services, will not be provided under PSLE.
Have You Negotiated PSLE?
Similar to how SAP positions other commercial offerings, when it positions PSLE, it does so in a way to make it appear non-negotiable. However, based on our experience supporting and negotiating many of our client’s conversions to PSLE, just like every other commercial offering from SAP, PSLE is in fact negotiable. SAP has agreed to lower levels of commitment to achieve the PSLE threshold.
Are You Comfortable Committing to a Certain Level of Spend in Perpetuity?
Once you make the commitment to PSLE, your agreement with SAP will contractually bind you to a certain level of spend each year. If you drop below that level of spend, you will expeditiously lose your right to the reduction in the support factor by 5%. Therefore, it is important that your company is comfortable committing to that level of spend with SAP in perpetuity. For example, if your On-Premise relationship and MaxAttention relationship make up your commitment and you chose not to renew MaxAttention, you will need to make up that spend elsewhere.
Are You Leveraging This Commitment to Re-Negotiate Your Agreement?
SAP typically positions PSLE when a customer is in the throws of a negotiation and it is positioned as an opportunity to sweeten the deal. Despite this tactic, we recommend revisiting your agreement for commercial improvement opportunities. When you make the commitment to PSLE, it should not be the only commercial item on the table. You should be leveraging this opportunity to renegotiate your agreement and aspects like your future discount option, exchange rights, etc.
In the end, not every company will see a proposal from SAP to make the change to PSLE. But if you do, keep in mind that it is certainly a commitment that cannot be taken lightly, as it includes an obligation to a certain level of spending in perpetuity. We recommend reaching out for a discussion on whether PSLE will meet your needs and whether the PSLE-related commercial terms SAP is positioning are competitive.
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