Tuesday, March 13, 2012

SAP Mobility and the App Pricing Problem

SAP has a challenge.  After nearly two years the field sales still can't figure out how to organize consistent pricing on enterprise mobility.  Yes, I have been given many explanations by SAP on their pricing strategy(it does exist), but these details haven't seemed to trickle down to the field. When I talk to end customers and systems integrators (many over the past 14 days) they express frustration and say there is no consistent pricing.  As a result, many companies are finding it challenging to plan for and implement enterprise mobility.

In an analyst report that I recently wrote for insiderResearch titled Mobile Outlook 2012, only 32% of companies have an enterprise-wide mobile strategy that governs all applications and devices.  Without a mobile strategy in place, it is very difficult for companies to pull the trigger on large purchases of MEAPs (mobile enterprise application platforms) and MDMs (mobile device management) solutions.  In addition to the no-mobile-strategy challenge, there is the need to determine pricing for all of the mobility projects that are being requested so you can plan, budget and prioritize.  This can easily end up in a vicious circle.  No strategy and no-pricing equals barriers that will delay valuable mobility projects.

I spoke recently to a system integrator that is involved in many active enterprise mobility projects that are using SUP.  He said everyone of them have been given different pricing for SUP.  It seems the pricing is difficult to understand and communicate. I am not suggesting good clear pricing doesn't exist, it is just not getting translated to the field.

In a recent insiderResearch survey, participants (602 people completed the survey) were asked to identify their biggest challenges to implementing enterprise mobility solutions. Here are the answers:
The first four biggest challenges were:

  1. Developing a mobile strategy
  2. Identifying and prioritizing business cases
  3. Choosing a platform and mobile technologies
  4. Budgeting
Do you see why not knowing the price of mobility can be a BIG problem.  How can the business and the IT department even start implementing mobility with all of the uncertainty?

40% of companies report that enterprise mobility is currently being managed by each line of business, business unit or group without central management or oversight.  These groups won't wait for the corporate office to negotiate with SAP.  They will purchase their own mobile solution that provides them with clear pricing.

[March 22, 2012] Read the follow-up article titled More on SAP Mobile App Pricing.

Kevin Benedict, Independent Mobile Industry Analyst, Consultant and SAP Mentor Volunteer
Follow me on Twitter @krbenedict
Full Disclosure: I am an independent mobility analyst, consultant and blogger. I work with and have worked with many of the companies mentioned in my articles.