The SAP Support and Maintenance Series – Part 2 of 3 – What are Software-related Services?
What exactly constitutes Software-related Services? [Sourced from the SAP Annual Report 2008 - On Form 20F - The SAP Portfolio]
SAP categorizes software-related services into four buckets; Custom development, Support services, On-demand software services and Managed services.
Custom development as the name suggests implies building new developments, extensions and enhancements on the SAP platform to address unique customer requirements which otherwise cannot be met by the standard offering.
Support services include support to the customer through the complete lifecycle of the implementation – before, during and after. This involves round-the-clock technical support, as well as proactive and preventive support services. It can vary from SAP Enterprise Support (involves holistic IT landscape support with the aim of optimizing operations, based on defined service level agreements), SAP Product Support (provides day-to-day support needs), SAP Safeguarding (aims to mitigate technical risks during implementation and upgrade) and SAP Max Attention (includes technical account management from SAP).
Managed Services, depending on the customer contract can come either under software-related services or professional services and other services. Either ways, the idea is the same – SAP provides application management services, hosts and runs solutions for customers.
(As an addendum to the previous blog – 1.1 Looking into the financials – one should also note the high margins that this line of business generates – According the Q3 2009 report the margin from Software and Software Related Services revenues is more than 78%) Next up – What options do customers have?
