When most people think about installed SAP software, they nearly always jump to the uncertainty of the total cost associated with a given deployment, customization and roll-out (not to mention ongoing support). Yet as we all know, installed software can have its benefits, especially when it comes to absolute data privacy/controls, customization, and system-to-system integration. Still, in an increasing number of cases, the SaaS total cost argument is winning out over installed software. But this isn't to say there is not innovation left in installed pricing models. In fact, a very uniquely packaged offering -- a first of its kind -- from SAP and Bristlecone in the spend analysis, performance management, diversity and risk areas is attempting to break the total cost mold for non-SaaS software by delivering capabilities through implemented fixed-price bundles.
Bristlecone, an SAP implementation partner, is more than just an SI. They were a key developer of SAP's Spend Performance Management application, a next generation spend analysis solution. SAP Spend Performance Management combines the IP behind Analytics', Inc. cleansing and classification strength (acquired by SAP), serious heterogeneous data acquisition capability (from SAP, third-party system and third-party sources), one of the best UIs in the market for data analysis and visualization (which looks completely unlike anything you've seen from SAP before) and expanded capabilities beyond basic spend analysis that include risk (including internal risk fields plus external third party risk indicators) as well as rudimentary supplier performance management (SPM) capabilities.
The new offering between Bristlecone and SAP packages these capabilities into a fixed price installed software offering, providing a single price for all associate software, services and content. Customers can choose how much spend they want to put through the system, driving visibility down to the item level. This approach contrasts with certain other solution providers who price spend visibility in whole or in part on enterprise size/total spend. SAP and Bristlecone tier pricing in the following manner:
- $1.5 billion in spend analyzed
- $1.5-$3.0 billion in spend analyzed
- $3-$4.5 billion in spend analyzed
The price points for these data tiers, which include ongoing or one-time data enrichment (basic, diversity, risk, etc.) depending on area, are $340K, $620K and $790K respectively (standard SAP maintenance/support costs apply on top of this). These prices include a perpetual license, all implementation costs, and initial data cleansing and enrichment along with data acquisition from a "reasonable number of company source systems."
Additional spend refreshes are done for additional fees (at what appear to be very competitive market rates). To the best of our knowledge, this is the very first time that SAP has ever allowed organizations to buy all of the implementation components -- not to mention content -- of a software application (including the software itself) on the company price sheet in a fixed price manner.
Stay tuned for Part 2 of this post, where we'll analyze the components of the offering and other details surrounding it in more detail. And if you want to see how SAP's Spend Performance Management application stacks up to the competition, check out a recent Spend Matters Compass Report on the subject that compares SAP's new spend visibility toolset with the competition: Discover if SAP's and Oracle's Spend Management Capabilities Are a Fit With Your Own Technology Plans (Part 1)