Microsoft and other global ERP firms are in big trouble with Turkish companies

Microsoft and other global ERP firms are in big trouble with Turkish companies

Global ERP brands in Turkey not only disadvantage local companies when they face system-related problems, but they also negatively impact the end-user and gravely damage the local economy

News Service Yeni Şafak

A large number of companies in Turkey find themselves forced to accept astronomical and often unreasonable licensing and maintenance fees imposed by global ERP firms in order to acquire their integrated systems despite widespread and well-documented complaints of privacy violations and inadequate technical support.

Problems caused by the reliance on foreign ERP firms severely damage local economies

Global ERP brands in Turkey not only disadvantage local companies when they face system-related problems, but they also negatively impact the end-user and gravely damage the local economy.

In Turkey, dominant giants in the ERP sector such as Microsoft Dynamics 365 and SAP monopolize the market, imposing arbitrary conditions at whim by taking advantage of the lack of alternatives, which enables them to act with complete disregard whenever local companies ask for feedback or technical support.

Another hindering factor is the high cost of switching ERP systems later on, which would require companies to reapply for licensing and setup, placing added financial strain on the companies in their bid to replace the heavily integrated systems, forcing them to submit to the unjust conditions unilaterally imposed by these global ERP companies.

In addition to fixed rate licensing fees, Global ERP firms charge companies an annual sum in exchange for maintenance and system upgrades. If such multinational firms were to hike the price of said upgrades, they can easily impose them unilaterally without notifying the second party as per the signed contracts.

Price hikes due to currency depreciation

Since licensing and maintenance contracts with global brands are often drawn up in USD or Euro, this allows ERP giants to unilaterally impose price hikes in the case of any fluctuation in exchange rates, which is what Microsoft did in 2018 when the IT behemoth increased the prices of its products in Turkey by 10 to 24 pct.

This has dealt yet another massive blow to local firms that were already struggling to cope with the currency crisis.

Companies at the mercy of Microsoft’s whims and arbitrary measures

As previously noted, it could be very hard for companies to break their years’ long dependence on integrated systems belonging to global ERP brands, which view themselves as sector monopoles who have the final say in the market.

Leading sector brand Microsoft put companies that use their ERP system under unnecessary financial strain when it unilaterally and without prior notice decided to redefine companies using its brand as “Named-users” after retiring the former “concurrent user” label, and in the process overcharged local firms with additional price hikes and new licensing fees that they now found themselves forced to pay.

Up to 5 USD compensation for disrupted service!

While companies are required to pay millions of dollars for licensing and maintenance fees stipulated in contracts signed with global ERP brands, these very same contracts state that these ERPs only have to pay compensations that sometimes only amount to 5 USD in the case of their failure to meet their contract requirements.

Take for example Microsoft’s licensing terms, the contract blatantly states that companies cannot recover direct damages of more than 5 USD from the sector giant.

Global ERP brands have no problem evading responsibility

Another problem faced by local companies when dealing with global ERP brands is inaccessibility. Contacting customer service could cost companies days of inoperativeness as they scramble to get a hold of an ERP representative through the appropriate channel.

Turkish representatives of global brands are more than happy to refer customers to the global office when presented with a request for technical support, often relinquishing all responsibility and leaving local companies struggling to communicate with brand’s global troubleshooting service.

An additional hardship faced by local firms is the prolonged waiting periods, which could sometimes span days, before receiving feedback and solutions from global ERP brands for problems that local firms might be experiencing such as various system malfunctions.

Global brands seize all private information

Global brands will continue to collect users’ private information so long as local companies continue to rely on firms from abroad.

However, companies working in vital sectors have the luxury of limiting access to their data or even refusing service, since paying a compensation fee of 5 USD would not constitute a problem for them.

Defense industries as a role model

Defense industries in Turkey, aided by the government, have recently made big strides in nationalizing 70 percent of defense products as they cut their reliance on foreign-made parts and move towards complete self-sufficiency.

A local alternative could help save local companies from the clutches of global ERP brands

Locally and nationally-developed ERP alternatives would help ween local companies off their dependence on global brands and their arbitrary fees, through building a tailored and customizable structure that caters to the needs of the local market, one that is capable of offering solutions to the mobile and web needs of the Turkish market.


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