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SAP Unveils First-of-Its-Kind Pricing Model

Tuesday, 17 April 2018, 05:28 Hrs

Driven by unprecedented collaboration with user groups, customers, partners and industry analysts, SAP SE (NYSE: SAP) recently announced a new sales, audit and pricing model for its Digital Access licensing policies commonly known as “Indirect Access.”

The new approach makes it easier and more transparent for customers to use and pay for SAP software licenses. It also differentiates between Direct/Human and Indirect/Digital Access, while clarifying the rules of engagement for licensing, usage and compliance.

Christian Klein, COO and Member of the Executive Board of SAP SE, Global Business Operations says, “We believe that especially in the age of digital transformation, an adjustment was necessary after listening to our customers. By offering a new pricing and licensing model, we provide enhanced transparency, predictability and consistency to our customers. I trust that these three aspects will encourage our customers to continue to invest in digital business models.”

New Pricing Model

The new model – a first of its kind for the enterprise software industry – addresses challenges faced by some customers when it comes to pricing for Indirect/Digital Access.

Historically, for most use cases, customers primarily had the option to pay for the SAP ERP application based on the number of users. As more systems began to access SAP software systems, this created a challenge for customers, who asked for an alternative pricing approach.

Moving forward, SAP will differentiate between:

  • Direct/Human access (existing), which will be charged for by number of human users.
  • Indirect/Digital Access: Access via third party, Internet of Things (IoT), bots and/or other digital access that can be licensed based on transactions/documents processed by the system itself (new).

Major features of new pricing model includes:

  • SAP’s new model pertains to the digital core – SAP S/4HANA and SAP S/4HANA Cloud – as well as the SAP ERP application.
  • Existing customers can choose to remain on the current model or move to the new document-based pricing model – whichever best fits their SAP solutions and digital transformation initiatives.
  • Conversion offerings are available to help customers who choose to move from current pricing to the new model.

Clear Separation of License Sales from Audit and Compliance

Customers and SAP have sometimes struggled to reconcile older commercial agreements with the requirements and outputs of modern digital activity levels. Combined with ongoing discussions regarding the procurement of new software, this can sometimes cause frustration.

SAP also introduced new organizational changes that separate license sales departments and procedures from auditing departments and procedures. The organizational change will allow the two conversations to develop independently of one another, empowering customers and SAP customer-facing professionals to collaborate more freely.

SAP plans to introduce features that will enable customers to measure their own usage and license consumption in a self-service manner. Geoff Scott, CEO, Americas’ SAP Users’ Group (ASUG) shares, “I commend SAP for entering into an open and thoughtful dialog with its customers regarding licensing. We have made tremendous progress on many important topics that we are announcing today and providing additional details and insight in the coming days. I am looking forward to hearing the feedback from the community as we continue this important journey with SAP.”

SAP began rollout of the new licensing, sales and audit policies in April 2018. SAP will continue to provide educational resources and tools for customers in the coming months to help them fully understand the new licensing approach and decide on the right model for them.