All are on S/4

S/4 Enterprise Management for ERP

The exact wording from the SAP price list is: SAP S/4 Hana Enterprise Management for ERP customers (# 7018538). This is the well-known 9000 euro S/4 flat rate, with which SAP existing customers buy the right to choose between Contract and Product Conversion. This item no longer exists in the SAP PKL Q2/2023, which is why SAP existing customers without a flat rate lose the right to Product Conversion.

In a very readable article by SAP licensing expert Lorenz Müller of HiSolutions (Berlin) in the upcoming E-3 June 2023 issue, the new situation is discussed in detail. Lorenz Müller writes: During a grace period of 90 days until July 16, 2023, companies can continue to purchase the SAP S/4 Hana Enterprise Management for ERP customers flat rate (# 7018538), even though it is already no longer included on the SAP price list.

Product or Contract

In a roundtable discussion at the E-3 video studio licensing experts Dr. Jana Jentzsch and Dr. Michael Sandmeier explained what this could mean for SAP's existing customers. Click here to go directly to the recording of the discussion in the E-3 YouTube channel. Product Conversion doesn't have to be the better path to S/4 for every existing SAP customer, but anyone who doesn't have the 9,000-euro flat rate by July 16 is missing out on the chance to choose, because then the only option left is Contract Conversion.

This often becomes really expensive, writes Lorenz Müller of HiSolutions in the E-3 June issue and continues: The change from the previous usage-based licensing to the new authorization-based licensing dramatically increases the licensing requirements for many customers. Previously very generous authorization models often cannot be changed, or can only be changed at great expense. Or there are individual absolutely necessary authorizations that require expensive license types.

SAP's Thumbscrew

Experts from the SAP community agree that this change in the price list is only the beginning of a new corporate policy at SAP. The conciliatory "cloud first" and the charming hybrid idea from last fall are increasingly giving way to the dedicated "cloud only".

Even if "cloud only" is wishful thinking on the part of the three SAP board members Christian Klein, Jürgen Müller and Thomas Saueressig, SAP's existing customers will have to fight even harder for their on-prem and hybrid systems. The SAP Executive Board is even ignoring concerns and warning cries from within its own ranks. Hardly anyone wants to denigrate a "cloud only" idea, but SAP is not yet ready: Cloud ALM exists more as a vision than as a product.

Application Lifecycle Management

Automated testing in a public cloud is still far from working at SAP, even if SAP partner Tricentis claims the opposite. A complex ERP landscape consisting of development, test and production systems is not yet prepared for this. Whether Christian Klein will listen to the internal critics and take the warning seriously will become clear later this year. In any case, the private cloud (on-prem) seems to be the safer route if the existing SAP customer has the right license agreements.