Forward, Always Forward

This is a long and complex discussion in the software industry: can software ideas be patented? What counts as intellectual property? Are one-time licenses or subscription models the right way to move forward?

In the SAP community, the discussion about appropriate compensation for services has begun with the topic of indirect use: what used to be available free of charge for every SAP customer now must be paid for. SAP wanted to charge for the use of ERP functions outside of a licensed system, which created a new field of activity for computer scientists and lawyers.

Of course, SAP was largely able to enforce its own legal opinion because, as the global ERP market leader, it enjoys a monopoly position. The issue of indirect use has been resolved in terms of licensing, but it still hangs like a sword of Damocles over the heads of SAP customers. The discussion about the justification and usefulness of indirect use is therefore not over, which in many cases hinders and impedes digital transformation. Did SAP do itself a favor with the indirect use licensing model? What boosts license sales on the one hand can be an obstacle to ERP innovation on the other.

In addition to indirect use, there is another construction site at SAP where the pendulum swings between market conquest and license revenue. In an interview with the German weekly magazine Wirtschafts Woche, Hasso Plattner said that the Hana database should shake up the entire market because, in his opinion, it was the best database of 2011. Hana’s quality is debatable, but with Hana's current licensing model, this database would never have had a chance in the open market—a public domain model would have been required.

Obviously, SAP's Chief Technology Officer at the time, Vishal Sikka, and Hasso Plattner disagreed on the final positioning of Hana. In addition to the well-known license model and the mandatory requirement for S/4, there was also the idea of releasing parts of Hana to the IT community as public domain. 

However, things turned out differently: Vishal Sikka left SAP as Chief Technology Officer. SAP achieved good license sales with Hana. Outside the SAP community, Hana plays no role. Within the SAP community, every S/4 user must run the Hana database, which in many cases means double database fees without double the benefit. A public domain model, on the other hand, would have opened the possibility for Hana to establish itself as an enterprise database and replace Oracle, IBM DB2, and Microsoft SQL Server as a whole.

The mandatory Hana measure for S/4 users is generating good license sales for SAP, but it is not certain that this development will continue in a linear fashion. Technically, it is conceivable that generative AI will produce a Hana clone in the coming years that will be available as open source. There is nothing in computer science that cannot be simulated and cloned. In the end, it is always a question of effort and cost-benefit. Hana does not need to remain the only database for S/4.

With the Business Technology Platform, SAP seems to want to profitably use the Hana concept a second time. Once again, an expensive platform is being created that will become a mandatory measure for many SAP customers. Although the BTP uses some open source components, the platform remains an expensive product that requires a license. Once again, there is a risk that an SAP product will not be able to achieve universal validity, but will remain an auxiliary tool for core ERP tasks. A public domain model for BTP, on the other hand, would put this platform on a par with other IT tools, allowing it to shine far beyond SAP's boundaries. BTP could be managed, developed, and billed in much the same way that Red Hat and Suse are leading the way with Linux in the enterprise. I am for a public domain BTP.