DSAG Investment Report 2020: plenty of revenue for SAP

"The generally high willingness to invest is a remarkable sign in the generally tense overall economic situation. However, this obviously does not apply to all sectors. 24 percent of respondents from manufacturing companies said their budgets were falling.

"This could be related to the fact that, due to the economic development, companies from the automotive industry, for example, are still somewhat more cautious about the future, despite digitization."

is how Dr. Marco Lenck, Chairman of the Board of DSAG, assesses the figures.

An E-3 analysis of the current SAP price list (PKL, Preis- und Konditionsliste) clearly shows why investments have to increase for existing SAP customers: The functionality of many SAP software components is being continuously reduced.

SAP NetWeaver Engines, which used to have a high number of functions, are now specialized for individual tasks. However, this specialization of many SAP software components requires a higher number of SAP software.

The need to license more SAP software to achieve a similar level of functionality as in the past also results in a higher SAP budget for most existing SAP customers.

Accordingly, more financial resources for the SAP area does not have to mean that SAP's existing customers are now investing more in innovative topics such as IoT, AI or SAP's Leonardo.

Most of the budget funds will probably be required for SAP operations, which are once again more expensive, because in addition to more expensive SAP software with less functionality, SAP consultant prices on the market are naturally also rising as a result of the S/4 transformation.

The transformation to the new ERP should be completed by 2025, and there is already a shortage of specialists and external consultants. Personnel costs are rising, which also requires a higher IT/SAP budget.

In some cases, existing SAP customers are able to buck the trend of expensive SAP software: Many years ago, Gartner analysts already recommended that old SAP software contracts should not be terminated under any circumstances.

Old SAP contracts still contain NetWeaver Engine licenses and Professional User licenses with very extensive functions. These old licenses are still valid if you, as an existing SAP customer, have not signed any new General Terms and Conditions (GTC) in the meantime.

With old licenses and good license management, high IT costs can be avoided now and in the future, and the increased SAP budget can be used for innovative tasks.