E3 Roundtable: SAP licenses - FUE, indirect use, BDC etc.

Anyone who takes an investigative look at the current licensing strategies of the Walldorf-based software group will quickly realize that the much-vaunted path to the cloud is less a technical liberation for existing SAP customers and more a commercial constraint. At the heart of this change is the Rise with SAP program, which rigorously pushes companies from an investment-based on-prem model with perpetual purchase licenses to a pure, subscription-based rental model. For the critical IT decision-maker, this reveals a dramatic loss of digital sovereignty, as customers are irretrievably giving up their valuable software property with the so-called contract conversion.

To make matters worse, SAP does not actually have a practicable cloud exit strategy; if the customer cancels the subscription, they immediately lose the right to use the application logic and end up with nothing but worthless raw data. In addition, the cloud licensing model based on Full Use Equivalents (FUE) harbours massive financial risks, as licenses in the SAP cloud are no longer measured according to actual usage, but according to the authorizations assigned in the system, which can drive up IT costs by an alarming 50 to 150 percent without a strict redesign of historical role concepts. Whether users opt for the standardized model of the public cloud or a private cloud does little to change the fundamental problem that they end up in a permanent and often difficult-to-calculate financial dependency.

At a technological level, SAP flanks this vendor lock-in with the SAP Business Technology Platform (BTP) and the SAP Business Data Cloud (BDC), whose licensing mechanisms turn out to be opaque in ERP reality. BTP is billed via consumption-based models such as the Cloud Platform Enterprise Agreement (CPEA) or the newer BTP Enterprise Agreement (BTPEA), under which cloud credits purchased in advance expire at the end of the year if they have not been consumed on time.

However, if consumption exceeds the prepaid quota, the dreaded cloud bill shock threatens due to undiscounted list prices for overuse. No less explosive is the situation with BDC, which is now aptly criticized by the DSAG user association as „Business Data Complexity“. Here, SAP drastically regulates cross-system data exchange, for example with hard limits of 2,000 OData API calls per gigabyte of compute memory, which Walldorf can penalize by imposing severe additional charges if exceeded.

Looking ahead to the announcements surrounding the „Autonomous Enterprise“, SAP Business AI and autonomous Agentic AI, this aggressive monetization continues. SAP is evidently using artificial intelligence and assistants such as Joule as exclusive leverage, as these innovations are almost exclusively made available to customers with Rise or Grow contracts in the cloud, while traditional on-prem users are de facto excluded from ERP evolution.

This strategy is flanked by an extremely restrictive new API policy that strictly controls and regulates access to SAP data by external, generative AI agents. For SAP, the automation power of Agentic AI also creates an existential dilemma based on the principle of the innovator's dilemma: if intelligent AI agents take over work in the near future and make human SAP workstations obsolete, the traditional business model based on user licenses will inevitably collapse. Analysts and industry experts are therefore inevitably assuming that SAP will have to switch its license network from fixed subscriptions to result-oriented pay-per-AI usage models in the future, which will siphon off the return on automation and turn the use of artificial intelligence into a completely incalculable, permanent cost trap for existing customers.