For Christian Klein, it's like squaring the circle. He should please his heterogeneous audience with a consolidated story, but the interests are too different. It's a compromise between existing customers, shareholders, partners and the public.
The shareholder is mostly interested in a profit distribution and possibly a share buyback program. The existing customer wants high investments in research and product development. The partners also want a piece of the pie and insist on transparency. The public expects socially responsible action. The orchestration of the various interests is the responsibility of the Board of Management and Supervisory Board.
One of the most important elements is a solid narrative. People also like to talk about "purpose" - naturally in a positive sense, not: The end justifies the means! This is where the fact-based narrative comes into play, because a narrative should not be an end in itself, but should provide orientation. The SAP community is in a conversion and everyone is looking for references and proof-of-concepts.
Naturally, the SAP Executive Board uses numerous facts for its narrative. What is missing, however, is a consolidated picture that takes all the facts into account and is communicated in a comprehensible way. In the SAP universe, there are currently several narrative threads that obviously do not fit together.
At the quarterly balance sheet meetings, SAP CFO Luka Mucic gushes about the growing cloud revenues, the upcoming growth and the expected revenue increases. The numbers are staggeringly high, making it obvious: This success can't come from new customers alone. So perhaps the rumor is true that cloud computing is much more expensive for existing SAP customers than on-prem.
SAP has created an Excel-based TCO calculator for the path to the cloud. One example shows that including investment costs plus a five-year term, on-prem operation with own licenses in the own data center will be the most expensive. If the existing SAP customer takes his licenses to a hyperscaler, it can be cheaper. Naturally, the cheapest option is a cloud subscription to SAP. In SAP's cloud, it should not only be possible to live carefree, but also cheaper.
Obviously, the viewer is faced with a contradiction here: Luka Mucic wants to continue to rapidly increase SAP sales with a cloud-first strategy, while SAP CEO Christian Klein has his existing customers calculate that SAP's cloud is the most cost-effective operating model. So here a doubling of revenue, there a halving of costs. The cloud TCO calculator for "Rise with SAP" is a promise to existing customers. If the figures are correct, the question is: How will Luka Mucic achieve his revenue targets?
The independent licensing experts reckon with other facts, and because at the end of the day it may not work out this time, one SAP partner is now offering license insurance against possible mismanagement. The number of underlicensings could increase due to a cloud conversion, and with it the risk of additional payments - which in turn would be logical to explain Luka Mucic's projected revenue increases. Someone will pay the piper if SAP wants to increase its revenue figures significantly and above the market average.
Apart from the TCO calculator "Rise with SAP", things look very good for SAP: Either the conversion to the cloud (full use equivalent) brings a higher subscription than the total SAP licenses and maintenance fees, or Luka Mucic calculates with the lock-in for existing customers. There is no cloud exit strategy at SAP!
Those who accept the "Rise with SAP" path, according to SAP's plan, follow their on-prem-
licenses are lost - so there is no way back. Without their own licenses, however, existing SAP customers are at the mercy of SAP's arbitrary decisions. If a cloud contract is renewed, the customer must accept SAP's price table. Of course, SAP CFO Mucic is not talking about the lack of an exit strategy, but only about better calculable revenues.
Any existing SAP customer with their own licenses can cancel maintenance with SAP and go to a third-party vendor to have their own SAP system maintained. But without licenses, the data becomes worthless, because data without associated business processes is junk. Thus, there are now also SAP partners who archive data as business objects, i.e. data plus algorithms.
No one has served up false facts here, but the orchestration is flawed. The narrative should thus be shaped less to one's own advantage. What Helmut Markwort said applies: think of the readers. Thus the request to Christian Klein and Luka Mucic: Facts, facts, facts and think of the SAP community. SAP's narrative should help and guide the community and create transparency and trust. The task is to rewrite the history of SAP in the cloud age!
