One step forward, two steps back

Rarely before has the SAP community been as divided as it currently is on the S/4 cloud transformation. While SAP CFO Luka Mucic was jubilant about the supposed successes in the cloud when he presented the Q2 figures - "We can look back on another strong quarter of accelerated growth for SAP's cloud portfolio. Customer demand was exceptionally good. We are therefore raising our outlook for revenues and operating profit" -, SAP's existing customers obviously disagree, as the user association DSAG announced in the conclusion of a recent survey: The majority of DSAG members will continue to rely on S/4 Hana on-premise in the future.

Only just under half of the respondents have a positive attitude toward the cloud, and another quarter are neutral. The greatest challenges currently arise in the licensing models and costs. In the German-speaking market, therefore, not only does cloud appear to be a little accepted operating model, but the S/4 transformation is also stalling due to the uncertainties surrounding the cloud licensing model FUE, Full User Equivalent.

It is therefore not the technical release change that SAP existing customers fear, but the higher maintenance fee and the expensive cloud subscriptions according to FUE. The Full User Equivalent is a key to how existing on-prem licenses must be converted into cloud subscription licenses.

Without consolidation and precise license knowledge, this can result in new base amounts that are between 20 and 50 percent higher than the on-prem license base. E-3 Magazine will produce a special on the topic of license management in November, followed by a roundtable of experts and authors as a livestream.