S/4 Hana: The midmarket is rightly unsettled

The SAP price list for the S/4 Hana area today comprises more than 300 lines. The price and conditions list is a work in which 209 pages describe how the different licenses are to be valued.

Price list options such as Digital Access and SAP OpenHub not only unsettle the installed base, but also those interested in SAP software. For existing customers, these issues should be critically examined and clearly regulated with the respective license partner, especially when switching to the new software generation.

Countless providers are signaling their support and promising transparency in determining future license costs. Unfortunately, neither SAP's sales department nor the partner landscape of the SAP system houses consistently deals openly with topics such as the connection of third-party systems.

Many SAP partners have avoided the issue of indirect access for years and should urgently ensure clarity here among the existing customer base.

For many companies, S/4 Hana certainly continues to offer the best basis for business management processes; each company should only critically examine SAP's licensing metrics for its own use case in this context.

In our view, it is perfectly legitimate for SAP to charge for the digital use of its software, provided that the added value for the respective process is given. However, the billing metric should not prevent new business models, the optimization of processes, or new sales channels.

In these areas, we have unfortunately had to identify cases in recent months that would have had to cope with numerous risks here without external support. An online store is part of good form for many companies.

However, the online trade of goods of any kind does not always have to be supported by solutions from SAP. Whether Woo on the WordPress platform or one of the numerous other solutions on the market - using third-party solutions should not entail extreme licensing costs, especially if only the posting is done in SAP ERP (S/4 Hana).

IoT is important for the German economy! And SAP in particular, as the only German IT company with a global reputation, must not create any obstacles here for the German economy.

With Hana, SAP offers a great database that should not be limited in its use by the license model. It would be important here that the generation of data does not lead to license costs. If the benefit for companies is given, however, all parties involved should be allowed to profit, and this of course also includes the manufacturer of the software.

The software licensing model must always be based on the framework conditions of the respective industry or market, and here the new Executive Board still has considerable tasks ahead of it.

If we take the example of a component in electronics and refine this using the Digital Access pricing model or evaluate the spare parts trade of a classic mechanical engineering company, SAP must check the pricing model in the standard.

Let's take a company that wants to offer its spare parts, which cost a few cents, via a store and only achieves 100 sales via this channel per year. In this case, over a five-year period, the software costs per line item would be one euro, thus inhibiting the digitization process. Especially in the case of new sales channels or new business models, this issue must therefore be clearly regulated in advance with the respective licensor.

For existing customers, we therefore understand the irritation and would like to see other solutions that take the business context into account. In many cases, however, we have also heard from the market that satisfactory solutions could be found for both sides in an open discussion.

SAP customers who have additionally relied on third-party applications in recent years are faced with significant demands and must pay attention to numerous other issues, such as Hana full-use or renovation of the authorization system, as they rebuild their landscape.