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S/4 Hana: The midmarket is rightly unsettled

SAP does not come off well in terms of communication about its licensing strategy. Many decision-makers rate SAP's information policy as rather poor.
Tobias Wahner, Just 4 People
February 27, 2020
Content:
Licenses
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This text has been automatically translated from German to English.

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.

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Tobias Wahner, Just 4 People


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Work on SAP Basis is crucial for successful S/4 conversion. This gives the so-called Competence Center strategic importance among SAP's existing customers. Regardless of the operating model of an S/4 Hana, topics such as automation, monitoring, security, application lifecycle management, and data management are the basis for the operative S/4 operation. For the second time already, E3 Magazine is hosting a summit in Salzburg for the SAP community to get comprehensive information on all aspects of S/4 Hana groundwork. With an exhibition, expert presentations, and plenty to talk about, we again expect numerous existing customers, partners, and experts in Salzburg. E3 Magazine invites you to Salzburg for learning and exchange of ideas on June 5 and 6, 2024.

Venue

Event Room, FourSide Hotel Salzburg,
At the exhibition center 2,
A-5020 Salzburg

Event date

June 5 and 6, 2024

Tickets

Early Bird Ticket - Available until 29.03.2024
EUR 440 excl. VAT
Regular ticket
EUR 590 excl. VAT

Secure your Early Bird ticket now!

Venue

Event Room, Hotel Hilton Heidelberg,
Kurfürstenanlage 1,
69115 Heidelberg

Event date

28 and 29 February 2024

Tickets

Regular ticket
EUR 590 excl. VAT
The organizer is the E3 magazine of the publishing house B4Bmedia.net AG. The presentations will be accompanied by an exhibition of selected SAP partners. The ticket price includes the attendance of all lectures of the Steampunk and BTP Summit 2024, the visit of the exhibition area, the participation in the evening event as well as the catering during the official program. The lecture program and the list of exhibitors and sponsors (SAP partners) will be published on this website in due time.