SAP's Hana and Licensing 101

About three weeks before CeBIT, I found a very interesting hardware offer on www.saphana.com (see web screenshot). I called the server "white knight", naturally because of the color, but also because of its unannounced appearance.

The server is an OEM product from IBM, equipped with all the insignia of hardware from Walldorf. At the SAP press conference at CeBIT, I asked Co-CEO Jim Hagemann Snabe about the reason for a server with Hana lettering and the SAP logo.

Here is his answer:

"When we defined our strategy in 2010, there was a general IT trend for software companies to enter the hardware business. We made the decision back then not to become a hardware company.

We took this step for two reasons: Firstly, because we continue to focus on what we do best: We are the market leaders in business software and with our innovations we are faster than the competition.

We have achieved these successes because we have focused on software. Secondly, we believe that our customers want freedom of choice. We specify the hardware for Hana in great detail so that many partners are able to deliver it.

This guarantees that the hardware perfectly meets the requirements of the software. We have eleven partners who supply hardware for Hana.

We won't be getting into the hardware business ourselves. We help to get the software onto the hardware - we support pre-installed systems."

It remains with the white knight, because there was no more information about the offer on saphana.com.

On January 10 of this year, SAP presented the Business Suite powered by Hana. In Palo Alto, CTO Vishal Sikka was asked whether platforms other than the familiar Intel Xeon configuration would be used for Hana.

At first, Sikka hesitated to answer, but then he said that an IBM Power server could also be a Hana platform. It has since become known that a Power server has been installed at the Hasso Plattner Institute in Potsdam.

It was only natural to ask Co-CEO Snabe about this too. "We are open and we have a close partnership with IBM. But Hana takes advantage of so many benefits of a modern computer architecture and we spent a lot of time with Intel so that the processors not only work optimally with Hana, but also have specific instructions for Hana. You can't make something like that happen overnight.

It's an important aspect of performance that Hana is perfectly tuned to the hardware - without us being a hardware company. We are working with IBM to see what is possible on the PowerPC platform - but that will take time and effort. It won't take us off track to have an optimal Hana box from different vendors in the market."

The sword of Damocles "used software" hangs over SAP and the entire software industry. The Co-CEO's view on this is also very revealing: he simply denies the necessity. His statement from CeBIT:

"Software is different from a physical product. The value of software lies in its use. Let's imagine that you use the software for a few years and then decide not to use it anymore.

It has generated added value over the past few years. But what is the value of the used software? Certainly less than the value achieved through the right of use.

At SAP, we have a very broad offering and we normally bundle numerous functions into a few priced components that our customers can use in their entirety. Of course, there are functions that are hardly used - but can you ask for money back because of that?

The idea of pricing software is a holistic one. For me, the question is a completely different one anyway: Are we creating added value for our customers every day again?

And if our software creates value for our customers, then these satisfied customers will buy more licenses from us. Our goal is to bring more added value to our customers with our software."

Every existing customer will probably agree with Mr. Snabe, but it was not an answer to the issue of used software. A German company has sued SAP regarding the interpretation of the general terms and conditions and the recognition of used software licenses. The story continues.