Modern Pricing for Modern Times

There are a couple trigger points during the year that always make me reflect on the milestones of a year. My birthday tops the list for moments of personal refection. For those of us who work at SAP, SAPPHIRE NOW is our professional marker to reflect on accomplishments of the previous year.

Among the many topics that SAP has made progress on over the past year is one that we don’t talk too publicly about: Corporate Pricing and Licensing. We recognize that traditional approaches to business are being replaced by newer, more transparent, modern ways of thinking and acting. Which is why we are committed to modernizing our pricing approach.

Today’s technology landscapes are dynamic, interconnected and mission critical to the health and success of any business. In an agile world where digital reigns supreme, licensing complexity is getting in the way of innovation.

SAP is committed to modernizing its pricing approach

As we spoke to our user groups about how to specifically address this, the topic of indirect access repeatedly came up. Indirect access is a term created by our user groups to describe when a user accesses the SAP system via a third party or custom-made software. We decided to tackle this topic first through the lens of pricing modernization. Our objective was to make pricing predictable, linked to unit of value, transparent, and consistently applied.

So what did we do?

We looked first at the areas that would have the greatest impact on the greatest number of people. We found that approximately 80 percent of our ERP customers will benefit from our changes to just these three scenarios: Procure-to-Pay, Order-to-Cash, and Indirect Static Read.

Indirect Access Pricing Changes

  • We believe value is measured by outcomes. Therefore, our pricing model for the Procure-to-Pay and Order-to-Cash scenarios in ERP (ECC or SAP S/4HANA) will now be based on orders, a measurable business outcome for any business.
  • Indirect static read access reinforces that a customer’s data is yours. Just because the data was in the SAP system, does not mean you should pay to view it when it is outside the SAP system. Indirect static read is read-only that is not related to a real-time system inquiry or request and requires no processing or computing in SAP system. Indirect Static Read will now be included in the underlying software license – i.e. free of additional charge when a customer is otherwise properly licensed. SAP leads the pack in addressing customer expectations related to this scenario.

Changes are designed to focus on outcomes/value related to the use of SAP software and are available to customers via licensing/contract amendment.*

If you’re fully licensed, there’s no action for you. However, if you’re questioning whether you are under- licensed, let’s talk about it. We want customers to proactively engage us on this topic. SAP assures customers who proactively engage with SAP to resolve such under-licensing of SAP software that we will not collect back maintenance payments for such under-licensing. We will look at your specific circumstances when resetting your licensing agreement, including providing you the opportunity to receive credit for certain products you may have already licensed so you can update to the new metrics.

Does this address every indirect access scenario in the age of devices, IoT, and collaborative networks? Not yet. There is much more to do and we are eager to keep updating pricing scenarios to bring you greater value. It is, however, a step in the right direct toward pricing modernization.

Customers that want to win in a modern, digital world need a partner that is willing to reimagine their own processes to drive success in a digital economy. What I can assure every customer is that at SAP — with the unwavering support of CEO Bill McDermott and every SAP employee — is that your voice matters. When customers speak, SAP listens. In my view, that’s the hallmark of a world-class, customer-focused business.

Who could say it better than Bill McDermott? “We can evolve we can improve, and we will. SAP will remain a culture always in pursuit of excellence.”

Hala Zeine is SAP Corporate Development Officer

*Engage your Account Executive when questions arise. Though the changes to the pricing policy provide a consistent, globally-applied filter to the licensing discussion, every situation is unique and must be evaluated upon its own merits, in conjunction with a customer’s specific SAP contract.