SUG-UKI: Transparent Pricing and Licensing

November 23, 2010 by Christoph Zeidler

Jim Hagemann-Snabe about Licensing and Pricing (Foto: Christoph Zeidler)

Jim Hagemann Snabe about licensing and pricing (photo: Christoph Zeidler)

While the focus in 2009 was still mainly on the issue of maintenance and SAP’s ability to invest, this year’s event has shown that the company’s flexibility in reintroducing SAP Standard Support and its product push have soothed seething users, eliciting constructive criticism where once was anger. Other difficult subjects are now on the agenda, however – chief among them questions of pricing and licensing.

Much expected from SAP’s co-CEOs

Alan Bowling, chairman and director of the U.K. & Ireland SAP User Group (SUG-UKI), used his opening speech to underline his support for SAP’s strategic orientation under its two CEOs, Bill McDermott and Jim Hagemann Snabe.

“Having two CEOs has always worked well at SAP, and with Jim Snabe in charge of its products, the company is ideally equipped for the future,” Bowling stated. “We’re very happy to have Jim with us today, as he stands for the innovation and solid products we’ve come to expect from SAP.”

While SUG-UKI welcomes the dual-CEO format with open arms, Bowling went on to say that the organization would remain critical in its support.

On the one hand, he described SAP’s growth targets as key to ensuring its ongoing ability to meet its customers’ needs. “As a user group, however, we’re going to make sure that no one reaches into our pockets without delivering real value,” Bowling asserted.

Meanwhile, Bowling stated his intention to work with the SAP User Group Executive Network (SUGEN) on repeating the success SAP users have had with the issue of maintenance in other areas.

Along with SUGEN chairman Tonnie van der Horst and Greg Pike, head of Global Customer Communities at SAP, Bowling provided the delegates in attendance with detailed insights into how the maintenance discussions proceeded with SAP and how the company ultimately decided to make SAP Enterprise Support optional after all.

“We’d like to express our thanks to SAP for listening, sharing information, and working closely with us,” he said before turning immediately to the next issue: prices and licenses.

Read on: License models and pricing

Point of View: Craig Pike, Alan Bowling und Tonnie van der Horst (photo: Christoph Zeidler)

Greg Pike, Alan Bowling and Tonnie van der Horst about users' needs (photo: Christoph Zeidler)

License models and pricing

According to Bowling, SAP’s license model has been too complicated and its pricing methods too opaque since even before the acquisition of Business Objects. “Our message is clear: Users want more transparency in pricing,” he declared.

Bowling sees these issues as fundamentally tied to the complexities in SAP’s licensing: With the company expected to offer a mix of traditional, on-premise suite solutions and cloud-based, on-demand applications, customers need clear, comprehensible models now more than ever in order to plan their IT budgets.

“We need clarity and simplicity, not complexity,” Bowling said in summary. No small feat, considering the need to factor in both the costs of acquiring and maintaining  Business Suite applications and the monthly expenses of cloud solutions such as SAP CRM OnDemand, BusinessObjects BI OnDemand, and Business ByDesign.

Luckily, Tim Noble – managing director of SAP United Kingdom and Ireland – brought good news in this regard. The SAP Licensing Guide contains comprehensive information on the pricing and licensing model used for Business Suite and the BusinessObjects portfolio.

“In the end, the model simply reflects the way you consume our software,” explained Noble, who went on to state that while the complexity of IT landscapes does extend to other areas, SAP constantly strives to find licensing models that are best suited to each individual case.

“The customer ultimately decides into which licensing agreement to enter with us,” he pointed out. Noble also emphasized the daily effort he and the 1,200 other SAP employees in the U.K. and Ireland make to deliver more value to the company’s customers in the region.

Read on: Product strategy and road maps

road maps, road maps, road maps...

road maps, road maps, road maps...

Product strategy and road maps

Added value was also the primary focus of the speech SAP co-CEO Jim Hagemann Snabe held on his company’s strategy and vision.

Snabe listed the four pillars of SAP’s business: the on-premise applications of SAP Business Suite and the SAP BusinessObjects portfolio, on-demand solutions like SAP Business ByDesign, the on-device mobile solutions recently acquired through Sybase, and orchestration – that which ties everything together, helping customers to better manage their limited resources, access information more quickly, and interconnect their employees.

For Snabe, what holds in individual cases presents considerable potential when universally applied. “65% of all transactions in the world are somehow touched by an SAP system. With our technology, we want to help make this world run a little better,” he declared. Snabe recognizes that this involves certain responsibilities. “We make business software, not toys; that’s why we consider quality and stability priority one,” he affirmed.

Snabe admitted that balancing rapid innovation and product creation is not always easy, citing this as the reason why SAP has raised the bar even further with regard to quality. The company’s goal is to leave no customer need unfulfilled. “We bring innovations to market that offer our customers instant value and innovation without disrupting their core systems,” Snabe said.

Fine words, but what exactly do they promise? According to Snabe, one thing above all: a stable architecture that helps customers overcome obstacles to their business on all platforms and devices while delivering an ever-improving user experience. “We want to be a reliable partner,” Snabe assured those in attendance. “And we are committed to deliver value to your business.”

In the question-and-answer session that followed, Snabe specified in-memory technology and SAP High-Performance Analytic Appliance (SAP HANA) as the main innovations he believes will provide customers with unprecedented possibilities and change the industry for years to come.

He also announced SAP’s intention to clarify how this will affect its product development and further efforts as soon as possible in product and technology road maps, which are now available to all customers on SAP Service Marketplace.

This chance to achieve increased planning and investment security met with applause from those in attendance in Manchester. It was just one of several achievements the U.K. & Ireland SAP User Group had to celebrate after the event’s very first day.

Access current information and conference-related discussions under the Twitter hashtag #suguki10; you can also follow @sapinfo for our perspective!

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