SAP is the market leader in enterprise application software and is at the center of today's business & technology revolution. SAP software is in the enterprise market for a long time – close to 50 years now. The technology landscape and how customers consume and use SAP software - has undergone multiple changes. SAP Portfolio consists of SAP ERP, SAP S/4HANA, SAP BW/4HANA, SAP S/4HANA Cloud, etc. SAP software is modular and can scale in line with the customers' growing business needs. SAP provides several deployment options and licensing models to address different customer requirements. If you look at the following picture - there are mainly three core tenets of SAP Software Licensing.
Main Three Core Tenets of SAP Software Licensing
SAP Software Solutions
SAP software spans multiple lines of business such as customer engagement, manufacturing, supply-chain, people engagement, data management, spend management, etc. SAP solutions are tailored for 25 industries and different sectors. SAP offers SAP S/4HANA, SAP C/4HANA Suite, SAP Ariba, SAP Concur, SAP Fieldglass, etc. Also latest technologies such as AI, ML, IoT and Analytics helps SAP customers.
SAP Deployment Options
SAP provides deployment flexibility across the portfolio - SAP software may be deployed in an on-premise, hosted private cloud or public cloud environment.
Deployment options of SAP Software Solutions
SAP Licensing Models
To provide maximun flexibility options to the customers for their various deployment models, SAP offers three different licensing models: Perpetual, Subscription and Consumption.
Licensing models for SAP Software Solutions
Moreover, Enterprise Cloud Services (earlier known as SAP HEC/HANA Enterprise Cloud) allow ECS customers for bring-your-own-license(BYOL) model.
Example of Components of a Perpetual SAP Software License
Example of Components of Consumption-based License for SAP Software in a Public Cloud
Other Licensing Topics
Database Licenses
SAP offers a comprehensive range of database solutions which includes:
- SAP HANA
- SAP Adaptive Server Enterprise (SAP ASE)
- Third-party databases like Oracle, DB2, MS SQL Server.
Licensing for databases is based on deployment options and type of databases used; it can be categorized as per the following:
On-premise and Private Cloud Deployment
- Full-use Databases (SAP HANA, SAP ASE)
- Run-time Databases (SAP HANA, SAP ASE & Third-party databases)
Public Cloud Deployment
- SAP BTP/Business Technology Platform (earlier SCP/SAP Cloud Platform), SAP HANA Service
Database Licensing Options
Full-use Database License supports both SAP and non-SAP software based on gigabytes or CPU cores metrics.
Run-time Database License generally used solely to support software licensed from SAP only. It is priced as a percentage of the discounted net fees paid for SAP software.
SAP BTP(earlier SCP), SAP HANA Service is an advanced in-memory database fully managed across multiple cloud environments. It is available in subscription model and licensed on a gigabyte-of-memory metric with corresponding storage included.
Licensing Indirect Access to Digital Core
The new pricing approach differentiates between direct human access(pricing continues to be user based) and indirect digital access(pricing is based on the number of transactions, like documents, processed within the digital core).
For better understanding, please go through - How SRG Takamiya used SAP Digital Access software as a predictable and consistent way to pay for SAP software, enabling the company to save money and flexibly scale as its business grows.
Commercial Flexibility - Conversion Credit Policy & Extension Policy
SAP Conversion Credit Policy provides a commercial path for customers to move from existing perpetual SAP software licenses toward a perpetual license of the SAP software on a new metric or licensing model. Even SAP Extension Policy model supports the following:
- Cloud Extension
- On-premise Extension
SAP Software License Compliance
Using License Audit Tools (e.g. License Audit Workbench Tool) and License compliance Advisory Services, one can reduce the risk of an unexpected license gap or compliance issue. SAP offers License compliance Advisory Services on customer's request only.
LAW is a measurement and reporting tool. It makes plenty of assumptions - as a self-audit tool, its primary purpose is to provide a foundation from which SAP evaluates the potential for an additional true-up of license sales annually.
SAP's Global License Audit and Compliance organization (GLAC) offers SAP customers support regarding their SAP License entitlement and utilization.
GLAC Service Portfolio
Under its general terms and conditions, SAP has the contractual right to verify the customer's use of SAP licenses (on-premise and cloud) at regular intervals.
GLAC either ask the customer to start a measurement or for access to carry out the measurement jointly on the customer systems.
This article is primarily made for transparency into how SAP licenses its software and should help customers make informed and strategic software licensing decisions.
Please find the attached SAP document for more details - it is quite old but most of the parts are still relevant even today.
But if you have still some specific questions on related topics, feel free to contact your SAP Account Manager or SAP sales representative.
Picture Courtesy : SAP
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