Money Makes the World Go Round, the monetization of SAP license management. (EN)
Shownotes
The digital transformation of core business processes is tirelessly celebrated by the Walldorf-based software group SAP as a limitless, agile and cloud-based ERP paradise, but a critical analysis of the contractual realities reveals this promise to be a highly complex strategic constraint that forces existing SAP customers into an unprecedented vendor lock-in.
At the heart of this tectonic shift is the paradigm shift from the classic, property-based on-prem model to a cloud subscription model, flanked by an opaque price and conditions list (PKL), new API restrictions and the rigorous monetization of data streams.
For existing SAP customers, the switch to S/4 Hana no longer means a technical release upgrade, but a fundamental realignment of their commercial IT architecture, where the risk of cost explosions, over-licensing and the total loss of digital sovereignty is a constant companion. Anyone who fails to deconstruct the mechanisms of SAP Cloud Subscription, the Business Technology Platform (SAP BTP), the Business Data Cloud (SAP BDC) and the new licensing metrics down to the smallest detail will inevitably fall victim to a masterfully orchestrated monetization machine.
SAP's historic transition to the cloud world, primarily driven by the all-encompassing Rise and Grow contract packages, marks a complex shift from capital expenditure (capex) to ongoing operating expenditure (opex) for ERP users. While on-prem licenses were acquired as perpetual property and guaranteed the ongoing, legal right to use the system even if the maintenance contracts were terminated, the cloud subscription degrades the customer to a defenceless tenant.
SAP is converting existing on-prem licenses into cloud subscriptions via contract conversion, which leads to the irretrievable destruction of the old, valuable purchase licenses. The central instrument of this transformation is the Full Use Equivalent (FUE) metric, a highly complex set of rules that presses the previous detailed usage-based user allocation from the ECC world into standardized cloud usage types.
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