The intelligent enterprise technologies and capabilities embedded in the latest SAP enterprise applications such as SAP S/4HANA and SAP CX increasingly use the agile SAP Business Technology Platform.
If you’re a procurement advisor, business user or technology specialist then being up to speed with SAP Business Technology Platform is a must, not just from a technology point of view but also commercially – and that means getting to grips with the latest pricing models.
Looking at pricing options for SAP Business Technology Platform
SAP Business Technology Platform provides access to a vast range of services that each have their own methods of measuring costs and licencing. In a typical business case scenario or project, you would typically be accessing a range of these services. From here, you can start to understand the potential for pricing complexity.
Luckily SAP now offers three types of pricing models for consuming cloud services. This includes subscription-based as well as the new consumption-based and new pay-as-you-go commercial models.
The first, subscription-based, is fixed for the duration of the subscription period for access to SAP Business Technology Platform services where you can use as much of the subscribed services as desired, irrespective of consumption. The downside to this is that you have to decide what services you want access to up front and how much you will use. Any more and you will require contract modifications, such as if your solution architecture changes a few months down the road.
The second newer option is the consumption-based model called Cloud Platform Enterprise Agreement (CPEA). Most services in the SAP BTP Extension and Integration Suites are available for CPEA with the use of SAP Cloud Credits. You pay in advance for cloud credits and no contract amendments are required for changes in usage.
It’s similar to the consumption-based model in the sense that you have flexibility in picking and using services, but also, there is no need for upfront payment. As a customer you just start using the platform and get billed based on the usage. The disadvantage compared to the consumption-based approach is that billing is based on price list, so there is no room for discounts.
In our opinion, most customers with significant project plans will go for the consumption-based model to achieve more attractive licensing costs. Another benefit of the consumption-based pricing is that you may not know what services you need straight away. This method gives you that flexibility, so if you see you are close to using up your cloud credits you can simply pay for more. It also means that you don’t need to pay for service bundles any more, which were deemed quite expensive even at the entry level. Entry level was reduced to €10k, a good move from SAP with its new Enterprise Agreement offering a much more flexible way of licencing its Business Technology Platform.