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Introduction

A rant on new questions raised about the maintenance fee and a look at the fact that customers will have to pay for SAP LVM Enterprise Edition. What is the sentiment of the customers, is it justified and what information is out there.

Not so long ago I wrote a blog which contains information on a new SAP products which is to a large extent interesting for SAP system administrator: SAP Netweaver Landscape Virtualization Management. In the blog post Virtualization and Cloud – Landscape Virtualization Management I discussed the available editions and licensing model provided by SAP.

After having received multiple questions about why SAP is charging customer for the enterprise edition (both in comments and on the side track through twitter or mail or other channels) I decided it was time to start asking questions.

The wind is blowing which way?

I think I already blogged this in the past: sometimes it seems a finger is held into the air and depending on which direction the wind is blowing in, a piece of software, or an appliance or whatever is being sold is more expensive or less expensive without any justification to why it is like that. It’s not only SAP that is doing this, other big software companies and even smaller software companies seem to have similar strategies in place.

Maybe I should try to challenge a sales representative into a game of Battlelore, the winner determines the license cost. I play to win and I’m good at strategic board games.

Of course we have to be realistic, it’s business and it’s normal to some extent. Some customers are just huge and have tons of SAP systems in place, hundreds of SAP licenses in place and they fund SAP much more than others so they also benefit from having certain discounts and special arrangements.

The competition thrives on this

I just stated it’s normal but what if the competition comes up with a different game plan. A plan where the customer doesn’t have to pay a maintenance fee and still gets new content delivered. That would stir things up no?

Well actually the competition has already started doing that and they are more than happy to highlight it in their “big” events (which can be compared to SAP TechED). By asking customers to stand up that switched to their product suite and by highlighting the fact that they are now no longer paying maintenance fees they are really rubbing it in and they have a good point. It’s an advantage of their product compared to what SAP is offering, one that cannot be denied.

Community sentiment

The sentiment within the SAP community is that something is off and that there is something wrong with the concept of having to pay for SAP LVM Enterprise Edition. I state this after having talked with multiple SAP basis administrators at SAP TechED and afterwards with other community members once the news was out and there were more details available on the licensing model, the same sentiment was there.

It’s not my desire to harm the product SAP LVM as I believe it holds added value and the team reached out to me to collaborate and they shared information with me. For doing that they gained credit for sure because they show the new SAP at work, connecting with a community member and honestly wanting to collaborate, requesting feedback and improving their product based on that feedback.

I hope it doesn’t jeopardize the collaboration that has been going on but I wouldn’t be me if I didn’t blog about everything that has been going on, the sentiment of many community members and questions that we are stuck with on which we don’t have a clear answer (yet?). I invite you to read on but I also ask you to keep in mind what I mentioned in the previous paragraph.

Executive Q&A

After watching the executive Q&A session of SAPPHIRENOW 2011 with Jim Hagemann Snabe (co-CEO of SAP) and hearing his answer on the question of whether SAP HANA should be free for customers, I tried to understand how that answer relates to the proposition made by SAP on how they want to license SAP LVM.

You can watch the Q&A session replay online (requires logging in) The question is asked at around 28:05.
Please note that I’m not using Jim Hagemann Snabe’s exact words here but rather an interpretation of what was being said:

Customers go for Enterprise Support to keep their systems running optimal. The maintenance fees are used (among other things) to fund the innovation that takes place on the core of SAP.  For the innovation on the core of SAP, the example of “not needing an upgrade” to insert new functionality into SAP Business Suite was referenced.

Providing new functionality that previously could only be provided by others which also make you pay for it does not fall under the maintenance fee. This referenced the fact that SAP HANA will not be for free.

A grain of salt

SAP still has to prove that you don’t need to put in a lot of effort to insert new functionality into Business Suite. This is what they promised with the enhancement packages when they were first introduced and, in my opinion, SAP failed doing that. A blog that tackles this question is “Have enhancement packages lived up to their hype?”.

At SAP TechED Madrid SAP again made a promise by stating they will deliver new functionality in the future for the Business Suite without disruption. Only time will tell if they succeed this time around.

Not all SAP competitors are charging their customers for having in-memory technology in place but then again none of the SAP competitors can offer the same speed SAP HANA is able to offer right now.

Focus on SAP LVM

Let’s focus on SAP LVM again. The question becomes: “Is SAP LVM as a whole or the functionality that SAP LVM brings part of the core of SAP?”.  I wouldn’t say that all the functionality of SAP LVM is part of the core of SAP but at least a significant part is in my opinion. A system copy or refresh for example is part of regular SAP system operations which are handled by SAP system administrators.

System copies have been around for a long time already and SAP has built best practices for it, guides, tools (using sapinst) and so on. In other words, it’s not new functionality. The LVM implementation is innovation on functionality that was already there and therefore I consider it to be part of the core of SAP.

Thoughts on Enterprise Edition

Without having further information or answers to some burning questions it seems that in order to be consistent with what was stated by SAP, the Cloud & Virtualization team should move some of the functionality that is supposed to only be available in the Enterprise Edition (ref my previous blog Virtualization and Cloud – Landscape Virtualization Management) of SAP LVM to the Basic Edition of SAP LVM.

The only way the license cost can be justified is if SAP has near future plans to do accelerated innovation on SAP LVM and therefore needs to license it in order to fund the innovation (according to the answer provided in the Q&A). Questions keep popping up in my mind however because the only future innovation in the same product line area I have seen on the slides so far are project Xenon and project Titanium and I doubt anyone is going to get those for free.

I don’t know who is making the decision which features belong to SAP LVM Enterprise Edition and who decides that the product has to have a license cost so perhaps the team itself cannot help the fact that is the way it is right now. Another fact is that I don’t yet know the price that is being asked for SAP LVM Enterprise Edition. For all I know it could be ridiculously low but I don’t have any idea yet.

All I know is that there is a negative sentiment in the community towards the fact that SAP is licensing features like the system copy and system refresh which are currently part of the Enterprise Edition. Without further information I share the same sentiment as a lot of my fellow community members, certainly after watching the Q&A session replay that was mentioned in this blog.

Making assumptions

Of course this blog contains assumptions, something I don’t advice and a topic on which I recently blogged on my person blog: “Waking up and seeing the light”. The fact of the matter is I asked questions to SAP but I have not been getting any answers so far.

That only leaves me with the option to blog on SCN and share my thoughts and inevitably make assumptions and hopefully those will lead to more information. That information can prevent me or anyone else for that matter to make further assumptions on the topic and that’s an important pointer of SCN.

I must be hitting a nerve by asking these questions because none of the answers are coming back.

I invite SAP to comment on this blog and provide the community with answers because I think it’s clear there are questions, certainly around the need to license SAP LVM Enterprise Edition and in general around which innovations are funded by the maintenance fee and which innovations are not and how SAP sees this in the future. Especially now that the competition is calling them out on these facts.

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6 Comments

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  1. Chris Kernaghan
    Tom,

    I sit on the fence on this one, on the one hand I want to see this software (with all functionality) to be treated like Solution Manager and given as part of your NetWeaver license. On the other hand I have seen the licensing details and knowing what other vendors charge for these types of product – I see that SAP have done a reasonable job. That being said, because they are going to charge a license fee, then I would expect (nearly demand) to see some good innovation coming over the next few years. Our landscapes are becoming more difficult to manage, not easier – tools like LVM and Solution Manager are mandatory to the success of a well run landscape. In order to drive business value and facilitate the “Innovation without Disruption” we need these tools and rapid deployment frameworks to use them as quickly as possible (but that is another argument and perhaps a new blog post)

    Chris

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    1. Tom Cenens Post author
      Hello Chris

      Thanks for your comment. I have yet to find out the price and of course I hope I can then agree with you that it is in fact reasonable.

      I also really see added value coming out of this product and feature products that are part of the product line and a major role of those products in the future of SAP system administrators.

      Kind regards

      Tom

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    2. Tom Cenens Post author
      Hello Chris

      Thanks for your comment.

      I have a similar feeling on SAP LVM because I really do find it to be an attracting product and I would like to see it succeed.

      It’s positive that the pricing is reasonable but then again on the other hand it’s questionable if the licensing can be justified at all for certain features and to what extent we will see “accelerated innovation” which is not the same as innovation.

      It’s funny to hear Solution Manager and SAP LVM being used in the same context or sentence very often. One of the questions I asked talking to Sanjay at SAP TechED in Madrid was “Why isn’t this functionality inside Solution Manager?”. The answer was that some customer don’t have Solution Manager in place and that they want to give those customers the opportunity as well to use this tool.

      I don’t really believe that’s the actual reason because if you can install a Netweaver 7.3 AS Java + Addon why wouldn’t you be able to install a Solution Manager 7.1 instead?

      To me it looks more like the technology used for Solution Manager 7.1 is too old (Netweaver 7.0 EHP2) and since the Adaptive Computing Controller was already build on newer technology it wouldn’t be easy to place the functionality / migrate coding, features into Solution Manager in the present.

      The team does have a lot of ideas around coupling SAP LVM and SAP Solution Manager so at least that’s a positive pointer in that part of the story.

      I would be interested to read that blog so I hope you will be writing about it soon 😉

      Kind regards

      Tom

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      1. Markus Doehr
        “I don’t really believe that’s the actual reason because if you can install a Netweaver 7.3 AS Java + Addon why wouldn’t you be able to install a Solution Manager 7.1 instead?”

        We try to avoid SolMan whenever possible, it created more problems in the past (we started with 2.2, 3.1, 4.0 and now on 7.01) that it helped solving, and basically creating issues, where there were none, if there was no SolMan. So yes, LVM without SolMan would be appropriate.


        Markus

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  2. Martin English
    first, I must aplogise for mangling the English language like I just did 🙂

    We see SAP buying organisations like SuccessFactor and pushing the ondemand.com products because customers see that the SaaS cloud provides a faster ROI and cheaper TCO.  In fact, SAP lost Siemens as a customer to SuccessFactor for this reason. From an Iaas (Infrastructure as a Service) perspective, Landscape Virtualization Management is both an SAP product and a useful term for describing the management of multiple (i.e. 10’s, 100’s or even 1000’s) instances, whether they be SAP instances, email servers, web servers, etc. 

    The connection between the SaaS and IaaS is that server virtualisation, whether in your own datacentre or in a public cloud, is only usefull when it can be managed, and when the benefit of virtualisation exceeds the cost of the management and the infrastructure associated with management.

    Key components in managing a large number of virtual servers (whether they’re in your own data centre or not) include:
    the ability to easily make extra copies of existing images (i.e. automated copying / cloneing of systems on demand),
    the ability to quickly and easily determine what resources you have allocated, where they are allocated and scaling the number of active images up or down based on demand or schedules (i.e. automatic capacity Management),
    the ability to mange resources and images at the commodity level (i.e. the software running on the image is irrelevant).

    It appears to me that the first two particularly are components that are included only in the Enterprise Edition of LVM, at extra charge. Without these components, and after studying the appropriate presentations from Teched, I find it very difficult to distinguish LVM Standard Edition from todays ACC. Additionally, both ACC and LVM (standard or enterprise) appear to suffer from the inability to manage non SAP images and systems. 

    In short, SAP want customers to fund (above and beyond existing maintenance fees) future innovation, based on a history of little or no innovation in the move from ACC to LVM, for an SAP specific tool that replicates what other vendora (VMware, Ubuntu,..) are already providing for multiple workloads (i.e. NOT SAP specific).

    It makes me wonder who the LVM Standard Edition, let alone the ‘expensive’ Enterprise Edition, is aimed at. For example, I suggest most customers – I’m thinking the ones with, say, a 3 or 4 instance landscape of ERP / BW / Portal / XXX – couldn’t justify having an SAP specific image management tool on top of whatever they use to manage the rest of their virtualised workload. I would think that even those customers or ‘SAP hosters’ with a large number of SAP instances would consider a less SAP-specific tool before they considered LVM.

    This is all based on my understanding of LVM and it’s future, based on the Teched presentations. Seriously, I hope I’m wrong, because it appears that a lot of effort is being expended on a tool that will have limited use.

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    1. Tom Cenens Post author
      Hello Martin

      Thanks for your comment.

      You raise some good questions as well and I agree with what you are saying.

      One of my smaller customers is interested in SAP LVM but, and here comes the part that relates to your comment, they can already clone VM’s because there are using VMWare. To do disaster recovery tests we just right click the VM, choose clone and go through a wizard to assign the resources and voila we have an exact copy of production which we then use to perform disaster recovery tests.

      What my customer finds interesting is the refresh functionality but that is because there isn’t any automation in place yet right now.

      It doesn’t take weeks like the SAP LVM likes to mention in the webinars to put a refresh or copy or clone in place. My customer has a complete virtual environment, disks, memory and cpu are available instantly. I ask a VM to install Solution Manager 7.1 and 15 minutes later I have a Windows 2008 R2 installation running, ready for the installation of the new Solution Manager.

      A refresh at that customer requires me to do about one work day (or even less) of postprocessing to get everything sorted out. It’s not automated but of course I do export/import tables to speed things up.

      The larger customers that I have all have custom scripts in place and the refreshes are fully automated already.

      The price that is put against having automated refresh functionality in place has to be less than the price of hiring me and getting me to create the custom scripts.

      Once those custom scripts are in place, there is no license cost or fee that my customer has to pay. With SAP LVM Enterprise Edition the cost will be reoccuring so that makes it a lot harder to create a business case why the customer should buy the tool.

      Not to mention that if you put SAP LVM in place and you want to automate your SAP system refreshes you also bound to having to put custom operations in place which is possible and which is in fact a great feature of the product but the point is you still have work to do.

      Of course there are other features there but you have to look at what the customer will use. Capacity management will not directly be used by small customers because they don’t need to scale out or don’t immediately have plans to put their environment in the cloud.

      So the main pillars that seem to have to support the SAP LVM Enterprise Edition are in fact weak and could crumble and make the whole construction fall down which would be a pity because I really see a product that can provide added value to doing SAP system administration and managing SAP systems (on-premise and in the cloud).

      Of course everything depends on the pricing, if it’s really low and you can build up a good business case after all it might be worth the effort.

      Kind regards

      Tom

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