[SAP BTP Onboarding Series] Commercial Models
In this part of the SAP BTP Onboarding blog series, I’m going to explain the different options SAP has available for licensing SAP Business Technology Platform. As of this writing in December 2021, SAP offers three commercial licensing models:
When SAP started to offer Software as a Service, we provided our software in subscription form only. The thought was customers came with a use case in mind and knew what they needed to achieve their goal. If for example a customer wanted to build a supplier portal, they would work with their account team and solution experts to determine a bill of materials detailing how much and for how long they would need a certain service. This model remains in place and is what I call our most traditional commercial model.
What SAP learned after a few years of offering software as a service was that some customers wanted to run fast and stay strategic with cloud offerings and evolutions. The pace at which software offered in the cloud can be enhanced is almost mind boggling. It’s a blessing and a curse if you think about it. On the one hand we all want the latest and greatest technology and understand it gets enhanced for good reason. On the other hand, we want to be able to say we’re done with a project and not feel like it’s constant never-ending. This is where the whole shift to a cloud mindset comes into play. I was working when we had on-premises software that didn’t evolve at the pace we evolve today and that was cool for the time being but now, in today’s world, I know and accept that we’re never going to be done. Sure, we should pause and celebrate the milestones, but then we should get back to thinking how can we make it better? How can we make it faster? Simpler? How can we push the boundaries? This type of iterative thinking and understanding that technology evolution will simply never be considered ‘done’ is part of what transitioning to a cloud mindset is all about.
For customers who have made the shift to the cloud mindset, the SAP Cloud Platform Enterprise Agreement (CPEA) is the commercial model for you. With this commercial model you’re entitled to over 70 services in the cockpit today from your contract start date. With a CPEA, SAP empowers you to turn on and off the services you need and then charges you based on what you consume. This model can be thought of like a debit card, or to my earlier analogy, a gift card to the hardware store. You put a certain amount of funds in and then every month you’re debited against what you used.
In my previous blog, I discussed the importance of planning for your project and while that is important for any project it is very important for a CPEA agreement. You need to spend some time in the SAP Discovery Center understanding how services are charged. Some services have a flat rate, some a per user rate, some a combined flat rate and additional consumption rate. It is important to plan for what you think you’ll spend and then match that against what you are spending. SAP has made it simple for you to monitor costs and increase funds if necessary.
The final commercial model we offer is called Pay-as-you-Go (PayGo) and like the name implies there is no up-front commitment. You can think of this model like a credit card; every month you’re charged at a premium rate for the services consumed and the convenience of not having to commit. The SAP BTP cockpit looks exactly the same for all models, the only real difference is how you are charged. The PayGo model is non-threatening and meant to be there for when you need it. With that in mind, some of you may have SAP BTP and are wondering why you have since you don’t recall explicitly purchasing it. SAP has started providing customers an SAP BTP account with certain purchases, for example RISE with SAP. Think back to my analogy blog where I compare the SAP BTP cockpit to a hardware store. The reason SAP is including a PayGo SAP BTP account for you is because we know at some point during your digital transformation, you’re going to need to go to the hardware store. We want to give you access to the local hardware store without making it complicated to get to. We don’t want to slow you down by having to engage in a commercial conversation, we want to you to run at your pace.
When looking at the different commercial models it makes you wonder ‘do I have to commit to one model type?’ The answer is no and in fact some of you reading this blog may already have multiple commercials models or even combined models. People often want to know ‘what is the best model?’ and that’s a difficult question to answer because it really depends. Each model has its strength and reasoning and if you have a use cases that likens itself to one model over another that’s perfectly fine. Sometimes customers have a strong sense of the services usage for a mature project but then they also want to have the flexibility for innovation and speed for other projects that might emerge. For those customers, I can see them having a combined subscription and consumption account.
SAP is working to provide all our customers, from varying sizes and across different industries, a powerful platform experience that delivers all the tools, services and resources required for them to be successful. You’ll continue to see evolutions coming in how we offer our platform and what we deliver to better consolidate and organize our offerings to make your life easier. We discussed how the shift to a cloud mindset means never accepting things as done and the same can be expected of the SAP BTP cockpit.
In my next blog, I’m going to discuss how the SAP BTP cockpit is structured and what are the basic building blocks you have available to create an effective account model for your business.
Clearly explained Liz!, Great work
Nice explanation..easy to understand
We are receiving notice that our BTP contract is ending while we know that our Successfactors contract is still ongoing. Are contracts for the two separate?
They could be separate, it depends on how you licensed everything. For this topic, it would be best to get in touch with SAP Account Representative to discuss details.