sap business bydesign contract rules & new license model … 2... · 2019-07-03 · ǀ...

Internal | SAP Employees and Partners Only

Dirk Neudert, SAP

March, 2019

SAP Business ByDesign Contract Rules & New License Model Changes

SMB Innovation Summit 2019

2Confidential: Released for Partners© 2019 SAP SE or an SAP affiliate company. All rights reserved. ǀ

Licensing and Pricing for SAP Business

ByDesign needs to be re-designed to a

state-of-the art model. Today, we will

inform you about the key details.


License Model Simplification

▪ Reduce existing model from 8 user-types with 5 prices down to 3 user-types with 3 prices

Consumption based Pricing

▪ Introduce Digital Access and Storage based Pricing components

Agenda

License Model Simplification


New SAP Business ByDesign License Model required

Following enhancement ideas are frequently communicated by our Customers

▪ Team User Views of different Team User Types should be consolidated to a single user type with no further impact on

the required licence consumption as they all cost the same.

▪ Self-Service User Views of different Self-Service User Types should be assigned to a single user with no further impact

on the required licence consumption.

▪ Consolidated User Types avoid potential misuse of single user types and simplifies the User Administration

▪ Functional overlaps in an organization easily ends in the need of a more expensive user type, even if they belong to the

same business topic area. F.e. in the actual model a lot topics belong to the Team User, but one missing function

belongs to the Enterprise User. This functional relation to user-types should be streamlined as such detailed differences

are often not clear and don‘t make sense for the customers.

▪ Approval tasks often require an expensive user-type (Standard Enterprise User) compared to the overall tasks

responsibility of the employee

▪ Overall, customers are looking for a more fair share of license costs


New slim ByDesign License ModelBenefits

You‘ve asked - Our reaction on your customer feedback

✓ Simplified and slim model with clear and understandable split of available functions per User Type

✓ Easier to understand for our Customers

✓ Simplified User Management

✓ Authorization Tasks will get cheaper compared to the actual model

✓ Better cost fit compared to the concrete demands per user and our customers overall


New slim ByDesign License Model

New Model

3 User-Types, 3 Prices

Actual Model

3 User-Types, 8 Sub-Types, 5 Prices

SCM Enterprise User

Team User

Standard Enterprise User

SCM CRM PM

STD

PM

SCM

Self-Service

User

Provides complete set of ByD

functionality including additional

SCM functionality to manage

physical inventory, supply chain

planning and manufacturing.

Allow users to perform core

self-service office tasks, such

as time and expense reporting,

purchasing, and travel

management. Additional role-

specific tasks for SCM and

project management are

included as well.

Advanced User

Self-Service

User

Core User

Includes core functionality to

support office workers,

planners, accountants or

salespeople like customer

relationship management,

purchasing supply chain

management, and project

management to help

manage team activity.


License Model Comparison High-Level Overview

SCM

Enterprise

User

Standard

Enterprise

User

CRM

Team

User

SCM

Team

User

PM

Team

User

Standard

Self-Service

User

SCM Self-

Service

User

PM Self-

Service

User

Advanced

User

Core

User

Self-

Service

User

Self-service

tasks

Customer

relationship

management- -

Human

resources- - - - - - -

Project

management- - - -

Product lifecycle

management- - - -

Management

support- - - - -

Supplier

relationship

management- - - - - -

Financials - - - - - - -

Supply chain

management- - - -

Built-in analytics - - - - - - -

Fully Included Fully Included ⎯ Fully Included


New slim ByDesign License ModelOutlook

▪ Go-live is planned for Q4 2019 latest for new customers

▪ Existing customers can switch at the time of re-newal

▪ Existing customers cannot mix current and new user-types

▪ Potential higher prices in single cases for existing customers can be compensated via customer

individual discounting flexibility


Pricing Model for Cloud ERP Software

Situation

0%

20%

40%

60%

80%

100%

M1 M3 M5 M7 M9 M11

Consumed Committed

Standard Commitment +


▪ Included upfront commitment

▪ Advance billing for commitment

▪ Overused volume will be paid in

arrears

Preferred model for SAP for

Cloud ERP because of fix costs

independent from usage

behavior by customers

Cloud ERP Software Providers use a mix of

Standard Commitment and Consumption based

Pricing components within their Pricing Model

▪ Customers pay based on a subscription model for Licenses and

further components / business related modules to cover the usage

independent costs of ownership

▪ As part of the subscription fee there is usually a defined volume

included for Consumption based Pricing components

▪ Going above the included volume, will be charged based on

consumption in packages or concrete metered volume

▪ Such mix of pricing components allows a stable pricing for all

customers for subscription based pricing components


Common used Consumption-based Pricing components

Indirect UseMemory

Consumption

SAP S/4HANA

SAP S/4HANA

▪ The main Cost components directly influenced by the usage behavior of customers are Indirect Use (3rd party

integrations) and Memory Consumption. They directly impact the TCO of the Cloud ERP Software Providers and finally

can lower their margin.

▪ Most Providers are sharing such costs with their customers. SAP Business ByDesign will introduce the same

components for new customers in 2020.


SAP Business ByDesign harmonized with S/4 HANA Cloud Pricing Model

▪ Future license and pricing model

for ByD in sync with S/4 HANA

Cloud

▪ Digital Access for 3rd party

integrations comes with included

volume to cover the direct use

consumption

▪ Storage based pricing focus is on

attachments and test tenants

(limited volume included in

consumed licenses)

Use

r A

cc

es

s

SAP Add-Ons

3rd

Pa

rty U

se

Storage

3rd Party Apps

Custom Apps

Integration

Advanced Use

Core Use

Self Service-Use

… o

the

rs…

Rea

l E

sta

te

Rea

l S

pe

nd

Ad

d‘tlT

en

ants

File

/BL

OB

Sto

rage

In m

em

ory

DB

Digital Access

New for SAP Business ByDesign

Three different User-Types

and additional Consumption-

based Pricing components for

Indirect Use and Memory

Consumption


Consumption based Pricing for SAP Business ByDesign

How it works

▪Customer buys user-licenses or tenant-licenses as part of his contract

▪Each license comes along with a definition of “included usage/volume”

▪Actual usage of the system will be measured (and visualized in a dashboard = Control for customer)

▪There is no restriction with regards to the usage (at least from this aspect)

▪On a yearly basis the actual usage will be compared with “included usage/volume” and customer need to settle in case of over-consumption

▪Settlement based on additional memory packages or document licenses

Metering basis: Number of Documents/year, Effective Storage


Consumption based Pricing for SAP Business ByDesignBenefits

Fair share of costs

✓ Allow a stable pricing for all customers via subscription based pricing components by protecting the profitability for

SAP as basis for stability

✓ Only significant over-usage will be charged - included volume for metered consumption based pricing components

fits to the usage behaviour of 90% of our existing customer base

✓ Better cost fit overall compared to concrete demand per customer


The change of the License and

Pricing Model will better fit to the

real requirements of our

customers as well as creating

stable and projectable pricing

conditions in the future.

Thank you.

Contact information:

Dirk Neudert

Head of Pricing SAP Business ByDesign

Dietmar-Hopp-Allee 16, 69190 Walldorf

+49 6227 7-65133

Gamification Challenge Code

NIC1d8dBy entering this SAP Breakout Session

code you will be granted 10 points

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