SAP co-CEO: We're working to fix software licensing, pricing complexity

The company is hoping to sell more software and services in bundles, making the buying process easier, according to Jim Hagemann Snabe

SAP is aware of widespread user discontent over the complexity involved with licensing rules and pricing for its software, and is working to remedy the situation, co-CEO Jim Hagemann Snabe said in an interview Wednesday.

Earlier this month, the U.K. and Ireland SAP User Group released details of a member survey that found 95 percent of respondents believe SAP's licensing policies are too complicated. The survey also revealed that 67 percent of users have found it ever more difficult to track license usage as the vendor's product portfolio grows.

"We now have multiple products in five categories," Snabe said, referring to SAP's range of cloud software, mobile technology, HANA in-memory database and other offerings. "That puts you in a more complex situation. What we're trying to do is come to a solutions approach."

In other words, SAP wants to combine its various products into bundles, including industry-specific ones, "that have high value for the customer, Snabe said. In this way, "we can simplify the pricing," Snabe said. "We want a more solution-oriented price list."

He noted that SAP has already begun going down this path with its series of Rapid Deployment Solutions, which combine software, services and specialized content for fast, albeit focused projects. Now, SAP is now looking to extend the concept further, and is working with user groups to do so, Snabe said.

A major announcement regarding these efforts won't come "in the foreseeable future," but SAP does recognize the problems users cite and is working on them, Snabe added.

Even as SAP moves toward the "solution-oriented" approach, customers will still be able to buy everything it sells in stand-alone form, he said.

Snabe's remarks are of interest for a number of reasons, but also don't address the full spectrum of customer concerns, said Jon Reed, an independent analyst who closely tracks SAP.

The total price of software includes consulting services and support, not just license fees, Reed noted. "What that tells me is he's feeling pressure from customers about not just the software, but the services piece."

If SAP moves more heavily into "solutions" such as Snabe discussed, it will potentially take business away from its consulting partners, who should pay attention, Reed added.

Meanwhile, although SAP has gotten better over time offering public pricing for its midmarket and small-business offerings, "they really seem attached to not publishing price lists for large enterprises," Reed said. That's because SAP wants to preserve all its leverage for negotiation during such deals, rather than be tied to a public price, he said.

But as SAP consolidates its online software storefronts and adds more products to them, it will be forced to become more transparent, in Reed's view.

It might be easier for SAP to lower the complexity of its licensing models, however, Reed said. "There's different categories of licenses. One thing making it harder is, how do you incorporate mobile consumption?"

"If I'm a company I want simple licensing scheme," such as a three-tier system composed of super users, regular users and "lightweight" users who rarely need to touch the system, Reed added. "SAP hasn't fully addressed that yet. I think there's a lot of work to do there."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Topics: business issues, CIO role, SAP, it strategy, software, IT management
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?