SAP experts are doubting the enterprise software giant’s message that it is simplifying licensing after the changes were discussed at the German-speaking user group conference.

One licensing expert said SAP was trying to split the market for net new customers and existing customers with its changes, while encouraging them to move to the cloud, invoking nostalgia by resurrecting the Business Suite moniker, well known 20 years ago. Another analyst said SAP’s definitions of public and private cloud lacked a meaningful definition.

Last week, German-speaking user group DSAG called for licensing transparency after the ERP vendor ended its RISE with SAP product package, replacing it with SAP Cloud ERP Private package, with pricing based on the Full-Use-Equivalent metric (FUE), which differs from on-prem and public cloud metrics.

At the time, an SAP spokesperson told The Register: “SAP has always been committed to making conditions for its customers as simple and straightforward as possible. We maintain close communication with our customers and user groups around the world to ensure processes run smoothly and with minimal effort. We are therefore confident that, together with our customers, we can shape these processes to their satisfaction.”

However this week, Jens Gleichmann, managing director of German SAP consultancy Crossload, said users are struggling to understand how this will simplify their licensing.

“It’s not getting more simple, it’s getting more complex,” he told The Reg. “During SAP’s DSAG presentation, there was a lot of humor and a lot of laughing because the SAP representative presented that it was all being simplified, and every single slide was so complex, and when you looked at the audience, the eyes got bigger and bigger.”

“The pricing model, regardless of public or private, is still not really transparent. It is so complex. They have also introduced a new AI unit, Premium AI, based on a per user, per month, or per request or record. Sure, it may be more granular for some smaller customers, but before you had nine tiers and now you have 14 tiers for SAP Cloud ERP private pricing.”

Last year, SAP angered users by suggesting innovation such as its AI agent, Joule, would be available only on S/4HANA in public or private clouds to bolster its RISE with SAP cloud migration program.

But despite SAP’s efforts – including the four years of the RISE with SAP cloud transition package – many customers still remain on long-standing legacy ERP system ECC. Gartner numbers from earlier in the year showed some 61 percent of users of ECC had yet to license the latest S/4HANA software.

Gleichmann said customers still on ECC would not be motivated by innovation. “They’ve been running old products for years, and I don’t think they are ready to go to any cloud because of innovation. They just want to run the business ERP system. When you ask them, they are not signing RISE contracts because of innovation. When you ask the customers, do you really need innovation, most of them will say, ‘we don’t need it.’ The most common reason they signed the RISE with SAP contract is because SAP is telling them the discounts are getting less, and if they wait three years, it can get really expensive. SAP’s strategy is crystal clear, but not all customers will follow it due to their own agenda and priorities.”

Sharon Ryan, licensing expert and partner with SAP advisory firm Xactitud, agreed SAP was adding to the complexity of its licensing, not simplifying it.

“SAP now has different license models for SAP Cloud ERP, Private Edition (FUE) and SAP Cloud ERP (per user per month). The only reason I can think of why SAP decided this path is to clearly split the target market between the two – SAP Cloud ERP, Private Edition (FUE) for existing customers and SAP Cloud ERP for net-new.”

She said the licensing under the revival of Business Suite in the cloud had a ring of familiarity.

“Interestingly, the individual solution packages available to SAP customers under SAP Cloud ERP – SAP Finance, SAP Supply Chain, SAP Core HR and so on, with the nested licenses per package – are not dissimilar to the mySAP Individual Solutions user license model available at the turn of the century. Then, customers needed to purchase one license per user per module such as mySAP ERP, my SAP CRM, and mySAP SCM for example. For SAP Cloud ERP, SAP seems to have introduced a combi-license for some of the lower-level functionality. However, if users require higher-level functionality for two packages, they may require two licenses.”

“This, coupled with the reintroduction of the concept of SAP Business Suite, suggests SAP is leveraging customer nostalgia and familiarity to accelerate their transition to the cloud.”

One industry analyst, speaking off the record, said SAP was chasing so many trends that users could no longer take terms like “cloud” or “private” at face value. They said that “cloud” might not even refer to where the system is deployed. For example, SAP distinguishes between running S/4HANA on SAP’s chosen hyperscalers (Cloud Private Edition, managed by SAP and partners) and customers running the same software on their own hyperscaler infrastructure (which SAP still categorizes as on-premises).

“Neither does ‘cloud’ refer to the type of software used as SAP use for both cloud-native public editions and cloud-enabled private editions,” they said.

“The only consistent binary definition I can see between their ever-changing names is SAP favoring a subscription model with no exit process. So with such vague meanings, the phrase ‘private cloud’ doesn’t mean anything.” ®