SAP mulls value-based licencing overhaul

Applications and ERP juggernaut SAP is considering substantial licensing changes and appears set to start experimenting with blended licensing models based on a combination of user headcount and transactional volume across a range of industry sectors.

News of the licensing rework filtered out of SAP's annual Sapphire conference in Boston, Massachusetts after SAP CEO and chairman Henning Kagermann mooted changes to SAP's licensing regime in order to better reflect SAP's new, service oriented architecture applications offering, Enterprise Services Architecture (ESA), during a keynote address.

Referring to the new licence and pricing model as "value based pricing", Klagerman's comments have left local branches of SAP scrambling to make assurances the new scheme will be trialled only where appropriate and will not involve a wholesale shift to pricing based on the gross revenues of customers, similar to PeopleSoft's licensing model.

Any new licensing regime is of critical importance to large government SAP users, because any shift towards revenue-based charging has the potential to turn sour in government agencies which distribute revenue.

One heavy SAP user is Centrelink, which currently commands about $9 billion which it distributes to social welfare recipients.

Asked how the new regime would impact government clients, CEO of SAP Australia, Geraldine McBride told Computerworld the new pricing concept "is still users and scenario based".

"There is still some consideration of pricing around scenarios or value, but nothing planned for the public sector at this stage," McBride said.

One possibility SAP is understood to be considering for ESA includes a way to effectively charge non-SAP clients accessing SAP products via its new alliance with Microsoft, codenamed named Mendocino.

The product links Microsoft's Office application suite with SAP applications and allows users to access functions such as reporting via tools such as Outlook.

The product also aims to integrate SAP's time management, budget monitoring, organizational management, and travel and expense management directly into Office and to give users extended application menus and select process options and information in the SAP smart panel.

It also aims to synchronize information between Microsoft Exchange Server and SAP, retrieve SAP information in Microsoft Excel, and submit data via Microsoft Office InfoPath forms.

Similarly, ESA is also heavy on integration with SAP touting the new architecture as a means for users to craft end-to-end workflows over multiple applications using the NetWeaver middleware to enable integration between mySAP and other independent applications.

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