Alternative databases: Microsoft, IBM, Oracle, SAP
Differences HANA runtime and HANA full use
Volume Discounts with SAP: cumulated and tiered
Migration phase: paying twice?
For database runtime licenses, SAP charged in 2011 8% for Microsoft SQL Server, 8% for IBM DB2 and 15% for Oracle. Now in 2021, SAP charges 8% for Microsoft SQL Server, 15% for IBM DB2, 25% for Oracle and 15% for HANA. This is a clear message: buying Oracle for SAP will cost you 10% more than buying HANA.
What does this say about SAP´s database strategy? Is Oracle now an “enemy” of SAP? Does this have to do anything with the fact, that Oracle has become a major competitor of SAP in the ERP arena? But then again, why has IBM been punished with a price increase, too, in opposite to Microsoft?
When you are looking to optimize your SAP database costs, you should regard following questions:
Runtime databases are licensed as a percentage of your total software costs with SAP. (SAV or HSAV). This is how SAP explains it:
SAP Application Value (SAV) is the sum of list prices for Named Users, External Community Members, (panindustry and industry specific) Software Engines and Supplementary Products, excluding those items identified in the list of prices and conditions that do not contribute to the SAP Application Value.
HANA SAP Application Value (HSAV) is the sum of prices for licensed SAP Software and Third Party Software, excluding those SAP Software and Third Party Software identified in the list of prices and conditions that do not contribute to the HANA SAP Application Value. For the purposes of this definition, “price” can refer to:
- Existing installed base “Price” is defined as the net value for previously licensed HSAV relevant SAP and Third Party Software. The net value of the SAP and Third Party Software is derived from the applicable software contract(s) for the HSAV relevant SAP Software and Third Party Software as follows: The net value for previously licensed HSAV relevant SAP and Third Party Software will be calculated based on the respective list price less volume discounts less ( in case) special discounts. For clarification purposes: However, any migration discount or credit e.g. will not be deducted from the list price.
- Net New & Subsequent Purchases “Price” is defined as the list price for HSAV relevant Software and Third Party Software licensed in the current Order Form. In this case the calculated HANA Limited Runtime Edition fee will be discounted by the average deal discount of the current order form for internal recalculation purposes. The HANA Limited Runtime Edition fee is not further discountable after applying the average deal discount. SAP HANA products still are non-discountable.
Learn how to manage your SAP GRC Authorizations
If you want or have to use a non-SAP database, like the ones form Microsoft, IBM or Oracle, think twice, before you purchase them from SAP and pay maintenance to SAP: a percentage of your total license costs could be far more expensive than adding 10 cores to your Oracle unlimited license agreement, Microsoft or IBM contract. Even if you already contracted those databases from SAP, you should evaluate, if decommissioning support from SAP for the runtime database is a better alternative.
The first question of clients regarding HANA is often: is the runtime version enough or do I need a full use version? Let us first investigate the differences in SAP licensing: the pricing models are quite different. We already explained that HANA runtime is priced as a percentage of the price of your SAP installation.
HANA full use is licensed based on your database size in units of 64 GB and with tiered pricing (volume discounts). There are free tools from SAP to help you estimate the future size of your database.
Now, is this pricing model better or worse than the runtime pricing? It depends… Database sizes are very different from business sector to business sector. Some businesses handle very high amounts of sales orders, products, material movements, financial movements. Others don’t and do their business with much smaller quantities of documents – and have therefore much lower requirements on database sizes.
In addition to that, you must understand HANA’s pricing tiers in order to purchase correctly, that means having access to SAP’s price list. The following diagram shows, that with growing database sizes, price goes down with every tier, so sometimes it is better to buy higher quantities – but to do that, you need to know prices per tier. So please ask your SAP account manager to provide transparency, before you buy HANA.
HANA runtime is enough for a standard SAP installation. And yes, you can export data from the database, without having to buy a full use license – a question we are often asked by clients.
You need HANA full use when you plan to build your own applications on HANA, or need direct access to HANA’s database tables, without using SAP functionality. But of course, the decision is a bit more complex than that:
We have seen an increasingly high number of clients paying 2 runtime licenses in parallel, e.g. Oracle and HANA. When a client migrates a part of his servers to S/4, he now has two runtime products licensed based on a percentage of the total license value of SAP. Now, this is of course a funny interpretation of the license model by SAP. You don’t have 2 databases on one single SAP server, so why should you be paying twice the database amount? Make sure you lead proper conversations with your account managers and don’t pay twice.
HANA is a modern database platform with many advantages. Moving to HANA is becoming obligatory for clients moving from ECC to S/4. With this, understanding SAP HANA’s licensing model and the costs attached to runtime and full use versions of HANA will become necessary in the short or mid-term.
Database costs will also become a relevant part of your SAP contract, so please make sure you accurately understand your options before signing for it – it may change your maintenance cost by several millions USD.
Francisco Fernández Hansen has been Head of Advisory at VOQUZ Labs since 2019. He is responsible for sales in the USA and Latin America. Francisco leads the team and the offices in New York and Mexico City.
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