The 4 dimensions: FUE, Digital Access, modules and additional infrastructure
How to consciously approach the transition to the cloud with Rise with SAP: an in-depth analysis of the four licensing dimensions of the new consumer subscription model.
The subscription model represents a great opportunity for companies looking to adopt a cloud migration strategy that is as organic as possible, because it provides a core around which to build their move-to-cloud project.
With this in mind, back in January 2021 SAP announced Rise with SAP, a program specifically designed for companies that want to embark on this path since it integrates in a single package solutions and services within a single package that extend that allow “as-a-service” usage to be extended to all key SAP resources.
In addition to the suite in the cloud, the package includes a number of key components for Business Process Intelligence capabilities, cloud credits (CPEA) for use on different areas of the SAP Business Technology Platform (BTP) , followed by SAP Business Network starter pack to help companies connect with business partners involved in the source-to-pay process, as well as essential tools and services for conversions and new implementations, such as Readiness Check, Custom Code Analyzer and Learning Hub.
Moreover, the program goes beyond the concept of technical migration to the cloud because solutions, infrastructure, implementation services, application management, and support are provided by SAP and its partner network, all under a single contract.
We should keep in mind that Rise with SAP is an offering that combines software licensing, infrastructure and technical managed services (TMS) in the form of a cloud subscription. The "License Overviewdivides licensing into four dimensions:
Let's look them in detail:
1) A new metric for direct access: there are now FUEs (Full Use Equivalents)
The main change in Rise with SAP is a new usage metric known as Full Use Equivalent (FUE). This is a unit of measure introduced by SAP to license its S/4 HANA Cloud applications in order to simplify the myriad of user types that exist in perpetual licensing.
The FUE represents a single base license with several layers in terms of functionality that are granted as a percentage of the baseline. For example, one FUE is equivalent to: 1 SAP S/4HANA for advanced use, or 5 SAP S/4HANA for core use, or 30 SAP S/4HANA for self-service use.
Let's not go into detail, because we have discussed this in depth in the dedicate article.
Before starting negotiations to calculate the required FUE licenses, it is essential to have an awareness of how users are using the system and ensure that they are set up to use the type of license most appropriate for their use.
At WEGG we are experienced SAP licensing consultants and help companies obtain reports that collect aggregate data related to users' behavioral and licensing patterns to:
We do this by relying on SAM tools natively integrated into SAP, such as Snow Software's Snow Optimizer for SAP (now part of Flexera).
2) The Digital Access model is now the de facto standard for indirect access
Traditionally, SAP required, when exchanging data with third-party applications, to also license the users of those third-party applications for indirect use of their products. It was often technically difficult (if not impossible) to determine and control the number of users (and thus of licenses to purchase), suffice it to say that the contract does not allow SAP to audit “other people's” systems. This situation has led many companies to undersize (if not exclude) the licensing requirements for this component in legacy systems.
Thus was born in 2018 the Digital Document Model, an option to license indirect access with an accompanying adoption incentive program (we had discussed this in our article on DAAP).
At Rise with SAP the Digital Access model becomes the only option when new contracts are signed.
Digital Access is a metric that is no longer based on the number of users, but on the number of documents that non-SAP third-party systems go to create on the SAP/4 Digital Core and their type (there are nine types for each of which there is a special multiplier).
The issue is important because the calculation of indirect/digital access could undermine compliance exposure if the total purchased is less than what is measured and reported in the LAW (License Administration Workbench), which is SAP's required self-verification of licensing position.
This metric, in fact, was introduced by SAP to shed light on the gray areas around the concept of “use” to be licensed when there was no direct access to the system, especially in the presence of devices, bots or automated systems, but also human figures accessing via non-SAP intermediary software (EDI interfaces, third-party CRM systems, mobile, IoT) to the SAP core.
Now with the new model, based on results and not users, SAP customers can license their indirect access to SAP based on the number and type of documents created, regardless of the number of users and systems connecting to the system.
As long as the count is correct: It is, in fact, important to know how many digital documents will be created in order to size the licensingThen there are scenarios that do not require licensing (situations where access may fall under named licenses or where Indirect Static Read occurs, etc.) that need to be analyzed on a case-by-case basis in order to optimize the final cost to put on the table.
In this regard in WEGG we support companies in estimating the number of digital documents based on usage data and also predicting roadmaps of future evolutions in the analyses (e.g., automation with RPA bots creates indirect accesses, which must be provided in a granular way in all their integrations).
This ensures better decision making in negotiations with the purchase of licenses in the appropriate quantities (neither too many nor too few), while maintaining compliance at all times.
3) Additional licenses for add-on modules
Rise with SAP also provides industry and LOB solutions with add-on licenses. Among the optional add-on applications we can also find “engine”: in this case the metrics are unique to each engine and and are based on the objects within the application (be they users, turnover, ecc.) and can be measured by the product or self-reported by the customer.
Licenses with this type of metric are unlikely to be optimizable because they are most often business-related numbers. In any case, the presence of multiple metrics makes it difficult to count them as a whole and have a glimpse of the consumption metric.
In this regard, we point out SAP4Me, the new centralized platform in SAP (we expressed our feedback here), which, within Finance&Legal in the Consumption section, allows you to have a a single view on SAP's cloud product licensing documents where they are grouped by metrics and there are then columns dedicated to measuring consumption, which also highlight the delta (in orange) in case of over-utilization.
Some elements that do not yet make the reading immediate and the discrepancies detected in the numbers leads us to consider it a starting point for analysis, but not the only reliable source: we always recommend checking the data against what is recorded by SAP products.
4) licenses for additional infrastructure
Additional licenses are also required for additional infrastructure components (virtual machines, storage space, etc.) needed during cloud migration. To learn more about how to license the HANA database on which these components rely, please refer to this article
As a reminder, in the process of transitioning from SAP ECC to SAP S/4 HANA Cloud, it is critical to have full awareness of the systems, their processes and associated data in their current (as-is) form in order to assess their suitability to be ported to the new structure.
Usually, the choice of cloud plans is based on the characteristics of the existing hardware or the data provided by the virtualization environment , but this rough estimate ends up including unneeded or improperly mapped resources (unused storage, powered-down virtual machines etc.) in the migration assessments. We have talked extensively about the benefits of proper sizing and the same applies to Rise with SAP.
To migrate to SAP S/4 HANA cloud there are three approaches (as seen in the image below).
Let's look at them in detail:
Whichever approach one opts for, current infrastructure consumption, defining processing load profiles (the PBAs, the Patterns of Business Activity) related to the demand for IT services by business activities, and consolidating this information into reports that analyze TCO (Total Cost Ownership) in detail are the starting point for defining Cloud Readiness&Profile Sizing.
This is a document that at WEGG we provide after a Cloud Assessment to identify in detail which services and systems can be migrated to cloud and the recommended sizing based on consumption.
Several elements are considered, including compatibility of services with the cloud, disaster recovery and backup capabilities, networking, as well as all application dependencies to understand whether it is possible to bulk migrate functional units or revise them according to performance optimization needs.
We will take a closer look at all the challenges and opportunities related to migrating to SAP S/4 HANA and specifically SAP S/4 HANA Cloud and then the Rise with SAP program within the webinar we will conduct in partnership with P4I on May 22 (go here to sign up!).
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