How to juggle different licensing options
When adopting SAP S4 HANA, the database component is essential. In fact, the transition to an in-memory database determines a series of advantages and simultaneously many challenges when migrating to the new version.
In this article we will address the licensing of this component as the choices among possible options most often have heavy consequences from a functional and economic point of view.
SAP HANA is SAP's in-memory database, released in 2011 in its first version and constantly updated and enhanced with new features in recent years. As SAP's column-oriented in-memory database, it allows data to be stored in memory, exponentially increasing the processing capacity of the database, which is then able to handle huge volumes of data in real time and support business-critical applications.
In fact, its data visualization, query, and analytics capabilities enable it to create applications, perform advanced AI-supported analytics, use database management tools, and support various data sources, including Big Data and IoT.
To properly license the HANA database, you must first -as stated in the SAP Licensing Guide - take into account which deployment model you are using: i.e. on prem, private cloud or public cloud.
The main licensing options can be divided into four macro-groups:
This is a simplified version of SAP HANA, designed to run on laptops and other hosts, such as cloud-hosted virtual machines. It is used by developers to create and deploy next-generation applications.It is free to use for in-memory databases up to 32 GB and can be expanded to 64, 96 or 128 GB with the purchase of an additional license.
It can be downloaded from this link.
Unlike the Full-Use Edition, the Runtime Edition is limited to a runtime environment for SAP applications. A SAP application is defined as any application that includes NetWeaver Application Server (a web application server specific for SAP products), e.g., S/4 HANA, BW/4 HANA and other related products.
As noted on blogs.sap, this type of license-which is cheaper-allows data extraction only through SAP applications. Extracting information from the database to bring it to third-party business intelligence applications, for example, is not allowed.
The Runtime Edition is considered an integral part of the application itself, so any direct connection to the HANA database to process data that does not go through the application front end is a license violation.
The license is counted using a metric called HSAV, which is a percentage of the value (typically 15%) of one's SAP license assets from both a purchase and maintenance perspective.
We have seen that the Runtime Edition is a HANA database usage option reserved only for SAP applications. Full-use, on the other hand, has no limitations in loading and exporting SAP and non-SAP data directly into and out of SAP HANA: data can be read from both the application and database layers and lends itself to modeling, administration, and the use of advanced engines according to advanced rights.
Full-Use is granted in two ways: Standard (with limited rights) and Enterprise Edition. For S4, the Standard Edition is no longer optional. The Enterprise Edition is licensed on a metric of gigabytes of memory, according to individual 64 GB drive blocks, with a price starting from 120,000 per block.
SAP HANA offers advanced predictive analytics and machine learning capabilities within the database. Compared to Runtime, which is limited to some in-database functionality and predictive use cases, the Enterprise Edition covers all database-level integrations with the ability to provide solutions for different scenarios across all lines of business. Below there is a table from blogs.sap summarizing them:
Keep in mind, too, that using SAP HANA System Replication (SAP HSR) with active/active -to increase database performance- is a feature that you pay extra for over and above the expected licenses.
Knowing the different use cases-Runtime and Full-Use-is important to prepare for SAP negotiations and ensure that you properly license your intended use of the HANA database.
The choice between Runtime and Full-Use is related to the organization's strategy and plans and the capabilities you want to increase in your enterprise architecture. Therefore, before signing up, SAP HANA capabilities should be mapped to the business needs, to choose the most appropriate licensing.
If one's goal is to leverage the HANA database to speed up the ability to run SAP applications or to support the transition to S4 HANA without too many demands, a Runtime license is more suitable, while if one wants to access the full analytical and processing power of the SAP HANA platform to scale one's business, the choice should lean toward a Full-Use license.
Another aspect to consider also relates to the amount of data to manage: since the metrics are very different (HSAV vs. GB), there are cases where a Full-Use license might be more convenient. For example, if you have a very limited volume of data against a high licensing cost (on which you pay the percentage for Runtime), it might also be useful to evaluate the cost of the alternative for which the individual blocks of GB are licensed.
SAP HANA Cloud is a DBaaS (database as a service) foundation that allows the in-memory data processing capability of SAP HANA to be leveraged in the cloud. Officially called SAP Cloud Platform, SAP HANA service, it offers various capabilities such as database management and administration, data security, multi-model processing, application development, and data virtualization.
It is therefore a managed database service, with all the associated benefits (back-up, availability, unlimited scalability). It relies on two cloud deployment options, providing flexibility in the development process: if in the Cloud Foundry environment, it relies on public cloud providers such as AWS, Google Cloud Platform or Azure, while if in the Neo environment it relies on the proprietary cloud hosted by SAP.
The licensing options are similar to the Full-Use of SAP HANA. The Enterprise edition takes advantage of all the features of SAP HANA Service Edition and can start at 32 GB (so it's a great place to start after outgrowing SAP HANA, express edition) and scale up in increments of 16 GB. Subscription licenses and Cloud Platform Enterprise contracts are available (i.e., you pay for what you use).
We always recommend that before planning to purchase licenses for the SAP HANA database, you correctly identify your intended use.
For this reason there must be a close synergy between the IT procurement, R&D, and line of business teams (which define goals and KPIs for innovation) to share database management strategies and programs. Our consultants help companies map needs in assessment to define the best fit need/license and negotiate at the vendor table with awareness.
It can also be useful to include ongoing actions to optimize license costs, as recommended by the expert Gleichmann on blog.sap, which include:
With frequent audits to one's database (reviewing licenses, functionality, configurations, fragmentation, bugs, etc.) it is also easier to make utilization forecasts and consequently make an indicative estimate of future costs (e.g., TCO) to check the real business spending capacity and set indicative KPIs of the expense/revenue ratio.