SAP Offers Enterprise Customers a Consumption Model for Cloud Apps

SAP isn’t going to a full “pay-as-you-go” plan for enterprise cloud apps, but it’s new “consumption-based” model makes it easy for companies to manage and pay for services based on pre-determined estimates of usage and cost.

SAP Cloud Apps

SAP has released a new consumption-based model of software delivery for its SAP Cloud Platform designed to simplify the cost and management of enterprise apps. 

The move is a big change from traditional on-premises software delivery that vendors such as SAP have long adhered to where applications are licensed on an annual basis for a fixed price and usage is not a factor. 

“Whether you utilize the software under the old model you had to pay,” Dan Lahl, vice president of product marketing at SAP, told eWEEK. He compared it to cable TV subscribers having to pay for a bundle of channels whether they watched them all or not. 

“Customers have asked us to offer more flexibility on the projects they want to do,” said Lahl. Under the new plan companies will have more flexibility to access new cloud services as their needs change on the fly. SAP currently offers more than 50 services on its cloud platform. Under the old system customers would have to negotiate a new contract to add new services, a process Lahl said “gums up the works” in today’s fast-paced, competitive environment. 

But SAP is not ready to go all the way to a pay-as-you-go or pay-per-use model – at least not yet. 

“It’s yet to be seen if we want to go to pure pay-per-use,” said Lahl. Instead, SAP is offering cloud credits and a configurator app on the SAP Cloud that’s designed to help IT and line of business managers determine their usage. 

“We try to help the customer on the front end and track usage on the backend,” said Lahl. “Anyone can see say for the Hana database or a service to connect IoT devices to some cloud app what the cost will be.” He also said that customers who pay for these services in advance using SAP cloud credits get a negotiated discount. 

SAP made the announcement February 26 at the Mobile World Congress 2018 in Barcelona where a year ago it announced the SAP Cloud Platform and the first iteration of its SAP Cloud Platform SDK for iOS. 

SAP has enhanced its cloud platform and released the “next generation” of its SDK for iOS which is designed to help companies extend their enterprise apps and processes to mobile devices. To showcase the SDK’s capabilities the company released two new iOS mobile applications developed using the SDK: SAP Insurance Sales Assistant and SAP Asset Manager. 

SAP Insurance Sales Assistant helps insurance agents manage all sales activities by providing comprehensive customer insights and an overview of their Key Performance Indicators. The SAP Asset Manager app for iOS facilitates working with SAP S/4HANA, the company’s in-memory database platform, as well as the SAP Cloud Platform from a mobile device for managing work orders, notifications, condition monitoring, material consumption, time management, and failure analysis. 

Lahl said it’s clear that any serious application vendor has to focus on mobile. “We don’t think of mobility as a separate market anymore, it’s ubiquitous,” he said. “Any new app will have a mobile delivery endpoint at least as an option so we want to make it easier for developers to deliver those apps.” 

The new apps and SDK are in part the result of a partnership between Apple and SAP that started two years ago and that Lahl said was important to help the company enhance the look and feel of its apps. 

The SDK includes new controls for showing such items as timelines, bills of materials and 3D renderings of engine and machine parts that developers can use in their applications. “The two new apps are proxies for the look and feel we want developers to realize they can achieve,” said Lahl. “With the SDK we’ve made complex apps look beautiful.”

CEPSA, the Spanish multinational oil and gas company, is already using the SAP Cloud Platform and endorses SAP’s latest moves. 

“We needed an innovative platform for app development, and SAP Cloud Platform SDK for iOS was a natural choice,” CEPSA CIO Joaquín Reyes said in a statement. “By integrating our SAP backend applications and developing iOS apps for order fulfillment and payment processing, we were able to streamline our business processes throughout our entire value chain. As a result, our employees, partners and service-station managers are now able to improve the overall customer experience.” 

David Needle

David Needle

Based in Silicon Valley, veteran technology reporter David Needle covers mobile, bi g data, and social media among other topics. He was formerly News Editor at Infoworld, Editor of Computer Currents...