The cynic in me
would suggest that is is another move to facilitate the authorities data grab ....
SAP is putting its entire business applications suite online and selling the lot through subscription. The on-premise giant last week announced SAP Business Suite via the SAP Hana Enterprise Cloud service. Underpinning the service is Hana, SAP’s in-memory database technology. Subscriptions are a huge deal for SAP. The world' …
On the face of it they're planning to compete with themselves.
In reality they'll never price the cloud business in a way that erodes their traditional licensing model. It makes no business sense to do so. If they create a headline subscription fee that's low enough to draw interest then expect the caveats and additional cost factors to be even more arcane and inscrutable than their current licensing model.
There are two possible approaches to attacking cloud competitors: either you offer a cloud model which does not undermine your on premise revenue stream or you offer a cloud model that does, but make up the lost on premise profits on the superior volume that you can achieve with the cloud offering.
Never, ever in the history of SAP has a change in pricing resulted in an actual cost reduction for their customers. So the latter will not happen, because of endangering next year or quarter results is not something they can even think about.
By the way, if you replace SAP with Oracle, all the above applies equally well. Seems that their executives can't get around the idea. Microsoft seems to have understood the cloud proposition much better, as it seems (but have not verified 100%) that sometimes it can be actually cheaper to run their products on the Azure cloud than on premise.
When you move to the Cloud, you have to add in the cost of transporting the data there and back again, as well as the risk that the Cloud will fail. So moving to the Cloud only makes sense if there are significant cost savings - this fact seems to have escaped many SAS vendors.
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