| 1© 2011 UpperEdge5 Things Every SAP RelationshipManager Must Know
| 2© 2011 UpperEdgePresenter BackgroundDavid BlakePresident & CEO, UpperEdge, LLCCompany Overview• IT Sourcing and Commerc...
| 3© 2011 UpperEdgeAgenda• Premise• SAP’s Growth Strategy• SAP’s Go-To-Market Approach• HANA• Interdependencies and New Us...
| 4© 2011 UpperEdge• To effectively manage your SAP relationship, make effective strategic sourcingdecisions across the IT...
| 5© 2011 UpperEdge• Seeks to be a €20B company by 2015 Vision tied primarily to organic growth Multi-channel sales appr...
| 6© 2011 UpperEdge• Today: 20% of salesthrough channels• 2015: 40% of salesthrough channels• Drive platform adoption• Opp...
| 7© 2011 UpperEdge• HANA = “High Performance Analytic Appliance”• Data is stored in-memory (RAM) rather than on a disc or...
| 8© 2011 UpperEdge• Besides the HANA machines or devices, there will be an impact to SAPproducts in 2 forms All SAP prod...
| 9© 2011 UpperEdge• Hardware pricing likely based upon a cost per TB For total solution costs, must add licensing costs ...
| 10© 2011 UpperEdge• HANA will eventually impact the core applications and their capacity andspeed to process big data, t...
| 11© 2011 UpperEdge• As SAP introduces new products and functionality, they have a pattern ofrequiring new user licenses ...
| 12© 2011 UpperEdgePackage LicensesPriced by business metricsSAP named usersIndustry packagesEnterprise Extension package...
| 13© 2011 UpperEdge• Every SAP customer should understand indirect access rights Failure to understand and mitigate can ...
| 14© 2011 UpperEdge• Think of the number of different ways in which you may collaborate on differentbusiness scenarios ac...
| 15© 2011 UpperEdge• SAP has stated its 3 tiered product strategy since the beginning of 2010 Provide the value of SAP a...
| 16© 2011 UpperEdge• Ensure there is a well understand engagement model and account managementplan in place with SAP• Ass...
| 17© 2011 UpperEdgeContact: David Blakedblake@upperedge.com617.412.4335For more information on UpperEdge visit:www.uppere...
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5 things every SAP relationship manager must know

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5 things every SAP relationship manager must know

  1. 1. | 1© 2011 UpperEdge5 Things Every SAP RelationshipManager Must Know
  2. 2. | 2© 2011 UpperEdgePresenter BackgroundDavid BlakePresident & CEO, UpperEdge, LLCCompany Overview• IT Sourcing and CommercialAdvisory Firm• Provides strategic advice,relevant insight, and precisemarket intelligence to IT andstrategic sourcing executives• Sole objective is to ensure ourclients establish high-value,best-in-class relationships withtheir most important ITsuppliersBio• 18 years experience within the sourcingprofession• Specializes in the sourcing andnegotiation of enterprise software andservices agreements• Last 8 years as a trusted advisor toGlobal 2000 companies• Hundreds of SAP deals• Advised on over $10B in deals
  3. 3. | 3© 2011 UpperEdgeAgenda• Premise• SAP’s Growth Strategy• SAP’s Go-To-Market Approach• HANA• Interdependencies and New User Types• Evolving Complexity of The License Model• Indirect Access• Impact of Multiple Deployment and License Models• Executive Summary
  4. 4. | 4© 2011 UpperEdge• To effectively manage your SAP relationship, make effective strategic sourcingdecisions across the IT portfolio, and balance your SAP total cost of ownership(TCO), organizations must understand the following:1. SAP’s Challenges, Growth Strategy and Current Market Conditions2. SAP’s Go-to-Market Approach3. Interdependencies Between SAP’s Product and Pricing Strategies4. Impact of Consistently Evolving Complex Licensing Practices5. How most effectively to manage the SAP relationship• Failure to understand SAP at this level puts organizations at a significantdisadvantage in proactively managing the relationship and the broader portfolio This typically leads to waste at the portfolio level, limited downstream sourcing alternatives,and insidious growth of your SAP TCOWebinar Premise
  5. 5. | 5© 2011 UpperEdge• Seeks to be a €20B company by 2015 Vision tied primarily to organic growth Multi-channel sales approach critical for execution• Strategy to achieve this growth: doubling theaddressable market through innovation• Driven by convergence: focused on 4 growth areas On-Premise Solutions (Core Business) On-Demand Solutions (Cloud) On-Device Solutions (Mobility) In-Memory Technology (HANA)• SAP believes HANA is transforming the industry Not only is HANA an in-memory computing solution, it is the go-forwardcenterpiece of everything SAP is doing in the 3 other growth areasSAP’s Growth Strategy2010 2015$110 Billion$220 BillionCloudMobilityIn MemoryComputing/DBBI/AnalyticsMiddlewareCore ERP+ SuiteBI/AnalyticsMiddlewareCore ERP+ Suite
  6. 6. | 6© 2011 UpperEdge• Today: 20% of salesthrough channels• 2015: 40% of salesthrough channels• Drive platform adoption• Opportunity for greatercoverage & deepercustomer touch points• Reinforces importance ofhaving well understoodengagement modelMulti - Channel Go-To-Market ApproachCustomers
  7. 7. | 7© 2011 UpperEdge• HANA = “High Performance Analytic Appliance”• Data is stored in-memory (RAM) rather than on a disc or database Integrated database and calculation layer which allows the processing of massive amounts of real-time data in main memory – provide immediate results from analysis and transactions Replaces the role of traditional databases Application scenarios that used to take 2-3 hours take less than 2-3 seconds• 5 Hardware partners: Cisco, Dell, Fujitsu, HP, IBM Standard BOM developed for HANA to help with hardware product parity• HANA systems will be sold in small, medium, and large sizes 90% or so pre-configured with remaining 10% of custom configuration left to HW partners toaddress particular customer requirements• Expect €1B in HANA pipeline by the end of 2011• Extension of HANA through service packs Aligns with SAP’s stated goal of continuous improvement and innovation without disruptionWhat is HANA?
  8. 8. | 8© 2011 UpperEdge• Besides the HANA machines or devices, there will be an impact to SAPproducts in 2 forms All SAP products are being re-engineered to utilize HANA (On-Premise) New applications are being developed which will be delivered on the HANA ApplicationCloud (On-Demand)• Announcements on the App Cloud coming in September, with product ramp release tobe made in October• Goal is to have 4 global data centers for HANA App Cloud over time –some may be co-located• Specialized applications will sit on top of HANA, such as StrategicWorkforce Planning Will also support transactional workloadsExtending HANA
  9. 9. | 9© 2011 UpperEdge• Hardware pricing likely based upon a cost per TB For total solution costs, must add licensing costs and implementation• Licensing costs only made on a per-customer basis as license model notyet released• 3 options for license model and pricing: Amount of data processed (current SAP license approach) Amount of business value; or Cost savings to customer• One thing is clear, pricing model will not be based on the number ofprocessors as SAP wants you to use as many as possible Aligns with SAP’s goal of helping customers reduce the % of the IT budget that is spent onlegacy infrastructure Goal is to reduce those costs and capture an increase in the customer’s wallet• Capitalize on trend of shifting investments from infrastructure to software solutionsHANA Pricing and License Model
  10. 10. | 10© 2011 UpperEdge• HANA will eventually impact the core applications and their capacity andspeed to process big data, transactions, and analytics in near real-time Will be the cornerstone for SAP’s on-demand strategy (Cloud) Along with the NextGen Sybase Unwired Platform 2.0, will form the foundation for SAP’smobile solutions and on-device strategy• HANA is impacting everything SAP does today, from product enhancements, tonew product development, to its go-to-market approach• HANA’s processing capabilities provide an unprecedented anchor that canthread an entire organization’s SAP landscape, resulting in additional SAPproduct and user licenses as well as special licensing scenarios SAP will be aggressive to capture market share as fast as possible to plant this anchor HANA’s potential for creating value in the customer base is high – its potentialfor significantly elevating the complexity of managing the SAP relationship isequally highImpact of HANA
  11. 11. | 11© 2011 UpperEdge• As SAP introduces new products and functionality, they have a pattern ofrequiring new user licenses for the new functionality and for the deeper reachinto your ecosystem Originally SAP BI could be accessed via professional and limited professional user licenses After the acquisition of BusinessObjects, SAP required new user license categories of BusinessExpert User and Business Info User• SAP is more than likely to develop new user license categories at higher pricepoints to reflect the increased value of having access to the new functionalitybeing licensed and deployed and the contribution across the entire value chain SAP currently maintains 12 different user categories which apply where your employeesaccess SAP functionality A subset of these can also be extended to non-employees in certain scenarios (indirectaccess)Interdependencies and New User Types
  12. 12. | 12© 2011 UpperEdgePackage LicensesPriced by business metricsSAP named usersIndustry packagesEnterprise Extension packagesEnterprise Foundation packageSAP NetWeaver packagesSAP NetWeaver FoundationSAPBusinessSuiteThe Cloud(SAP Business ByDesign, LOB On Demand)Mobility(Sybase Unwired Platform, Afaria, Mobile Apps)In Memory Computing/DB(HANA, Sybase ASE, IQ)Evolving Complexity of The License ModelNamed User LicensesPriced by number of users• Platform adoption drives dependency which significantly expandsSAP’s reach into the customer ecosystem which is key for up-selland cross-sell opportunities• It also elevates the likelihood of special licensing scenariosregardless of the interface to SAP functions and data
  13. 13. | 13© 2011 UpperEdge• Every SAP customer should understand indirect access rights Failure to understand and mitigate can promote significant cost growth and unbudgetedexpenditures• SAP’s stance: License requirements are based on the utilization of the softwarefunctionality independent of the technical interface used to access it• Historically, SAP was vague and passive until learning of a specific scenarioIndirect AccessCustom-developedapplication/3rd partyapplicationSAP SoftwareSAPPlatformUserSAPApplicationUserSAPApplicationUserSAP Certified3rd partyapplication• SAP now has very affirmative licensing policiesand rules regarding indirect access Named user licenses are required for all users of non-SAPsoftware who indirectly access SAP softwareIndirect Access
  14. 14. | 14© 2011 UpperEdge• Think of the number of different ways in which you may collaborate on differentbusiness scenarios across your value and supply chains (“Extended Enterprise”) Internal and external collaboration: Suppliers, Distributors, and Customers• The licensing policies are very complex, and overall applicability will depend onhow your IT environment is structured SAP’s licensing and pricing model is meant to promote the replacement of third party productswith SAP products Further entrenches SAP within your organization and increases SAP’s share of your IT wallet• As customers expand their SAP footprint and extend these and third partyapplications throughout their entire ecosystem, new user licenses and supportfees will be required None of this changes with HANA, Cloud, and Mobility: This likely exacerbates the situation• SAP’s licensing and packaging policies are structured to protect downstreamrevenue opportunities and instill a “If not SAP, why not” mindsetIndirect Access: Why is this Important?
  15. 15. | 15© 2011 UpperEdge• SAP has stated its 3 tiered product strategy since the beginning of 2010 Provide the value of SAP applications and processing capabilities in any manner in which anorganization wishes to consume them On-Premise (Core business); On-Demand (Cloud); On-Device (Mobility)• In-Memory technology (HANA) is the lynchpin to SAP’s product strategy as it tiestogether all 3 deployment models• Multiple deployment models allow SAP to penetrate deeper into a customer’secosystem and impact more business units and people in a more meaningfulmanner that previously capable Aligns with SAP’s goal of having 1 billion people using their software by 2015• Multiple deployment models drives multiple license and pricing models whichultimately elevates the complexity and overhead of managing the SAPrelationship• Longer-term, it provides SAP the opportunity to promote one common cloudbased solution (“The suite always wins.”)Impact of Multiple Deployment and License Models
  16. 16. | 16© 2011 UpperEdge• Ensure there is a well understand engagement model and account managementplan in place with SAP• Assess the quality, integrity, and strength of your SAP relationship Gather input of internal stakeholders, end users, and unbiased third parties who can providecomparative perspective• Drive and demand transparency in all your interactions with SAP Licensing, packaging, pricing, account navigation, downstream implications• Gather intelligence, understand current market conditions, validate, and adapt Know SAP as well as they know you!• Leverage all of the above as input for shaping your broader IT portfolio sourcingstrategies and plansExecutive Summary
  17. 17. | 17© 2011 UpperEdgeContact: David Blakedblake@upperedge.com617.412.4335For more information on UpperEdge visit:www.upperedge.comFor strategic insights on IT sourcing visit:www.upperedge.com/blogThank YouThe EDGE You NeedCheck out our Supplier Scouting Reports which provide IT vendormanagement and executive decision makers with unique insights intomarket and key supplier developments. For more information, visit:www.upperedge.com/insights

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