Gartner Research

Hana Alert: Reduce SAP On-Premises Maintenance Costs by Incorporating SAP's Extension Policy When Licensing Mandatory Hana Solutions

Published: 29 July 2016

ID: G00301402

Analyst(s): Lori Samolsky

Summary

Moving to SAP's next-generation suite of products (SAP S/4HANA) will require customers to buy licenses. SAP Extension Policies enable a reduction in currently/prospectively unused shelfware maintenance, and we recommend customers understand and take advantage of these policies prior to purchasing.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • Technology procurement leaders who are unaware of how much of their current SAP portfolio is, or will be, unused shelfware will miss the ability to negotiate reductions
    • Shelfware can significantly increase long-term maintenance costs when migrating to Hana runtime, unless proactively eliminated
    • Optimization of named user licenses supports long-term maintenance cost avoidance
  • Technology procurement leaders are overlooking third-party provider DBMS contract terms, which restricts partial maintenance termination, thus skewing the total cost of ownership for SAP Hana or S/4HANA migrations
    • Hana replacement TCO will be misaligned without clarifying third-party maintenance termination rights
    • License maintenance for any runtime DBMS solution should be credited in perpetuity as part of the Hana negotiation process
    • DBMS maintenance reductions are more complicated when licensing directly from third-party providers
  • Technology procurement leaders struggling to calculate the trade-in value of their on-premises licenses and maintenance when migrating to S/4HANA will miss SAP's Extension Policies and overpay for on-premises maintenance and cloud solutions
    • Adopting S/4HANA means certain on-premises functionality will be replaced by cloud line-of-business products
  • Technology procurement leaders who do not future-proof their Hana contract with key new terms and conditions that protect their old and new license requirements will lose flexibility and increase the overall future cost for SAP applications
    • The one thing we can predict is that everything will change again

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