SAP Shifting Cloud Platform Pricing To New Consumption-Based Model

SAP is offering a new consumption-based pricing model for the vendor's SAP Cloud Platform, a move that the company said will make it easier for customers to buy Cloud Platform services and build and extend solutions running on the Platform-as-a-Service system.

SAP, which announced the new SAP Cloud Platform purchasing model at the Mobile World Congress this week, also announced an enhanced software development kit for iOS applications and debuted new mobile iOS applications that work with the SAP Cloud Platform and SAP S/4HANA application set.

The previous pricing model for the SAP Cloud Platform was based on a subscription model similar to how SAP charges for Software-as-a-Service applications. The cost was based on a number of metrics including the rate of compute services used and the number of users on mobile systems.

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Under the previous model a customer would have to renegotiate contracts with the vendor when changing the configuration of a cloud service, such as "mobilizing" an application or building a portal accessible to customers, said Dan Lahl, SAP global vice president of product marketing, in an interview.

As the number and range of services running on SAP Cloud Platform has grown, SAP concluded a new consumption model was needed.

"What we're trying to do is make it easier for customers to consume new services [and] spin up new projects," Lahl said.

The executive said the new model is part of SAP's broader move away from monolithic applications and toward a more microservices approach

"It just needs to get done faster and in a more agile way in today's cloud world," he said.

Under the new consumption-based model customers will buy cloud credits that can be applied to consumed platform services. The platform will be a single SKU with a metering service that will help customers configure and price deployments.

"So everything is very transparent while they are utilizing SAP services," Lahl said. "There's more flexibility and it's much simpler, more agile."

SAP will also provide a monthly report on service consumption, making it easier for customers to track usage and expenditures. "It really is an added value we're bringing to the customer side," Lahl said.

SAP, however, is still working on how the new consumption model pricing will be applied to channel partners, according to Lahl. "It's our intent to enable this for the [partner] ecosystem," he said.

Currently customers either pay SAP for partner services running on the SAP Cloud Platform or customers buy all services through the partner with SAP providing the services in the background.

The enhanced SAP Cloud Platform SDK for iOS offers new controls and tighter integration with the Xcode development environment and with other SAP Cloud Platform services. New iOS applications also can tap into services running on SAP Leonardo, the company's IoT and digital innovation platform.

"The whole goal is to take any application and get it to mobile very quickly through integration with the Cloud Platform," Lahl said.

The new iOS mobile applications are SAP Insurance Sales Assistant, which insurance agents use to manage all sales activity, and SAP Asset Manager for managing work orders, notifications, conditioning monitoring, material consumption, time management and failure analysis.