Exploring SAP BTP Commercial Models and Estimating Costs

These limitations set the stage for the next step in the customer value journey. Juergen explains that the company will have to purchase an enterprise account. Broadly speaking there were two types of commercial models available for this enterprise account to be chosen from: Consumption-based and subscription-based.

Broadly speaking, a consumption-based enterprise account would allow the company to purchase entitlements to all current and future SAP BTP services that SAP makes eligible for this model. Throughout the duration of the contract, they would have complete flexibility to turn services on and off and to switch between services as business needs dictate.

If the decision to go with a consumption account was made, the next step would be to decide which type of consumption account to use. There are three:

• CPEA (Cloud Platform Enterprise Agreement)
• SAP BTPEA (SAP BTP Enterprise Agreement)
• Pay-As-You-Go for SAP BTP

Both the CPEA and the SAP BTPEA models are centered around the following characteristics:

• A prepaid investment in cloud credits for the contract duration with an annual commitment to consume SAP BTP services.
• A monthly balance statement that provides information about the usage consumption of each service and the corresponding costs. The total monthly cost would be deducted from the cloud credits balance monthly.
• A minimum amount to be paid up front, however, both entry and volume-based discounts are available.
• The billing is annually and in advance. Any consumption overages are billed in arrears at list price.
• No prepayment penalty. Cloud credits can be topped off at any time to prevent overages.

CPEA/SAP BTPEA models are suitable for customers that have well-established and planned use cases, and who want the flexibility of turning services on and off, and switching between services, without the commitment of being tied to a single service throughout the duration of the contract (subscription-based model).

The main difference between CPEA and SAP BTPEA is how new SAP BTP services that are added to the consumption-based service catalog are handled. Not all CPEA services will be available in SAP BTPEA. For example, SAP Analytics Cloud, public system option is available in SAP BTPEA only. Notwithstanding this, customers can utilize both the CPEA and SAP BTPEA models as long as they are in separate global accounts.

The Pay-As-You-Go for SAP BTP option is more appropriate for building small-scale apps (as well as proof of concepts and pilots) by paying only for services used. Unlike CPEA/SAP BTPEA no upfront investment is required. Payment is in arrears via monthly invoicing and is based only for what is used beyond free tier limits (discussed in the next section). There's no minimum usage requirement or annual commitment, however, no entry and volume-based discounts are available.

All three consumption models discussed give customers the benefit of some amount of free consumption of SAP BTP services, which helps to defray the costs of using those services. Depending on the service in question, "Always Free" means that the service is included in the overall SAP BTP contract and, therefore, no additional charges are incurred. "Free Tier" means that a certain amount of capacity is provided free, and charges are incurred only for capacity utilized over and beyond that amount. Capacity can vary depending on the service in question. For the SAP BTP ABAP environment, for example, capacity is Hours of Runtime Memory in 16 GB Blocks. For SAP Build Apps, on the other hand, capacity is defined using four metrics: (1) number of builds (2) number of tenants (3) cloud functions and (4) storage, each of which has a defined maximum quantity.

After explaining this to upper management Juergen explained that at the time, about five use cases (with solution architectural diagrams to match) had been created. Based on that information, about 10 different SAP BTP services had been identified. However Juergen emphasized, there was no doubt that additional use cases (with additional solution diagrams to match) would be created, and there was a high probability that additional SAP BTP services (as yet not identified) would be needed. Based on those considerations he recommended that the Pay-As-You-Go for SAP BTP option be chosen initially with the intent to seamlessly transition to either CPEA and / or SAP BTPEA (a global account can have only one type of consumption model active at a time) after a year when additional use cases would have been implemented. In addition waiting a year would provide ample data related to consumption that could be considered in making purchase decisions.

The consumption-base approach served the company well. However, after two years in accordance with a cost audit of all cloud spending, the finance department wondered whether there were potential savings that could be had. At this point, all use cases with supporting solution diagrams had been implemented, and 24 months worth of usage data was available showing exactly which services were being used and for each, how much according to its capacity metric. Armed with this data, Juergen suggested that now might be the time for at least some services to potentially transition to a subscription-based approach.

While, as just mentioned, only one type of consumption model can be active in a global account at any point in time, Organizations can purchase some services based on a consumption model and other services can be purchased via subscription in the same global account. No new global account needs to be created. There were several services that Juergen felt were candidates for a subscription-based approach. As an added bonus, subscription-based purchases usually had the most favorable commercial terms as the exact amount could be negotiated. A subscription-based purchase is categorized by the following:

• The usage of specific SAP BTP services at a fixed cost regardless of consumption
• Fixed contract typically from one to three years
• Price paid in advance when the contract starts
• The subscription can be renewed at the end of the contract period

Under this commercial agreement:

• You're authorized to use only the subscribed services.
• If you wish to use additional services for an additional charge, you can change your contract through your sales representative or account manager.
• You pay a fixed price, regardless of how much of the subscribed services you use.
• You pay in advance when the contract period begins.
• Your company can renew the subscription at the end of the contract period.

The easiest way to evaluate SAP BTP Services & Consumption Models is in the SAP BTP Discovery Center. Since as mentioned earlier, not all services are necessarily available under all commercial models, to facilitate transparency, the SAP Discovery Center allows filtering based on the commercial model.

There is a logical sequence of steps leading up to an estimate. Once a use case has been established and represented by a solution diagram, a cost estimate can be created. Let's continue with Juergen our developer and explore how this can be done. The sequence flow is as follows:

• Business Use Case Assessment
  • Typically, the sequence starts with a business use case assessment where the business case for the software application is established.
• SAP BTP Capabilities Explored
  • From there SAP BTP capabilities and how they may provide a solution to implement the assessment is explored. For example the SAP BTP Discovery Center could be used to ramp up on the different services and how they may fit the assessment.
• SAP BTP Guidance Framework Consulted
  • The SAP BTP Guidance Framework provides a central access point for architects, developers and administrators to build and run enterprise-grade solutions on SAP BTP. The framework comprises of the following elements:
    • Decision guides, which are used to identify the technology option that best fits a scenario.
    • Reference architectures, which are used to explore how to architect solutions on BTP with the help of curated solution templates.
    • Methodologies, which offer a guided approach toward increasing an organizations cloud technology maturity level, covering both technical and organizational aspects.
    • Recommendations for different technology domains that help to evaluate and choose the right implementation option.
    • DevOps principles, which enable development and operations teams to be more efficient.
• SAP BTP Solution Diagram Created
  • There are several solution diagrams in the SAP BTP Discovery Center, which can be used as is or adjusted as needed to comply with different use case assessments. Or new diagrams can be created from scratch. SAP BTP Solution Diagrams provide high-level, abstract illustrations of technical landscapes. They are instrumental in helping customers understand the range of BTP services and solutions that SAP provides, and how they integrate with other SAP products. They typically showcase solution scenarios across IT landscapes by depicting SAP BTP services, systems, environments and their inter dependencies. Being based on the SAP Fiori Horizon design system, they're also visually compelling. Once the diagram is created it serves as the entry point for the estimation.
• Software Bill of Material (SBOM)
  • A bill of materials (BOM) is an extensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service. It lists the finished product or service at the top, followed by individual components and materials. Engineering BOMs are used in the design process while manufacturing BOMs are used in the assembly process. An SBOM follows this pattern. The "components" in this case would be the components needed to build a software application. Reference architectures as just mentioned are a great visual source of the components that would make up an SBOM as the relevant pieces of an application are clearly depicted. Some of the components that a SBOM could specify are:
    • Software component names
    • Open source components used (if any)
    • Licenses used
    • Libraries created or needed
    • Authors
    • Suppliers
    • Versions of components used
    • Dependencies

Having detailed knowledge of the use case Juergen knows what to do next. By leveraging the estimator tools provided, he can meticulously estimate the costs, take into account all the necessary components, and ultimately make informed decisions that align with his company’s objectives and budgetary constraints. The estimator tool provides a user interface that allows him to create estimates of the costs of SAP BTP services based on the quota, metric, and usage of the services being considered.

To facilitate access to the service estimator it can be launched from any of these locations while navigating within the SAP BTP Discovery Center:

• SAP BTP Services Catalog
• Missions
• Reference Architectures
• Control Center (if logged on as a user)

What an architect sees when accessing the estimator largely depends on whether they are logged in or not. If not logged in, they'll immediately see a page where they can create a local estimate. To create an estimate, all that's needed is to perform the following:

• Give the estimate a name (the default name is Local Service Estimate, but it can be changed).
• Select the preferred region.
• Select the preferred commercial model.
• Add in each service for which an estimate is needed.
• For each estimate, add in the sizing and quantity metrics.

To learn how Juergen's estimate is created, watch the following simulation:

In addition to the features discussed, several other features are available regarding estimates in the SAP Discovery Center. First, an estimate is automatically saved as the default estimate with the name "local service estimate". This name can be changed, if desired. In addition the estimate can be downloaded in either PDF or CSV format and can be reset if necessary.

While the aforementioned features do not require the architect to log on to the SAP Discovery Center, they can choose to do so. When a logon is done, the sequence flow of views changes slightly and several new additional features are available. Regarding the sequence flow of views, the home page now becomes a portal, with a variety of tabs and tiles to launch different SAP Discovery Center capabilities (Mission Catalog, BTP Guidance Framework, and so on). Regarding additional features several become available:

• Multiple estimates can be created
• Estimates can be shared with other individuals. This allows collaboration on estimates to take place​
• Estimates can be assigned to a category (that is, Development, Production)​
• Estimates can be duplicated
• Estimates can be deleted

SAP BTP offers flexible commercial models to fit different customer needs, from experimentation to large-scale enterprise use. The three primary models are Pay-As-You-Go (PAYG), Consumption-Based (SAP BTPEA), and Subscription. To help plan and budget for these models, SAP provides the BTP Cost Estimator, a free online tool to calculate potential monthly costs based on your planned service usage.