Exploring SAP BTP Commercial Models

SAP BTP has several different commercial models, the use of which are not always mutually exclusive, and this usage can change and evolve over time as a company's needs dictate.

In Unit 2 Lesson 3, Summarizing SAP BTP Architecture, we explored the account model concept with SAP BTP (that is, global account, subaccount, directory, and so on). We now return to that topic in this lesson from a slightly different perspective: cost management. All projects and IT landscapes have budgets. While an SAP BTP solution architect need not be an expert in all aspects of account cost management, some basic skills such as knowing the different types of commercial models and how they may impact costs when designing an architecture are necessary. To that end, we look at some of the different types of commercial models that are possible with SAP BTP. In the next lesson, we show how an architect can provide estimates as to the cost of SAP BTP services based on a specific use case.

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.

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, 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 this consideration, the Pay-As-You-Go for SAP BTP option was chosen with the intent to seamlessly transition to either CPEA 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 along with 12 months worth of consumption data to evaluate and consider.

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 was 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, SAP BTP does allow customers to purchase some services using the consumption model that's active and other services to be purchased via subscription in the same global account. No new global account needs to be created. A subscription-based purchase is categorized by the following: 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.

• 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

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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.

You can select the commercial models in the SAP Discovery Center.

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.

Commercial models