How to Best Understand The Price of SAP HANA

What This Article Covers

  • SAP Database
  • SAP HANA Cost or SAP HANA Price
  • Getting Realistic SAP Pricing on HANA

Introduction

There has been a great amount of information published about the SAP database called HANA. SAP has touted it to the heavens as the fastest database in the world. This is not true, and SAP has greatly exaggerated what HANA can do. However, what is never discussed by SAP or any of its partners (that make money off of implementing SAP or selling complimentary products to SAP) is that HANA is quite expensive.

In this article, we will get into the SAP HANA cost or SAP HANA price of the SAP database.

SAP Database

HANA is SAP’s first serious foray into databases. SAP has had a few other databases that it owned through the years, like SAP DP or Max DB, but these were very lightly sold. SAP purchased Sybase several years ago, but it has not been able to sell many Sybase databases, and the Sybase acquisition has been a washout, with the Sybase product seen as quite dated, and SAP doing very little to keep the Sybase database line up to date.

SAP has very strongly based its strategy around HANA, but the pricing of HANA is quite unusual.

SAP HANA Cost or SAP HANA Price

The SAP HANA cost or SAP HANA price is based upon the increment of a GB. This is quite an unusual pricing for a database.

What this means is the price of HANA is based on the size or footprint of the SAP database. And SAP has released information that will cause customers to substantially undersize the footprint so that SAP can get their foot in the door with HANA. Customers routinely have to go back to SAP and request more GB, which blows their budget.

Getting Realistic SAP Pricing on HANA

Without an accurate footprint estimate, HANA cannot be priced correctly. However, all the sources of information on sizing the footprint either come from SAP or come from a SAP partner. Companies that are partners with SAP lose control over the information that they provide to customers. They must not provide information that contradicts the SAP information. This includes companies that are the largest advisors in the space (your Deloittes, Accenture, etc..) to the smallest. How do I know this? SAP partners contact me and tell me stories of how SAP threatens to take their partnership away if they don’t follow the SAP rules. No SAP partner can provide accurate information on SAP pricing, SAP HANA pricing or any other SAP pricing for that matter.

Therefore, companies are boxed out of accessing accurate information on this topic. Brightwork Research and Analysis is one of the few entities which will publish or provide consulting on this topic. Unsurprisingly, we have no partnership with SAP, and unlike someone like Gartner or Forrester, we take no money from SAP.

Conclusion

The pricing templates provided on HANA are not reliable and will not result in a correct SAP HANA cost or SAP HANA price. They will result in the database being undersized, and the customer having to go back to SAP to purchase more HANA GB licenses. However, if the customer had known the actual cost when they purchase the initial HANA licenses, it very may well have changed their initial purchase decision. Secondly, the price per GB declines as the size of the database increases. We do not have the information on whether SAP charges an incremental cost for the new HANA licenses or if the customer starts off buying the new HANA GB at “zero.”

However, once data has been migrated and the HANA database has been brought up, there is little in the way of options to move away at that point, and the logical decision will be to purchase more incremental GB licenses of HANA. This is only one of the compound features around HANA that most customers have no idea about when the sign the contract. In our estimate, many IT directors will be hiding the actual results of HANA purchases for years to come.

It should also be recognized that this is sanctioned from the very top of SAP. One of the primary proponents of the faulty and undersized footprint estimation of the SAP database has been none other than Hasso Plattner.

Brightwork Research & Analysis, we perform SAP pricing for quite reasonable rates. We have access to all of the SAP pricing information as well as access to discount information.

References

I cover TCO in the following book.

TCO3

Enterprise Software TCO: Calculating and Using Total Cost of Ownership for Decision Making

Getting to the Detail of TCO

One aspect of making a software purchasing decision is to compare the Total Cost of Ownership, or TCO, of the applications under consideration: what will the software cost you over its lifespan? But most companies don’t understand what dollar amounts to include in the TCO analysis or where to source these figures, or, if using TCO studies produced by consulting and IT analyst firms, how the TCO amounts were calculated and how to compare TCO across applications.

The Mechanics of TCO

Not only will this book help you appreciate the mechanics of TCO, but you will also gain insight as to the importance of TCO and understand how to strip away the biases and outside influences to make a real TCO comparison between applications.
By reading this book you will:
  • Understand why you need to look at TCO and not just ROI when making your purchasing decision.
  • Discover how an application, which at first glance may seem inexpensive when compared to its competition, could end up being more costly in the long run.
  • Gain an in-depth understanding of the cost, categories to include in an accurate and complete TCO analysis.
  • Learn why ERP systems are not a significant investment, based on their TCO.
  • Find out how to recognize and avoid superficial, incomplete or incorrect TCO analyses that could negatively impact your software purchase decision.
  • Appreciate the importance and cost-effectiveness of a TCO audit.
  • Learn how SCM Focus can provide you with unbiased and well-researched TCO analyses to assist you in your software selection.
Chapters
  • Chapter 1:  Introduction
  • Chapter 2:  The Basics of TCO
  • Chapter 3:  The State of Enterprise TCO
  • Chapter 4:  ERP: The Multi-Billion Dollar TCO Analysis Failure
  • Chapter 5:  The TCO Method Used by Software Decisions
  • Chapter 6:  Using TCO for Better Decision Making

Who is the Most Accurate Source on SAP?

Want to find out? See... A Study into The Accuracy of SAP

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