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Moreover, S/4HANA revenue is heavily scrutinized by investors in SAP. The majority of these customers are making another lengthy commitment to SAP which represents a stable, predictable revenue for vendor. The other significant factor is that, if customers undertake the move from R/3 to S/4, they are making a decision that signifies they will remain using SAP in the organization. Consequently, all of its R&D and support investments can go into S/4.

So, in a perfect world, SAP would spend nothing on R/2 today and, 10 years from now, it won't spend any money on R/3. The faster it migrates everyone, the quicker it can stop focusing its investment in resourcing and maintaining R/3. It wants to take its now hundreds of thousands of customers, in particular those R/3 customers with 10,000+ users, and ensure they move over to S/4HANA in a timely manner. ThatвЂ™s precisely what it did, and very effectively. When SAP shifted customers from R/2 to R/3, it had a very small customer base compared to now but its mission was to rapidly migrate every single customer. This is all being done with the promise of improved performance and scalability through in-memory databases. The fundamental change is that the open architecture of R/3, with the ability to employ third-party databases within the system, is giving way to a more specific database that youвЂ™ll require as part of the platform вЂ“ SAPвЂ™s HANA. Now SAP are beginning a transition to a new platform - S/4, where HANA is the underlying database. To all intents and purposes, R/3 has basically had a twenty-five-year lifecycle. Then in the early 1990s they introduced R/3 which was a client server version of the product and became the foundation from which they had phenomenal growth.ДЄlthough no longer called R/3, вЂњBusiness SuiteвЂќ is essentially the modern guise of this product. A brief history of SAPвЂ™s technologiesД«ack in 1979, three years after the companyвЂ™s inception, SAP released a product called R/2 which was a monolithic architecture built for mainframes for performing core ERP functionality. To understand the scale and opportunity of this shift, we must first look to the past. This is an opportunity to reverse that trend and focus in driving deals with hungry SAP account managers on the licenses and technologies you really need, not the ones youвЂ™ve been force-fed over recent years.

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And because it needs to sell S/4HANA licenses, it is offering excellent deals to existing SAP customers to move fast.ДЄnd therein lies a huge opportunity for those existing SAP customers, who have typically seen their investments in SAP license increase year-on-year over quite significant periods of time.

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It needs to demonstrate to investors that it has a business model that is not stuck in the era of on-premise perpetual software licensing. Why? Because SAP needs S/4HANA to be a success. Without over-dramatizing things, itвЂ™s a once-in-a-lifetime opportunity. Not only in terms of technology but in terms of an opportunity to reshape your relationship with SAP. What is often less-discussed is what S/4HANA means for you, the customer.

S/4HANA represents a fundamental shift in how the mega vendor will generate long-term revenue streams.

S/4HANA, for short, is SAPвЂ™s latest technology.

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Why thereвЂ™s never been a better time to reduce ongoing SAP costs In this blog article I look at opportunities available to SAP customers to significantly reduce their ongoing license costs and explain why now is the best possible time to negotiate.В For the practical steps, Snow have created a guide on how to turn shelfware into S/4HANA credit Whether youвЂ™ve been to an SAP event in the past year, attended a user forum, or visited SAPвЂ™s website, you wonвЂ™t have been able to miss it - SAP Business Suite 4 SAP HANA.

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