SAP Partner Profitability Index for SAP HANA SAP HANA Solutions for Channel Partners

Global Partner Operations

May 2014 Confidential, for VAR Partners only

2014 SAP AG or an SAP affiliate company. All rights reserved. 2 Confidential for VAR Partner only

SAP announces the Partner Profitability Index

This deck is supplementary to the voice over enablement on the Partner

Profitability Index.

It is not completely self explanatory and does not replace a voice over

session!

Please do not forward without the use of further voice over comments.

This deck intendeds to help explain:

why this new option has been announced

details of the announcement

for which uses cases it is available

how it works from an operations point of view

2014 SAP AG or an SAP affiliate company. All rights reserved. 3 Confidential for VAR Partner only

SAP Partner Profitability Index for SAP HANA SAP HANA solutions for Channel Partners

Situation Today

PPI Summary & Use Cases

2014 SAP AG or an SAP affiliate company. All rights reserved. 4 Confidential for VAR Partner only

Normal Partner Buy Price & Maintenance calculation for

discountable products

SAP/Partner view

Customer view

Indirect deal with SAP-d support and

MUF (Maintenance Uplift Factor)

List Price = MSRP

- Volume Discount

= MSRP / Standard Net

= Recommended SW Customer Buy Price

x 22% for ES

= Customer Mtce Fee

9

9

2014 SAP AG or an SAP affiliate company. All rights reserved. 5 Confidential for VAR Partner only

Normal Partner Buy Price & Maintenance calculation for

non discountable products

SAP/Partner view

Customer view

Indirect deal with SAP-d support and

MUF (Maintenance Uplift Factor)

In case of non

discountable products

we dont reduce the

SW partner buy price,

it will be List Price.

However, the MUF still

has to be applied

Therefore, the

maintenance base for

the customer will be list

price * MUF and the

maintenance fee would

be higher than 22% of

customer buy price

List Price = MSRP

- Volume Discount

= MSRP / Standard Net

= Recommended SW Customer Buy Price

x 22% for ES

= Customer Mtce Fee

9

9

2014 SAP AG or an SAP affiliate company. All rights reserved. 6 Confidential for VAR Partner only

SAP Partner Profitability Index for SAP HANA SAP HANA solutions for Channel Partners

Situation Today

PPI Summary & Use Cases

2014 SAP AG or an SAP affiliate company. All rights reserved. 7 Confidential for VAR Partner only

Background on new Partner Profitability Index

HANA Channel Partner Economic Model

Why

To Accelerate HANA in the GB space the Partner economic model has

a major influence on how fast partners adopt HANA - current model not

attractive for Partners ( for Full-Use HANA License and DB migration

to HANA LREA)

VAR-delivered Support is a critical component of the partner economic

model for profitable resellers

Current better choice program only addresses sales margin; not

overall partner profitability, negative for partner P&L in case of VAR-

delivered support

What

We introduce a Partner Profitability Index (PPI) at max. 30% to address the DB LREA migrations and the HANA full use license business

HANA remain NON discountable. PPI is NOT a discount. If applied, it does reduce the SW partner buy price

The SW partner buy price equals the SAP Maintenance Base for VAR-delivered support and, including the uplift

factor, represents the customers maintenance base for SAP-delivered support. Therefore, the PPI also reduces the maintenance base

The recommended customer buy price (MSRP) = list price, to enable the partner making a margin on SW sales and

VAR-delivered support

2014 SAP AG or an SAP affiliate company. All rights reserved. 8 Confidential for VAR Partner only

SAP Partner Profitability Index Eligibility

Overall focus on General Business segment

Allow partner margin for SW sales & VAR-delivered support

Eligibility for following 3 use cases:

1. All SAP HANA Full Use versions (30% PPI)

(target: indirect installed base and indirect net new

customers )

2. All SAP HANA LREA versions in the case of

pure database swop (30% PPI)

(target: indirect installed base)

3. All SAP HANA LREA versions in the case of

direct customers when the VAR partner offers a

pure database swop as indirect deal with SAP-d

support

(target: direct installed base, different PPI

percentages)

PPI availability

direct indirect

NO VAR & GVAR ARP MCaaS ISV SI

GB Outside GB Not

today

but

WIP

tbd NO NO

Use

Cases

Use Cases &

additional

regional

approval

2014 SAP AG or an SAP affiliate company. All rights reserved. 9 Confidential for VAR Partner only

SAP Partner Profitability Index Software and Maintenance & Support Pricing

Pricing for Use Cases 1 & 2 with VAR delivered Support

- For Use Cases with VAR delivered Support, a flat PPI of 30% will be applied.

* MSRP = Manufacturer Suggested Reseller Price

Partner Margin

SW Margin 30

Mtce and Support Margin 6,6

SW + VARd Support

List Price = SW Partner Buy Price befor PPI

-30% Flat PPI

[based on List Price]

= SW Partner Buy Price

x22% for Enterprise Support or

18% for Standard Support

= VAR Maintenance Fee [annual]

List Price = MSRP

= Recommended SW Customer Buy Price

x 22% for ES

= Customer Mtce Fee

EXAMPLE: SW + VARd Support

List Price 100

- PPI for Use Case 1&2 30

= SW Partner Buy Price 70

x 22% for ES 15,4

= VAR Mtce Fee 15,4

List Price = MSRP 100

= SW Customer Buy Price 100

x 22% for ES 22

= Customer Mtce Fee 22

SAP/Partner view

Customer view

9

2014 SAP AG or an SAP affiliate company. All rights reserved. 10 Confidential for VAR Partner only

SAP Partner Profitability Index Software and Maintenance & Support Pricing

MUF Partner Profitability Index (PPI) for Use Case 3

1,05 4,76%

1,1 9,09%

1,2 16,67%

1,3 23,08%

1,4 28,57%

Pricing for Use Case 3 with SAP-delivered Support

- PPI is aligned with the SAP delivered Support Regional Uplift Factors

- This ensures maintenance price equals 22% for Enterprise Support and 19% for Standard Support of

HANA List Price to customer.

Maintenance Uplift Factor

Customer Segment

APJ EMEA (incl.

DACH)

NA LA

ANZ JapanRest APJ

LE 1,05 1,1

1,1 1,2UME

1,3 1,2 1,05

1,2

LME1,4

SE

SW + SAPd Support

List Price = SW Partner Buy Price befor PPI

-PPI for Use Case 3

[based on List Price]

= SW Partner Buy Price

x Regional Factor

= Maintenance Base

x22% for Enterprise Support or

18% for Standard Support

= Customer Maintenance Fee [annual]

EXAMPLE: SW + SAPd Support

List Price 100

- PPI for Use Case 3 23

= SW Partner Buy Price 77

x Regional Factor 1,3

= Maintenance Base 100

x 22% for ES 22

= Customer Mtce Fee 22

List Price = MSRP 100

= SW Customer Buy Price 100

x 22% for ES 22

= Customer Mtce Fee 22

List Price = MSRP

= Recommended SW Customer Buy Price

x 22% for ES

= Customer Mtce Fee

SAP/Partner view

Customer view

Partner Margin

SW Margin 23

9

2014 SAP AG or an SAP affiliate company. All rights reserved. 11 Confidential for VAR Partner only

SAP Partner Profitability Index Engagement

Who can participate?

All PartnerEdge VARs selling SAP HANA software to the installed base or net new customers. Partners require product authorization for SAP HANA software and support

authorization in case of VAR delivered support.

How to get engaged?

Partners are requested to contact their local SAP contact and provide full insight on the deal to check the use cases (Fill out PPI deal questionnaire)

Local SAP contact to send the PPI deal questionnaire to Joerg Graf to get approval

Partner and local SAP contact to register the deal via GAF and approval workflow will get to Joerg Graf

Joerg Graf to grant PPI as a condition in the deal and workflow will go to the regional / local pricing & contract admins for final approval

There is no need for additional paperwork or legal documents

The PPI will be handled under the PE framework for VARs

When?

PPI is planned to go live at June 2014

2014 SAP AG or an SAP affiliate company. All rights reserved.

Thank You!

In case of additional questions, please contact:

Joerg Graf / Neil Morton / Claus Gruenewald / Markus Fuchs