SAP’s new generative AI pricing: Neither transparent nor explainable yet

Enterprises subscribing to Rise with SAP, a bundle of services wrapped around the core S/4HANA Cloud ERP application, can now pay extra for Premium Plus, a package of some of SAP’s newest innovations.

Premium Plus includes access to sustainability insights derived from business processes’ carbon footprints and financial costs (SAP’s “green ledger”), new generative AI capabilities accessed through its Joule virtual assistant, improved forecasting, and the ability to create a portal for suppliers to simplify spend management.

The package costs less than the services bought individually, said Eric van Rossum, chief marketing and solutions officer for SAP Cloud ERP — but some of the generative AI services are also subject to additional usage-based charges in a new virtual currency van Rossum called “AI units.”

Different actions will consume varying numbers of these units. Premium Plus customers will receive a certain number of these units as part of their package — the bundled part of the pricing — but when these units have been consumed, customers will have to buy more.

That means enterprises wanting to estimate the return on investment for their use of SAP’s new AI features will need to know how often they expect to use them, how many AI units SAP will deduct for each use case, how much each additional unit costs, how many units are bundled in their Premium Plus subscription, and how much that costs. In other words, uncertainty abounds.

Chip Hanna, advisory practice leader for SAP at IT negotiation advisor UpperEdge, sees this complexity as a recurring feature of SAP’s pricing strategy.