Demystifying the Licensing of SAP Business One

The globally used SAP Business One (B1) software licensing model is widely accepted as one of the best options for SMEs.

Beyond the features and facilities of SAP B1 itself, the licensing model provides users with a level of flexibility and configuration capabilities that allows them to maximise on their SAP B1 software investment.

However, with this flexibility comes a level of complexity. SAP B1 users need to make informed decisions about the right solution and licence arrangement for them. The best approach is to evaluate:

  • Which licence type is the best for your business?
  • How can you decide if a perpetual or subscription approach to your SAP B1 licences is right for you?
  • If you choose subscription can you move to perpetual in the future?

Read on as we provide answers to some of the most frequently asked questions about SAP B1 Licensing. Alternatively, get in touch with our expert business advisory team, who can talk you through your options.

Clearing things up

When it comes to SAP B1 licensing, users have two broad avenues to go down;

The first is Perpetual Licensing for SAP B1, this refers to an up-front investment which effectively means you own the software and can use it for years to come without further costs – other than support and maintenance.

The second option is Subscription Licensing for SAP B1, this would involve an annual renewal cost if you want to continue using the software.

One of the key aspects when making this decision is ensuring that you aren’t holding any incorrect assumptions. For example, some people assume they can only use a subscription when they’re accessing a multi-tenant cloud infrastructure. However, this is not the case – this licence type is available from SAP regardless of how the software is deployed. That includes both on-premises and private cloud-hosted deployments.

Others might simply be unaware that a subscription licence model is even available for SAP B1 with the same level of functionality. In fact, the subscription licence model has been available for upwards of four years. In that time, it’s steadily grown in popularity year-upon-year, with 2020 seeing a particular acceleration in new users choosing subscription over perpetual. With SAP being all about flexibility, it wouldn’t be unwise to estimate that this accelerated trend will plateau out at some point to be 50-50 for each type of licence.

What’s right for me?

In truth, there is no right or wrong approach. Instead, it’s about finding what’s right for your company, which will depend on your culture and overall business plan for the next 5 years. What’s important is that you’re not corralled into a rigid, one-size-fits-all licence model which will feel like a straight jacket in years to come.

 

Consider the example above. In year 1, the subscription licence costs plus the required support and maintenance (Opex investment) might typically be around 50% of the investment required for a perpetual licence (Capex Investment).

However, by year 5, the picture has reversed. The total cost of ownership for subscription software licences plus support and maintenance has risen to around 150% of that incurred for perpetual software licences.

If you choose subscription, there’s nothing stopping you moving to perpetual licensing in the future. It simply means you’ll be waiting longer before moving to the model that’s potentially more cost-effective over time.

What about mobile?

Another consideration when it comes to SAP B1 licensing is the now-mature mobile network. Providing and receiving key data back from field workers has grown in importance for companies in various sectors, such as those servicing vital infrastructure all over the UK. So much so, that cost effective and flexible software licences for users that work remotely with mobile devices is now a major requirement for digital transformation projects.

Thankfully, this functionality can now be accessed using the SAP Business One Mobile App licence. While this is something to factor into your licensing decision, it’s not restricted to either subscription or perpetual models. Again, it’s about considering your business plan and overall approach to determine which investment is best for you.

A transparent approach

Helping potential SAP B1 users make informed decisions is a key part of our consultation. Using our transparent approach, it’s only right to highlight the levels at which SAP volume discounts reside.

It’s also important to factor in how company accountants will report the expenditure for the different investment models on the company accounts. Any immediate capital investment will be seen on the balance sheet straight away, for example.

On top of that, we highlight the preferences shown by any government grants being considered, plus the finance and lease options for perpetual licences (Capex) and the possible benefits that reside within the HMRC Annual Investment Allowance (AIA).

Demystifying SAP B1 licensing

If you need help understanding the best options for SAP B1 licences in order to streamline costs, please contact our Business Advisory Team – we will guide you through the process to ensure you receive the full business benefits available with fully informed decisions about your SAP B1 licence investment.

 

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Do you want to understand the best licencing options for SAP B1 for your business? Speak to our expert Business Advisory Team to help with your selection.

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