Common SAP Engine Metrics
SAP’s software licensing includes not only named-user licenses but also engine licenses (also called package licenses) for specific add-on components. These engine licenses are measured by objective usage metrics rather than per-user fees.
Understanding the common metrics used to license SAP engines is crucial for IT leaders to ensure compliance and optimize costs.
This article introduces key SAP engine metrics and summarizes common measures used in SAP ECC and S/4HANA.
Introduction to Engine License Metrics
In SAP licensing, an “engine” refers to a specific module or technical component (for example, SAP Payroll, SAP HANA, SAP EWM) licensed based on a usage metric. Unlike user licenses (which count individual users), engine metrics align with business activity or system capacity.
Each engine has a defined metric that reflects how that module’s value is consumed. For instance, instead of paying per user for a payroll engine, a company might pay per employee on payroll. Engine metrics directly tie the license cost to measurable business operations or system usage aspects.
SAP’s price list contains dozens of different engine metrics. Common metrics include the number of employees, the number of sales orders, annual revenue, annual spend volume, number of processors or cores used, database size in gigabytes, and even industry-specific measures (for example, “barrels of oil per year” in an oil & gas solution). In general, engine metrics fall into several broad categories:
- Transaction or Document Counts: e.g., number of orders processed, invoices posted, or other documents per year.
- Master Data Counts: For example, the number of master records, such as employees in the HR system or business partner records in CRM.
- Business Volume Measures: e.g., total annual revenue or procurement spend managed through SAP.
- Technical Capacity Measures: For example, hardware resources are used, such as database memory (GB) or CPU cores utilized by an engine.
- Activity Throughput: e.g., production output or throughput measured in units produced or weight (tons) per year, shipments handled, etc.
- Industry-Specific Metrics: e.g,. Barrels of oil processed per year (for oil & gas solutions), number of patients (in healthcare), etc.
Each metric is designed to align the license with a key business driver. The idea is that a larger business or heavier system usage requires a higher license volume.
For example, a company with more employees will consume more from a payroll engine, or a company processing more sales orders will derive more value from an order management engine.
Read Examples of SAP Package Licenses.
Summary of Common Engine Metrics
Below is a table summarizing ten common SAP engine licensing metrics and what they typically measure.
These metrics are used across SAP ECC and S/4HANA engines to quantify usage for licensing purposes:
| Metric | Description / Usage |
|---|---|
| Number of Employees | Counts total employees or personnel records in the system. Used for HR/HCM engines like SAP Payroll (employees on payroll). A higher headcount requires a larger license. |
| Number of Orders (per Year) | Counts business orders processed annually (e.g. sales orders or purchase orders). Often used for sales, procurement, or digital access engines. Licenses may be sold in blocks of X orders/year. |
| Annual Revenue | Measures the total revenue processed through the system (per year, in currency). Used for certain financial or sales-related modules to tie license cost to company size. |
| Annual Spend Volume | Measures total purchasing or procurement spend managed (per year). Used in procurement solutions (e.g. SRM or procurement engines) to scale license with purchasing volume. |
| Number of Documents | Counts business documents processed (invoices, financial postings, delivery documents, etc.). For example, SAP Global Trade Services might be licensed by number of trade documents per year. |
| Master Data Records | Counts key master data objects in the system (such as active customer records, vendor records, or material records). Some engines (e.g. SAP e-Recruiting or customer data platforms) use number of records as the metric. |
| CPU Cores / Processors | Measures the processing power allocated (e.g. number of server cores). Technical engines like databases (SAP HANA runtime) or certain infrastructure components may be licensed by cores or CPU count. |
| Memory Capacity (GB) | Measures data volume or memory size used. For instance, the SAP HANA database engine is often licensed per 64 GB of memory. Similarly, data warehousing engines might use total terabytes of data stored as a metric. |
| Number of Locations | Counts organizational units like plants, warehouses, or retail stores. Used for engines tied to physical sites (e.g. SAP Extended Warehouse Management might count warehouses or storage locations managed). |
| Throughput (Production/Logistics) | Measures output or activity volume, such as units produced or shipped per year, or weight of goods handled. For example, manufacturing solutions might be licensed by tons of product produced annually, and logistics engines by shipments or freight weight. |
Each metric above defines the unit the customer must track to stay within licensed limits. The actual definition of each metric is specified in SAP’s contract or usage definitions.
For example, “number of employees” typically means the count of active employees in the system (often including anyone processed in payroll, even retirees if paid). “Number of orders per year” usually refers to all orders created in 12 months, and may reset annually. Technical metrics like memory or cores are usually measured as a peak or allocated capacity.
It’s important to note that some engines use tiered or combined metrics. For instance, a solution might charge a flat fee up to a certain usage threshold and additional fees beyond that.
Other engines might consider multiple factors (though most have one primary metric). SAP offers detailed definitions for each metric in its Software Use Rights documentation, ensuring customers know exactly what counts toward license consumption.
Why These Metrics Matter
These engine metrics tie license fees directly to business operations and growth.
This alignment has benefits and risks:
- Scalability: Companies pay in proportion to their usage. If your business is small or usage is low, you pay less; costs grow as you use the software more intensively.
- Business Alignment: Metrics often reflect business KPIs (e.g., headcount, revenue), making it easier to justify license costs as the business value grows.
- Compliance Risk: The software typically does not automatically cut off when you exceed licensed metrics. If your usage (employees, orders, etc.) exceeds what you purchased, you become non-compliant, which can lead to audits and unplanned costs.
- Shelfware Risk: Conversely, if you overestimate and purchase far more capacity than needed (e.g., licensing for 1,000,000 orders/year but only using 100,000), you’ve tied up budget in unused licenses and ongoing maintenance fees.
Understanding common metrics allows SAP license managers to monitor usage better. Each engine’s metrics should be tracked regularly (monthly or quarterly) to avoid surprises.
For example, if you have an engine licensed for up to 500,000 documents per year, you should know if you’re close to that annual count by mid-year. Organizations can proactively manage their SAP engine licenses by knowing the metrics and where to find them (in SAP reports or business reports).
Read Measuring Usage for SAP Engine Licenses.
Conclusion
In summary, SAP engine metrics convert software usage into quantifiable business measures such as employee counts, transaction volumes, or resource sizes. IT leaders should familiarize themselves with the specific metrics applicable to their SAP landscape.
This foundation is critical for compliance (staying within licensed limits) and financial planning (budgeting for license growth as the business grows).
In the next steps of license management, companies need to measure these metrics accurately and regularly, which we will explore in detail in subsequent articles.
