Businesses today have a growing need to decode real-time data and analyze it for tracing any hidden trends. The use of SAP HANA is tailor-made for such quests as it helps enterprises trace performance by offering real-time analytics by developing and deploying unique real-time applications. SAP HANA is available as both an on-premise platform as well as SAP HANA cloud making it a popular enterprise tool.

The machine learning capabilities offer business the advantage of high-value predictive analytics. It is no surprise that a move to SAP HANA is on the wish list of many enterprise IT teams.

But is a transition to SAP HANA offering value for money for its transformation benefits or is it too costly an affair for small to medium enterprises?

A transformation to HANA can add value to the business. For any enterprise sitting on the fence and looking for a possible SAP HANA migration, here is a look at 5 essential SAP HANA cost factors to evaluate before going ahead.

1. High Hardware SAP HANA Costs

Before thinking of a possible migration to SAP HANA, an enterprise must be aware of the associated hardware cost. While SAP HANA systems are increasingly becoming more affordable, the price point can still be quite high especially for enterprises on a short IT budget. The price points of an SAP HANA hardware depends on the memory of the associated hardware appliance. The core hardware components can be divided into CPU, base platform, processor, memory, SSD and interconnect.

To understand the hardware costs associated with SAP HANA it is imperative to know that HANA requires Intel E7 CPUs, costing over $4000 each approximately. A 512GB HANA system will, therefore, require 4 of these which come close to $16000. SAP HANA requires SSD Storage from Fusion-IO in most cases, which costs on an average $9500 for a 512GB system. In addition SAP HANA requires SuSe Linux, which has a price point of $6000 for 3 years license including support. In addition the 512GB RAM costs around $7500. Adding all the components the tentative price range for SAP HANA hardware cost varies in the vicinity of $39k-$45K for a 512GB system.

2. Additional Cost for Database Spends

SAP has slowly but surely replaced all database environments like Oracle in many customer environments. As a business strategy, such a replacement of database has helped SAP do more than just running an enterprise business application through the SAP HANA. Data access through these databases, however, can also mean an extra fee or rise in the cost of SAP HANA transformation. For any third party systems looking to access such a database may lead to a situation where enterprises are likely to shell out additional licensing fee and maintenance costs.

3. Choosing the Apt License Metric

The cost of SAP HANA varies as per the chosen licensing metric by the enterprise. SAP allows for two distinct payment licensing structures and choosing the right one requires due diligence. The first licensing method is payment by volume of data while the second one is in the runtime database charge. When enterprises opt for a runtime database charge a HANA Software Application Value or HSAV is used to calculate the total value of applications that run on SAP HANA. A fixed fee of 15 to 20% is then applicable as per the purchase price of those applications. As an enterprise, if you are opting for runtime database charge metric for SAP HANA costing, ensure you are bargaining hard while purchasing SAP applications capable of running on HANA architecture.

4.Choosing SAP HANA Application Management Service Provider

As an enterprise, deciding to move to SAP HANA can mean moving into largely unknown territory. To make the transition cost-effective and smooth, the use of an effective application management service provider is of paramount significance.  Choosing the wrong application management service provider can lead to unwanted cost escalations. Opting for an experienced AMS provider can ensure a cost-effective transition to the SAP HANA environment.

5. Migration to S/4HANA Has Higher Cost Considerations

SAP with its introduction of SAP Business Suite 4 SAP HANA or SAP S/4HANA implementation is allowing businesses to drive instant value for all industry verticals. While SAP S/4HANA is today the go-to tool for many enterprises, but upgrading to S/4HANA may require payment of an additional licensing fee. As an enterprise, it is imperative to consider the additional hardware, software and maintenance costs associated with S/4HANA along with training of in-house database administrators for such a change in the future.


SAP HANA with its innovative in-memory database is helping businesses unlock their potential by embracing a digital analytical landscape. The movement to SAP HANA should, however, take into account the affiliated costs and licensing fee to make the transition a financially feasible one.