SAP HANA Database Licensing Explained: Runtime vs Full-Use and Costs

SAP HANA Database Licensing

Introduction: Why SAP HANA Licensing Matters in 2025

SAP HANA is the in-memory database at the heart of modern SAP systems.

As of 2025, any organization adopting SAP’s flagship products (like S/4HANA or BW/4HANA) must run them on HANA.

This makes SAP HANA licensing a critical piece of your IT strategy. Choosing the right licensing model – runtime vs full-use – can have a huge impact on your costs and flexibility.

It’s not just a technical decision; it’s a financial and strategic one. Missteps in HANA licensing can result in paying significantly more than necessary or encountering compliance issues in the future.

In this article, we break down the HANA licensing models, costs, and common scenarios so you can make an informed decision and avoid costly surprises.

Read our complete guide, SAP S/4HANA & HANA Licensing Guide: Migration, Models, and Cost Optimization.

SAP HANA Licensing Models Overview

SAP offers two primary licensing models for the HANA database: SAP HANA Runtime and SAP HANA Full-Use.

• HANA Runtime License: A limited-use license intended only for SAP applications. It allows you to use the HANA database solely to support SAP software (such as S/4HANA, SAP BW, SAP Business Suite, etc.). This is often bundled or attached when you purchase SAP applications on-premise. It’s the cheaper option, but it comes with strict usage limits.
• HANA Full-Use License: An unrestricted license that allows you to use HANA as a standalone database for any application – SAP or non-SAP. This is sometimes referred to as the “enterprise” or “platform” edition of HANA. It’s required if you plan to use HANA beyond just supporting SAP’s own applications. Full-use licensing grants you complete freedom with the database, at a significantly higher cost.

Which model comes with what?

Typically, if you buy an SAP application like S/4HANA on-premises, you have the option to license HANA under the runtime model (many SAP ERP customers go this route to save costs).

The runtime license is tied to that application. In contrast, if you intend to use HANA as a multi-purpose data platform (or run third-party software on it), SAP will insist on a full-use license. In summary, Runtime is designed for SAP-only environments, while Full Use is suitable for broader use cases.

HANA Runtime License Explained

A HANA runtime license is a cost-effective way to license the HANA database for SAP applications only. Think of it as a constrained license: it’s only valid when HANA is used underneath SAP software like S/4HANA, SAP BW/4HANA, SAP Business Suite, etc.

If you stick to standard SAP applications, the runtime license covers your needs at a much lower price point than full use.

Pricing: The HANA runtime license is generally priced based on the value of the SAP application it supports, not on the HANA hardware size directly. A common approach is around 15% of the SAP application’s license value.

For example, if you purchased an S/4HANA software package for $1,000,000, the HANA runtime database license might cost roughly $150,000 as a one-time fee. (This percentage can vary, but 15% is a frequently cited figure.)

This pricing model is an incentive – SAP makes HANA affordable in this context since you’re essentially “locking in” to their technology stack.

Annual support fees for the HANA runtime license will be added on top (typically ~22% of the license fee per year, as with other SAP licenses), but the base cost is still a fraction of a full-use license for the same database.

Usage Restrictions:

The runtime license comes with strict limitations. You are contractually **restricted to using HANA only for the SAP applications it was licensed for. All data in the HANA database must be accessed and manipulated through the SAP application’s own interfaces and tools.

You cannot build custom applications that bypass the SAP application and directly query HANA tables.

You also cannot connect third-party reporting tools or load external data into HANA under a runtime license (except perhaps via the SAP application itself).

In practical terms, this means no custom schemas in HANA, no direct SQL queries from outside SAP, and no non-SAP workloads.

If you violate these terms (for instance, connecting a third-party BI tool directly to HANA or building a custom app on HANA), you would be in breach of license, and an audit could force you to purchase a full-use license after the fact.

Included in SAP Bundles: In many on-premise deals, the HANA runtime license is bundled or at least offered alongside your SAP software purchase. It’s not “free” – you pay that percentage cost – but it’s acquired as part of deploying the SAP system. The runtime license is tied to that specific SAP product environment.

Notably, if you have multiple SAP systems (say one for ERP and one for BW), each needs its own HANA runtime license (more on that in the FAQ).

Ideal Use Case: The runtime model makes sense if you only intend to use HANA to power SAP’s own products. Many traditional SAP customers fall in this category: for example, a company that just needs HANA to run S/4HANA and isn’t interested in using HANA for anything else.

In such cases, the runtime license keeps costs low and covers the necessary usage. It’s essentially a “behind-the-scenes” database license. The trade-off is that your HANA environment is off-limits for any innovation outside of the SAP applications.

For organizations that don’t need any non-SAP integration at the database level, this trade-off is well worth the large cost savings.

Summary of Runtime: Cheaper (a fraction of full-use cost) and sufficient for SAP-only needs, but completely restricted to SAP application usage. It’s like a database license with blinders on – it will do the job for SAP software, but nothing else.

HANA Full-Use License Explained

A HANA full-use license unlocks the full power of the SAP HANA platform for your organization.

Under a full-use license, you can use HANA without restrictions: it can serve as the database for SAP applications and for any other applications, custom developments, or third-party tools.

This is the model you choose when you intend HANA to be an enterprise-wide data platform, not just an SAP app backend.

Pricing Model – Memory-Based: Unlike runtime, which is tied to application value, full-use HANA licensing is based on the size of the HANA database. This is often referred to as memory-based licensing.

You purchase HANA capacity in fixed blocks (commonly in 64 GB increments of memory, though exact metrics can depend on SAP’s current price list).

For example, SAP might have a list price of say $50,000 per 64 GB of HANA memory for the full-use license. If you need a HANA instance with 256 GB of memory, that would be equivalent to 4 blocks, with a list price of $200,000.

The actual price is negotiable – typically, large enterprises negotiate discounts, especially if bundling with other products – but SAP is known to give smaller discounts on HANA full-use licenses compared to application licenses.

In general, full-use licensing is much more expensive than runtime licensing for an equivalent scenario, because you’re paying a premium for open usage rights. Annual support (22% of license cost) applies here as well, which, on a higher base license fee, becomes a significant yearly cost.

No Usage Restrictions: The big advantage is freedom. With a full-use license, your HANA database can be accessed by any application or user.

You can create custom schemas, build new analytics applications that directly query HANA, integrate third-party data sources, or even run multiple SAP and non-SAP workloads on the same HANA system if you want.

There are no contractual restrictions on what data you put in HANA or what tools connect to it. The only “limit” is the technical capacity (the amount of memory you licensed).

In other words, you are paying for a certain size of HANA, and you can use that capacity however you see fit, no matter the use case. This flexibility is what you’re paying the premium for.

Use Cases Requiring Full-Use: Organizations choose full-use HANA licenses if they have plans beyond vanilla SAP usage.

Some common scenarios:

• You want to build custom applications or extensions that run on the HANA database for high-performance needs.
• You plan to use HANA as a consolidated data platform, maybe pulling in data from non-SAP systems for real-time analytics alongside SAP data.
• You have multiple SAP environments (like ERP, BW, and others) and wish to run them on one HANA instance to reduce infrastructure footprint – a full-use license can cover that combined scenario (whereas runtime licenses generally cannot be combined on one database).
• You are deploying solutions on HANA that are not SAP at all (for example, a third-party or open-source application that you want to utilize HANA’s in-memory speed for).
• In general, any situation where the scope of HANA usage goes beyond “just supporting SAP ERP” will point to needing a full-use license.

Higher Cost Consideration:

Full-use licenses can become one of the largest cost items in an SAP landscape. As your data volume grows, you may need to purchase more HANA memory blocks. Each increment can be pricey, so customers must pay close attention to sizing and growth (we’ll discuss cost management tips later).

It’s not unheard of for the HANA database license (full-use) to cost as much as or more than the application software itself in large deployments. SAP sometimes offers “enterprise edition” bundles with additional HANA features (like advanced analytics, etc.) included, but those come at an even higher price.

The key point: you pay for flexibility. If you need that flexibility, budget accordingly.

Example Scenario: Imagine a company that uses S/4HANA and wants to build a custom data warehouse on the same HANA system, plus maybe feed IoT data into HANA for analytics.

They estimate needing 512 GB of HANA memory to cover everything. With full-use licensing, if the price is (for example) $50k per 64 GB, that’s $400k list for 512 GB. Even if they negotiate a discount, it’s still a hefty sum.

They accept this because it enables broad usage of HANA for multiple purposes. By contrast, if they had stuck to a runtime license just for S/4HANA, maybe they’d have paid something like 15% of the S/4 license (say S/4 license was $2M, runtime ~$300k) – lower, but that runtime HANA could only be used for S/4. This illustrates the cost-versus-flexibility trade-off between runtime and full use.

How SAP HANA Is Priced

SAP’s pricing approach for HANA reflects its position as an in-memory database, where memory equals capacity equals cost.

Here’s how the two models compare in terms of cost:

• HANA Runtime License Pricing: Priced as a percentage of the SAP application’s license cost. You pay once upfront for a runtime license tied to your SAP product. There is no explicit technical metric like GB of memory in the contract for runtime licenses; however, the sizing of your HANA is implicitly related to the size of your SAP deployment. (SAP expects that if you bought X dollars of S/4HANA, the HANA database size will be roughly within a certain range.) The key point is you are not buying “64 GB blocks” in runtime mode – you’re buying a license entitlement to use HANA for that SAP system, regardless of exact memory, as long as it’s for that SAP use. This often makes runtime very attractive cost-wise, because if your SAP system grows moderately, you usually don’t have to immediately buy more database licenses (unless you truly exceed normal bounds).
• HANA Full-Use License Pricing: Priced by memory capacity units. You decide how much HANA memory you need (across your landscape or for a particular HANA instance) and purchase that amount. If you need more memory later, you have to purchase additional blocks of HANA licenses. This model directly ties the cost to the technical footprint – the larger the database, the higher the cost. It’s straightforward but can become expensive as data grows. SAP HANA full-use is considered a premium offering, and SAP’s discounts on these licenses are often limited. It’s not uncommon for large enterprises to spend millions on HANA full-use licenses for big environments.

To highlight the cost difference between runtime and full use, here is a comparison table:

Note: Technically, the HANA software is the same regardless of license – the difference is purely in licensing rights. It’s possible to start with a runtime license and later convert to full-use if needed (by paying the price difference).

Still, that transition should be planned carefully (often it’s easier to negotiate better terms before you’re locked in). We’ll discuss conversion and upgrades later.

Licensing Scenarios to Watch

Certain deployment scenarios can confuse or conceal hidden licensing pitfalls. Pay special attention to the following situations and how they relate to HANA licensing:

• S/4HANA On-Premise Deployments: If you’re implementing SAP S/4HANA on-prem, you must license the HANA database separately. In almost all cases, a HANA runtime license is the most cost-effective choice here unless you have plans to extend HANA’s use. Use the runtime license to keep database costs low for your S/4HANA system. Only consider full-use if you know you’ll integrate non-SAP systems or custom solutions directly into the HANA database. Also, remember, the runtime license for S/4 does not automatically cover other SAP systems – it’s tied to that one S/4HANA environment.
• BW on HANA or BW/4HANA Licensing: SAP Business Warehouse (BW) can also run on a HANA database, and similar rules apply. SAP offers a runtime HANA license specifically for BW workloads (in fact, there was a “HANA Runtime Edition for BW” in SAP’s price list). If you’re running BW/4HANA or a BW system on HANA, you can use a runtime license restricted to BW. However, be cautious with scenarios where BW and another SAP application might share a HANA system. For example, if you attempt to run BW and S/4 on the same HANA database, runtime licenses might not suffice because two different SAP products are accessing one HANA instance. SAP’s policy is usually one runtime license per product per HANA instance. In cases of multi-use or advanced BW customizations, you may be pushed towards a full-use license. The bottom line: BW on HANA can be covered by a runtime license if it’s isolated, but mixing workloads or doing unusual things (like custom BW-based data marts) might require full-use. Always clarify with SAP if in doubt, to avoid a license audit issue.
• Non-SAP or Custom Applications on HANA: This is a big one – anytime you plan to use HANA for something other than an SAP app, you need a full-use license. If you have a third-party application or you’re developing an in-house application that you want to run on HANA for performance, the runtime license is off the table. Even if that third-party app is reading data from S/4HANA’s tables, if it connects directly to HANA, SAP will view it as unlicensed usage under a runtime agreement. To support custom apps, external analytics tools, or third-party software on HANA, factor in the cost of a full-use license for the appropriate memory size. Many license compliance troubles have come from customers unknowingly letting a power user connect a tool like Tableau or a Python script directly to the HANA database on a runtime license – such usage is not allowed without full-use rights.
• Cloud Deployments on Hyperscalers (BYOL vs. Pay-As-You-Go): If you deploy HANA on a public cloud infrastructure (IaaS) like AWS, Microsoft Azure, or Google Cloud, you have two licensing options:
  • BYOL (Bring Your Own License): You use a HANA license you’ve purchased from SAP (runtime or full-use) and deploy HANA on a cloud virtual machine. This is essentially the same as running on-prem, just on cloud hardware. It makes sense if you already invested in HANA licenses – you avoid paying again. Ensure your SAP contract doesn’t restrict the deployment location (generally, it doesn’t, as long as the cloud VM is an approved HANA hardware environment).
  • Pay-As-You-Go from the Cloud Marketplace: The hyperscalers offer SAP HANA instances on an hourly or subscription basis (for example, AWS has HANA One and other offerings). When you use these, the HANA license is included in the hourly rate. In effect, you’re renting a full-use HANA license by the hour. This model can be convenient for short-term needs, prototyping, or variable workloads. However, over the long term, it’s usually more expensive than BYOL if you have steady usage, since cloud vendors charge a premium to cover the SAP license cost in those hourly fees. Key point: For a steady production system, if you have the capital, buying a license (or using an existing one) and running HANA in BYOL mode on the cloud is often cheaper than paying hourly rates indefinitely.
• SAP HANA Cloud (Database as a Service) – RISE vs. Standalone: SAP now offers SAP HANA Cloud, which is a cloud-based subscription service for HANA as part of the SAP Business Technology Platform (BTP). If you opt for RISE with SAP (the SAP S/4HANA cloud bundle), the HANA database is delivered as part of the subscription service. In RISE or S/4HANA Cloud editions, you don’t separately deal with a HANA license at all – SAP manages the HANA in their cloud, and your subscription fee covers it. Essentially, it’s like having a runtime license bundled (you can’t use that HANA for anything outside of the cloud service). On the other hand, if you want to use SAP HANA Cloud standalone (for example, to spin up a HANA database on BTP for custom development or as an analytics database), it operates on a cloud pricing model. SAP HANA Cloud is priced on a consumption basis – you pay for the capacity (memory, storage) and duration you use, via subscription or credits. It’s separate from the on-prem licensing discussed above. One important note: You cannot take an on-prem HANA license and apply it to SAP HANA Cloud service – it’s a different model entirely. So, if you plan a future architecture using SAP’s own cloud database services, factor that in. In summary, HANA licensing in the cloud can mean either using your existing license on IaaS or subscribing to HANA Cloud on SAP’s platform. Each has cost implications: RISE bundles it (but you pay in the subscription), BYOL maximizes your existing investments, and HANA Cloud service is OPEX/consumption-based.

Optimization and Cost Control Tips

Getting the most out of your HANA licenses – and not overpaying – requires a proactive approach.

Here are some strategies to optimize costs and avoid common pitfalls:

• Choose Runtime Whenever Feasible: If your usage of HANA is confined to standard SAP applications, always opt for the cheaper HANA runtime license. Don’t let SAP upsell you to a full-use license “just in case” if you have no concrete plans for it. The cost difference is substantial. Start with runtime to keep costs down, and remember you can upgrade later if truly needed.
• Only Pay for Full-Use If Necessary: Conversely, if you do need HANA’s full capabilities, plan for that deliberately. Justify the full-use license with clear business needs (e.g., “We will build X custom application on HANA” or “We need to consolidate Y systems on one HANA”). This ensures the significant extra spend is tied to real value. Avoid buying full-use licenses preemptively “just in case” without a plan – they might sit underutilized while your money is spent upfront.
• Right-Size Your Memory (Avoid Over-Provisioning): Because SAP HANA is memory-based and licenses scale with memory, sizing is critical. Work closely with your SAP Basis team or architects to estimate the HANA memory needed for your system landscapes. Don’t simply over-size the environment with a huge safety cushion “just to be safe,” because that will directly inflate your license cost. Use SAP’s sizing tools and conservative-but-realistic growth projections. You can add more memory (and purchase additional capacity) later if needed, but you can’t get a refund on unused licensed capacity. In short, treat memory like gold – only buy what you need in the near term, and plan to scale gradually.
• Implement Data Tiering and Archiving: Not all data needs to sit in expensive in-memory storage. SAP HANA has options for tiered storage (hot, warm, cold data tiers), and you can offload older or less frequently accessed data to cheaper storage solutions (disk, or a data lake, etc.) using tools like NSE (Native Storage Extension) or Data Tiering Optimization. Also, implement a strong data archiving policy for your SAP applications. By keeping your active HANA memory footprint as lean as possible, you reduce the amount of memory you need to license. This is a technical solution to a licensing cost problem. For example, archiving five-year-old transactional data out of HANA could save you from having to license an extra 128 GB of memory, which is real money saved.
• Negotiate Future Growth Upfront: When making the initial HANA license deal with SAP, try to lock in pricing for future expansions. If you suspect that in 2-3 years you’ll need to double your HANA memory, negotiate the option to purchase additional blocks at the same discount or rate you get now. Without this, you might find in three years that SAP charges list price (or a lower discount) for the new capacity because you have less leverage at that point. In large SAP agreements (especially if you’re migrating to S/4HANA), you can often negotiate a pricing schedule for HANA growth or even some included capacity to cover near-term growth. The goal is to avoid the situation where your environment grows and you face an unexpectedly large bill to stay compliant. Also, be aware of contractual clauses – if your contract has a specific cap or requires true-ups at certain memory usage levels, be familiar with them in advance.
• Monitor Usage and Stay Within Entitlements: Treat HANA license management as an ongoing task. Use SAP’s tools (like measurement programs, system reports, or third-party license management tools) to track how much HANA memory is in use and ensure you’re within your licensed amount. Also, monitor how HANA is being used – ensure nobody is connecting unauthorized applications in a runtime scenario. Early detection of a possible compliance issue allows you to address it (either stop the offending usage or talk to SAP about licensing it properly) before an official audit happens. This proactive approach can save money and headaches, as it’s always better to resolve issues voluntarily than under audit pressure.
• Leverage SAP’s Licensing Programs or Bundles: Keep an eye out for any SAP programs that might reduce HANA licensing costs. For example, SAP has at times offered promotions, such as including a runtime HANA license at no extra cost for certain customers migrating from legacy systems, or bundle deals (like a flat fee for S/4HANA + HANA + some cloud services). If you’re a significant SAP customer, talk to your SAP account executive about any incentives. Just ensure you break down the bundle pricing to confirm it’s truly a good deal and not just hiding costs. Being a savvy negotiator with SAP can lead to significant savings, since pricing is often flexible if you have the right leverage (new project, competitive threat, etc.).

HANA License Compliance and Audits

SAP is known for its strict license compliance audits, and HANA has become a focus area in recent years. Here’s what you need to know to stay out of trouble:

SAP HANA License Audits: SAP has audit tools and scripts (run via SAP’s License Audit workbench or System Measurement tools) that specifically check HANA usage.

They can detect:

• The amount of memory installed/used versus what’s licensed (for full-use licenses).
• Whether any unauthorized users or schemas exist in the HANA database (which can indicate non-SAP usage on a runtime license).
• Specific features are being used that your license edition might not cover.

If you’re found exceeding what you bought – e.g., using more GB of HANA than you paid for, or using HANA for something outside the allowed scope – it’s considered a license breach.

Consequences of Non-Compliance:

In an audit, SAP will typically require you to purchase the necessary licenses to cover any shortfall, often retroactively (which can include back-maintenance fees for the period you were out of compliance). For example, suppose you had a 256 GB full-use license but were actually using 300 GB.

In that case, SAP will ask you to purchase the additional 44 GB (usually in a block increment, such as an additional 64 GB license) and likely backdate the maintenance costs to when the usage exceeded 256 GB.

If you were using a runtime license, but it turns out you had a custom app connected, SAP could demand you convert to a full-use license for that environment, which might mean a hefty unplanned purchase. Compliance penalties can be very expensive, so it’s not a risk you want to take.

Monitoring and Internal Audits:

To avoid surprises, perform your own internal license audits regularly.

Check your HANA instances:

• Are they within the licensed memory capacity?
• Are all users and clients connected to HANA legitimate (only SAP application users for runtime)?
  SAP provides guidelines on how to measure HANA usage; for instance, there are SQL queries or HANA cockpit views that show memory allocation. By reviewing these, you can spot if you’re near your licensed limit or if someone created an unauthorized schema. Catching these issues internally allows you to either curtail the usage or budget for additional licenses before SAP’s auditors come in.

Education and Controls:

Often, compliance issues are inadvertent – a well-meaning developer might connect a data visualization tool to HANA because it’s technically easy, not realizing it violates the license. Educate your IT staff and power users on what is allowed under your current HANA license.

Implement controls in your landscape: for instance, don’t give out HANA database credentials except to those who truly need them, and restrict the creation of database users or schemas in production. Such governance ensures nobody accidentally triggers a “SAP HANA license audit” nightmare.

Audit Preparedness: Keep documentation of your licenses and usage. If you have a full-use license, maintain records of how you calculated the needed capacity and any communications with SAP about usage if using runtime, and document which SAP systems are on each HANA license.

This way, if SAP sends an audit questionnaire, you can respond confidently and accurately. Being organized can sometimes also deter auditors from digging too deeply if you demonstrate clear control over your licensing.

In summary, treat license compliance as an ongoing duty. SAP will enforce the terms, so you should proactively live by them – it’s far cheaper to stay compliant than to fix violations later.

Transition to Cloud: What Happens to Existing HANA Licenses

Many SAP customers are transitioning to cloud environments or SAP’s RISE offering.

It’s important to plan what becomes of your existing HANA licenses during such moves to avoid wasting money or losing value:

RISE with SAP (Subscription Model):

If you move to RISE (SAP’s all-in-one cloud subscription for S/4HANA and more), you no longer need your on-premise HANA licenses for that S/4HANA system.

In RISE, SAP provides the HANA database as part of the service. Effectively, you’re paying a subscription fee that includes the database usage (with restrictions similar to a runtime license, since you can’t access the raw database freely).

This means any perpetual HANA licenses you previously bought for that system could become shelfware (unused assets) once you go live on RISE.

You might still be paying annual maintenance on them unless you do something about it. To avoid waste, you have a couple of options:

• Negotiate a Trade-In: When discussing your RISE contract, negotiate credit for existing licenses. SAP has been known to offer incentives to customers who move to the cloud. For example, you could potentially get a reduction in RISE subscription cost or cloud credits by “retiring” your on-prem licenses. Each case is unique, but don’t be shy about bringing up the investment you’ve already made in HANA.
• End Maintenance (If Feasible): If you’re sure you won’t need those licenses again, you could let their maintenance lapse or terminate those licenses. However, be cautious: if there’s any chance you might exit the RISE model in the future and run S/4HANA on your own again, you’d have to buy new licenses at that time (since lapsed licenses can’t be used). Some customers maintain a minimal set of licenses as an “insurance policy” for a while, which is a cost-benefit risk decision.

BYOL to Hyperscaler Cloud: If, instead of RISE, you choose to host SAP systems on an Infrastructure-as-a-Service cloud (AWS, Azure, etc.) under your own management, you should reuse your existing HANA licenses in that environment (BYOL), if possible.

The license is not tied to physical hardware – as long as the cloud VM is certified for HANA, you can install your licensed HANA there. This way, moving to the cloud doesn’t mean abandoning your license investment.

Ensure your contract permits usage in third-party data centers (it generally does, but double-check any location or platform-specific clauses). Using BYOL on the cloud saves you from paying the cloud provider for an included license. Essentially, treat the cloud server as if it were just another data center – your SAP HANA licensing remains the same.

SAP HANA Cloud Service (BTP) Considerations: If you plan to move to SAP’s own HANA Cloud service (maybe for new custom developments or as part of a RISE side-by-side extension), note that your on-prem HANA licenses don’t carry over.

SAP HANA Cloud is a separate product with its own subscription. You might find yourself in a situation where you have existing on-prem HANA licenses that are idle while you pay anew for HANA Cloud service.

To mitigate this, during your cloud transition negotiations, ask SAP about conversion rights or special programs that may be available to you.

Sometimes SAP can convert the value of unused on-prem licenses into cloud credits or give discounts on BTP services if you’re not using part of your on-prem portfolio. These conversations should happen before you sign the cloud deal.

Retaining License Rights:

Another aspect to negotiate during cloud transitions is what happens if you later decide to insource or move off SAP’s cloud. For example, if you go to S/4HANA Cloud (SAP’s SaaS version) or RISE for five years, and later decide to bring the system back on-prem or to a private cloud, you will need HANA licenses at that point.

It’s wise to have a clause that lets you resurrect your old licenses or obtain new ones at a reasonable cost.

Some companies negotiate “conversion credits” – the money spent on cloud subscriptions can be partially credited towards perpetual licenses later if needed. This is not standard, but in a large deal, you may have room to discuss it.

Bottom Line for Cloud: Moving to cloud doesn’t eliminate the need to think about HANA licensing – it changes the form of it. Always consider the fate of any existing licenses (to get value from them or avoid double spending) and plan for the long term (should you need to revert to on-prem or hybrid). With careful planning, you can transition to cloud models like RISE or BYOL without wasting the significant investments you’ve made in HANA database licenses over the years.

FAQ

Q: Do I need a HANA license for each SAP system we run?
A: Generally, yes. HANA licensing is typically tied to each SAP product environment. If you have multiple SAP systems (say one for ERP and another for BW), each will require its own HANA license entitlements. For example, you would need a HANA runtime license for your S/4HANA system and a separate runtime license for your BW/4HANA system if both are running on HANA (and on separate instances). You cannot buy one runtime license and use it for two different SAP products at the same time. (The runtime license is legally bound to a specific application’s use.) If you try to run two SAP applications on a single HANA database instance to save infrastructure, SAP may require a full-use license to cover that combined use case. The only scenario where a single license can cover multiple systems is with a full-use license, provided you consolidate those systems on a single HANA environment and allocate sufficient memory for all of them. Even then, SAP will want to ensure you have the appropriate usage rights for each application. Also, note that non-production (dev/test) systems are usually covered under your production license – you don’t pay separately for a dev HANA as long as it’s for supporting the licensed app and is within policy (SAP typically allows a certain number of non-prod installations for each license). Always check your specific contract, but the safe assumption is that each production SAP environment requires its own licensed HANA database, either via runtime or full-use.

Q: What happens if my HANA memory usage grows beyond what I licensed?
A: If you are on a full-use HANA license and you exceed the purchased memory capacity, you are running out of compliance. For instance, if you licensed 256 GB but the database is now using 300 GB, you need to address this promptly. The proper step is to purchase additional HANA license capacity (e.g., another 64 GB block) to cover the overage and avoid compliance issues. SAP will likely date the maintenance of that extra block back to when you started using it, if discovered in an audit. It’s far better to monitor and proactively license up before an audit forces the issue (which often comes with back-charges). On a runtime license, the contract doesn’t usually stipulate a hard memory limit, but practical limits exist. If your SAP application’s HANA database grows enormously (beyond what would be expected for the size of your SAP license), SAP might question whether the runtime license is still appropriate. Usually, as long as the usage is genuinely for the SAP app, you’re okay – you wouldn’t be asked to pay per GB under runtime. But extremely large growth might trigger SAP to reevaluate your overall licensing (in edge cases). In any event, it’s crucial to keep an eye on HANA memory consumption. If you see your usage creeping up to your licensed amount (in full-use), budget for an expansion. If you’re runtime and your database is ballooning, double-check that it’s all SAP data and not something that accidentally slipped in under the radar.

Q: Is HANA mandatory for all SAP products now?
A: Not for all SAP products, but for the major ones, yes. SAP’s strategy has been to make HANA the required database for its next-generation software. The prime example is SAP S/4HANA, which only runs on HANA – unlike its predecessor SAP ECC, you cannot run S/4 on Oracle or any other database. Similarly, SAP BW/4HANA (the newer data warehouse solution) requires HANA as its underlying platform. Many newer SAP offerings (especially anything with “HANA” in the name) are built exclusively for HANA. That said, some SAP products still run on other databases or give a choice. For example, SAP Business One (for small businesses) can use SQL Server, and older SAP Business Suite systems (if still in use) can be on DB2, Oracle, etc. But if your organization is moving forward with SAP’s modern ERP and analytics solutions, you will be investing in HANA. Essentially, HANA is mandatory for the current generation of SAP’s core products (S/4HANA, C/4 systems, BW/4, etc.), but not necessarily for every single peripheral or legacy product. Always check the system requirements of a given SAP product – if it’s part of the “HANA era” solutions, assume HANA is needed (and thus you’ll need to consider HANA licensing in your project’s cost).

Q: Can runtime licenses be upgraded to full-use later if our needs change?
A: Yes, absolutely – and this is a common path. Many companies start with a runtime license to minimize costs and later find a need for broader HANA usage. Upgrading isn’t an automatic flip of a switch; it typically means purchasing a new full-use license and getting credit for what you already paid. In practice, SAP will often let you convert by crediting the original runtime license fees towards the full-use license price (you pay the delta). For example, suppose you paid $200k for a runtime license initially, and now a full-use license for the same scenario would cost $600k. In that case, you might pay roughly the $400k difference (the specifics depend on negotiation and SAP’s policies at the time of conversion). Your SAP account rep will treat it as a license expansion sale. One thing to note: it’s better to anticipate this need early and negotiate as part of your original deal if possible. If you wait until later, you might have less leverage (SAP knows you’re effectively “stuck” and truly need it). But SAP will gladly sell you the upgrade regardless. The key takeaway is that starting with runtime does not lock you out of full use forever – you can make the switch when justifiable. Just ensure you’re compliant in the interim (don’t start using HANA beyond runtime rights until you’ve officially converted the license). Also, remember to adjust your support costs – full-use license maintenance will be higher going forward once you upgrade.

Read about our SAP Services.

Do you want to know more about our SAP Services?

Please enable JavaScript in your browser to complete this form.

Name *

First

Last

Email *

Company

Message *

Submit