SAP is undertaking a sweeping overhaul of how it builds and sells artificial intelligence products, with Chief Executive Christian Klein launching a new engineering unit and shifting customers to consumption-based pricing as AI threatens its traditional subscription model.
The changes, detailed in an interview cited in a Bloomberg article, come as fears of generative AI disruption have weighed on SAP’s market value this year.
Klein reportedly said SAP will create “forward-deployed engineering” teams from July, bringing together consultants and developers to build tailored AI applications directly with clients.
He argued it “would be foolish to still charge subscription base, because AI is so powerful that it will automate a lot of tasks,” adding that pricing must reflect how much AI customers actually use.
The shift follows mixed early feedback on SAP’s AI tools and growing competition from generative AI providers such as Anthropic and OpenAI.
Klein has increased his personal focus on AI, recently giving up sales responsibilities to oversee product development across teams in Palo Alto and Bangalore.
Bank of America analyst Frederic Boulan said in a note on Tuesday, previewing the company’s Q1, that SAP retains a “defensive business profile” and expects revenue to grow 11.5 percent, driven by cloud momentum.
Despite geopolitical uncertainty affecting bookings, Boulan reiterated a Buy rating, arguing that AI disruption risks are “overstated” and highlighting SAP’s advantage in deeply embedded, mission-critical systems.
source https://www.investing.com/news/stock-market-news/sap-to-revamp-ai-strategy-with-new-engineering-teams-and-usagebased-pricing-4568895
