SAP is implementing a broad change to its approach for building and monetizing artificial intelligence products, with Chief Executive Christian Klein initiating a new engineering structure and moving clients toward usage-driven pricing as AI threatens the companys traditional subscription model.
The company will stand up so-called "forward-deployed engineering" teams starting in July, Klein said, combining consultants and developers to co-create tailor-made AI applications alongside customers. He framed the move as a response to the unique nature of AI, arguing that it "would be foolish to still charge subscription base, because AI is so powerful that it will automate a lot of tasks," and that pricing should mirror the degree to which customers actually use AI capabilities.
These strategic adjustments follow early, mixed reactions to SAPs AI tools and intensifying competition from generative AI vendors including Anthropic and OpenAI. Klein has also reallocated his responsibilities internally, relinquishing sales duties to concentrate more directly on product development efforts across engineering teams in Palo Alto and Bangalore.
Market and analyst perspective
Bank of America analyst Frederic Boulan, in a note issued ahead of SAPs first-quarter results, described the company as retaining a "defensive business profile" and projected revenue growth of 11.5 percent, citing momentum in the cloud business as a primary driver. Boulan maintained a Buy rating, contending that risks from AI disruption are "overstated" and noting SAPs advantage in deeply embedded, mission-critical systems.
He also pointed to SAPs AI roadmap, which features plans to scale Joule into a suite-wide copilot and agent platform, as positioning the company to capture benefits from accelerating cloud migration and potential AI-driven upsell opportunities.
Broader context and tools
The shift toward consumption-based pricing reflects an effort to align billing mechanics with how AI automates workflows, rather than persisting with a subscription framework that may not reflect variable usage patterns. The new forward-deployed teams are intended to accelerate bespoke implementations and help clients extract value from SAPs AI offerings more directly.
At the same time, SAP faces external pressures. Competition from specialist generative AI firms and mixed early customer feedback create uncertainty around adoption curves and product-market fit. Geopolitical uncertainty is also cited as a factor that can affect bookings.
Platform tools and stock research
Separate from SAPs corporate announcements, ProPicks AI is referenced as an analytics tool that evaluates companies using extensive financial metrics and AI-driven selection criteria. The product description notes that the system has highlighted past winners such as Super Micro Computer (+185%) and AppLovin (+157%), while positioning itself to identify stocks with favorable risk-reward profiles.
The immediate practical impacts of SAPs strategic adjustments will depend on execution of the new engineering teams, customer acceptance of usage-based billing, and how well SAPs Joule and related offerings perform against competing generative AI platforms.