SAP SE’s Chief Executive Officer Christian Klein is setting up a new unit with hundreds of people to push the adoption of its artificial intelligence features and plans to overhaul how it charges clients as the technology threatens its legacy subscription model.

As more customers adopt SAP’s new tools in the coming years, the company will charge customers based on AI consumption, moving away from regular software subscriptions, Klein said in an interview in Berlin last week. The company will also create “forward deployed engineering” teams starting in July that will work with customers to develop its AI applications on top of SAP’s technology, he said.

Klein, 45, characterised the pivot to AI as a reinvention that will change how SAP allocates and rewards employees, how it interacts with customers and the way it takes in revenue. He’s under pressure to prevent clients from switching to alternative tools from generative AI companies, like Anthropic PBC and OpenAI, which have shaken investors’ confidence in traditional enterprise software businesses.

“It would be foolish to still charge subscription base, because AI is so powerful that it will automate a lot of tasks,” Klein said. Companies deploying AI agents that complete tasks for employees will need fewer users. “This is a big change in the way you price, the way you commercialise.”

SAP, Europe’s largest software company, has lost about a fifth of its market value since the beginning of the year. Share prices of software companies around the world have plunged in recent weeks on fears that AI tools will eventually upend their business model — particularly that of software-as-a-service companies that still tend to charge for access to their products by the user. The potential for AI, especially agentic AI, to accomplish more tasks in less time is forcing SaaS firms like SAP to rethink how their customers pay.

The company’s early attempts to introduce AI to its customer base, which it’s said includes more than 90% of Fortune 500 companies and government and military customers globally, haven’t always gone smoothly. Several SAP customers and resellers cast doubt on the AI tools’ performance and questioned their value. Klein earlier this month announced a shake-up of the company’s executive board, relinquishing his responsibilities for sales and increasing time spent on AI. The aim is to “focus more on the next transformation: making SAP an AI company,” he said this week.

Customers have also struggled with the way the company’s tools are priced. Subscription pricing is predictable, and some executives have had trouble forecasting how much they’ll spend on consumption-based models, Klein said. They’re also grappling with how to transform their operations around AI at scale, and SAP will deploy consultants to help with integrating it. “The excitement is obviously there” to adopt the new technology, he said.

Klein’s been travelling between the company’s offices in Palo Alto and Bangalore to oversee the development of the company’s AI products and how they can be tailored for customers. He believes SAP’s advantage over Claude and ChatGPT is access to customers’ data and the ability to work closely with them to tailor agents to their specific needs. In the next few years, SAP’s developers will have completely shifted away from features and into building agents, he said.

“Some people call it micromanagement, I call it going into the machine room and understanding a little bit better what kind of agents we develop,” he said. “At the end, it’s the CEO who’s accountable for making sure that the end-to-end transformation works.”

In the new forward-deployed-engineering unit, teams will be made up of consultants and developers with industry-specific expertise to help customers deploy tailored AI solutions quickly and gain value from the tools SAP sells, he said. Employees across different departments will be brought together to work with customers to design the tools they need. For example, when working with a client that’s trying to improve delivery times, “you need to talk to the truck drivers and really see what they are doing today — and then you design the solution,” Klein said.

AI is the Walldorf, Germany-based company’s second major technological pivot in less than a decade. The first was pushing customers away from one-time sales of software they’d run on machines in the office to cloud-based subscriptions. Ultimately, Klein forced the change through, telling enterprise clients that they had to shift their data into the cloud before SAP stopped supporting the older products. The change is expensive and complex for clients. Many are still grappling with it and have yet to start their cloud migrations.

Internally, some SAP executives have expressed concerns that the company won’t find a strategy to get clients to make this next leap and use the new AI products.

“You need to redefine, almost forget, what our transactional software did for 50 years,” Klein said. “Completely rethink, redefine, how does finance work? How does supply chain work?”

The UK Competition and Markets Authority (CMA) has launched an investigation into Adobe, concerning the US software giant’s early cancellation fees.

The investigation will centre on Adobe’s “annual contract, billed monthly” plan, where customers who cancel more than 14 days after signing up are required to pay 50% of the remaining yearly cost.

The regulator will assess whether these terms violate consumer protection laws and if customers are provided with clear and timely information about these fees before purchasing.

In its terms for Creative Cloud, Document Cloud and Acrobat, Adobe states: “You can cancel your subscription any time via your Adobe Account or by contacting Customer Support. If you cancel within 14 days of your initial order, you’ll be fully refunded. Should you cancel after 14 days, you’ll be charged a lump sum amount of 50% of your remaining contract obligation and your service will continue until the end of that month’s billing period.”

Emma Cochrane, the CMA’s executive director for consumer protection, commented on the importance of transparency and fairness in the digital design tools market, which is valued at nearly £60 billion in the UK.

“From students to content creators, millions of people rely on digital design tools – and they should feel confident that businesses selling these services play by the rules,” she said in a statement.

“Our investigation will consider whether Adobe customers are getting a fair deal and if they have enough information upfront about the cancellation fee.”

Since 2025, the CMA has had direct consumer enforcement powers, which allow it impose fines of up to 10% of a company’s global turnover in cases where consumer law has been broken.

The Adobe investigation is the ninth time these powers have been used, and this week the regulator imposed a £473,000 penalty on Euro Car Parks after the company failed to respond to an information notice, the first fine under the new arrangement.

The CMA’s announcement of its investigation into Adobe comes days after the company settled a $150 million lawsuit by the US Department of Justice, which accused the Adobe of unfair practices over its subscription and cancellation terms. After that case had been settled, Adobe stated that in recent years it has made its “sign-up and cancellation processes even more streamlined and transparent”.

Adobe has agreed to a $150m settlement with the US Department of Justice to resolve allegations that it did not clearly disclose termination fees and complicated the cancellation process for its subscription services.

The agreement requires Adobe to pay a $75m civil penalty and provide another $75m in free services to customers, pending court approval.

The Justice Department and Federal Trade Commission filed a complaint in June 2024, asserting that Adobe obscured information about early termination fees on its “annual paid monthly” subscription plan, reported Reuters.

These fees could reach hundreds of dollars and were often hidden in fine print or placed behind hyperlinks and text boxes.

Authorities also claimed that Adobe made it difficult for customers to cancel subscriptions, requiring multiple steps online or repeated interactions with customer service representatives when cancelling by phone.

The complaint stated that these practices violated the Restore Online Shoppers’ Confidence Act, which mandates that companies offering online subscriptions must clearly disclose key terms and provide straightforward cancellation options before charging customers.

US Department of Justice Civil Division head Assistant Attorney General Brett Shumate said: “American consumers deserve the right to make informed choices when deciding where to spend their hard-earned money. The Justice Department will strongly oppose any attempt to harm Americans with deceptive and unfair business practices.”

The settlement also addresses claims against two Adobe executives named in the government’s action.

As part of the proposed order, Adobe will need to inform customers about early termination fees and how they are calculated before enrolment.

For free trials longer than seven days, the company must notify users before switching them to a paid plan with a termination fee.

Adobe is also required to offer easier methods for cancelling subscriptions.

In response, Adobe stated on its website that it has recently taken steps to simplify its sign-up and cancellation processes.

The company denied any wrongdoing but welcomed an end to the proceedings. Subscriptions represented 97% of Adobe’s $6.4bn revenue for the quarter ending 27 February.