Digital ProcurementSAP’s new indirect access pricing model: What it means for customers

SAP’s new indirect access pricing model: What it means for customers

Rich Gibbons, Licensing Analyst at the ITAM Review, reports on what the new SAP license means for customers and whether it will draw a line under the indirect access confusion

Last week, SAP launched a new software license in an attempt to clarify its position on “indirect access” of its software. Rich Gibbons, Licensing Analyst at the ITAM Review, the online community for worldwide ITAM professionals, reports on what the new license means for SAP customers, and whether it will draw a line under the indirect access confusion.

Over the last year, one story that has continually hit the IT news headlines has been SAP’s lawsuit against drinks manufacturer Diageo, which centred around indirect access – particularly accessing SAP via multiple levels of third party software such as SalesForce.

The confusion around the licensing rules, the lack of clarity from SAP and their willingness to aggressively pursue large damages has left many SAP customers angry and questioning SAP’s practices. In what appears to be an attempt to allay fears and stop customers looking around at solutions from other vendors, SAP has unveiled a series of licensing changes (10 April 2018).


What’s changed?

SAP will differentiate between two types of users:

  1. Direct (Human) Access

SAP define this as occurring: “when people log on to use the SAP Digital Core by way of an interface delivered with or as a part of the SAP software”.

This will continue to be charged on a “per-user” basis.

  1. Indirect (Digital) Access

This new license offering is aimed at access by third parties, IoT (Internet of Things) devices, bots etc. and will be licensed based on transactions/documents processed by the SAP system.

SAP define this as occurring: “when devices, bots, automated systems, etc. directly access the Digital Core. It also occurs when humans, or any device or systems indirectly use the Digital Core via a non-SAP intermediary software, such as a non-SAP front-end, a custom-solution, or a third-party application”

This new model will be available for the traditional SAP ERP application as well as S/4HANA and S/4HANA Cloud.

This appears to directly address the issue at the centre of the Diageo case – when “humans…indirectly use [SAP ERP] via a…third-party solution”.


No back maintenance?

SAP has stated: “SAP assures customers who proactively engage with us in good faith that we will not pursue back maintenance for under-licensing of SAP Software associated with indirect access”

But SUGEN (SAP User Group Executive Network) have also said: “Customers need reassurance that if they believed they were correctly licensed, due to factors such as discussions or communication with SAP or ambiguous contract clauses, they will not face new license costs”

So not just protection from back maintenance but a guarantee that, through now licensing their scenario correctly, a customer won’t pay any more than under the old model – which was licensed incorrectly.

Will SAP do something like this – both to win back customer favour and to drive adoption of their new licensing metric? The new model will surely lead to significant revenue for SAP as IoT and bots continue their seemingly inexorable rise. Which will win out – the short-term gain of suing more customers for indirect access breaches or the long-term plan of moving customers to the new model, with a view to increased license expenditure over the next 5, 10, 15+ years?


What’s next?

It’s an interesting move from SAP – one where the proof of the pudding will very much be in the eating. Will SAP easily forgo all back maintenance? Will customers receive 100% credits if they make the switch? Will this create new areas of uncertainty and simply move the problem around within an organisation?

Certainly, it is another element that the next-generation ITAM department must consider. ITAM departments will need to understand their organisation’s plans around digital access, now and in the future, to best determine which of the contract options to opt for.

Going forward, understanding how third-party software, bots and Internet of Things (IoT) devices interact with the SAP system is going to be crucial to ensuring compliance, and this will require good communication between ITAM and other areas of the business such as Enterprise Architects and the ERP teams. They will need to understand the impact their designs could have on the organisation’s licensing position – having one bot that creates a certain document type from an external action could add a significant amount to the SAP bill. Bots and IoT are the shiny new things for many people and I’m sure they’ll start to appear in places where they’re not strictly necessary…making people aware of the financial implications should help to temper this.


Over-licensing risk?

It may be that over-licensing will become the new danger with SAP indirect access. Without a deep understanding of which documents are being created in which scenarios, it may become easy to overpay for Indirect Access under this new model.

One potential issue will be correctly counting the documents.

SAP is clear that it’s only the initial document creation that incurs a charge, so a Time Sheet record being created will be a charge – but if it then creates a Financial Document in the SAP system too, that secondary document will not have a cost associated.

How easy will it be for SAP customers to track the origin of all the documents in their system? To say which were triggered by internal or external systems? To say which are original documents and which are derivatives of other documents?

Getting these wrong and counting too many documents will lead to overspend…but perhaps organisations will prefer to err on the side of caution rather than risk a lawsuit from SAP?

Related Articles

A bold approach to procurement will pay off 

Digital Procurement A bold approach to procurement will pay off 

2m Austin Clark
PAC slams government procurement processes

Digital Procurement PAC slams government procurement processes

7m Austin Clark
G-Cloud 10 opens for business

Digital Procurement G-Cloud 10 opens for business

8m Austin Clark
Redcar and Cleveland signs deal to transform revenues and benefits services

Digital Customer Service Redcar and Cleveland signs deal to transform revenues and benefits services

9m Austin Clark
New framework agreement for Yorkshire and Humber

Digital Procurement New framework agreement for Yorkshire and Humber

10m Austin Clark
Continuing austerity ahead as Government grapples with £300bn public spending gap

Data Insight Continuing austerity ahead as Government grapples with £300bn public spending gap

10m Austin Clark
Capita announces £513m annual loss

Digital Procurement Capita announces £513m annual loss

10m Austin Clark
Q&A: Managing shadow IT

Data Insight Q&A: Managing shadow IT

10m Austin Clark