SAP License Management

The topic of licenses has always been a controversial one in the SAP community and is often interpreted very subjectively by SAP. With the increasing complexity of ERP systems, the challenge of interpreting the SAP PKL (Price and Conditions List) and the associated Excel price list has grown, especially since SAP has always kept its own price list a big secret. In the meantime, the data is freely accessible via the DSAG (German-speaking User Group), and it is not so much the prices that worry SAP customers, but rather understanding the PKL.

SAP has always used offers and prices as an element of political control. Many years ago, when pre-owned licenses entered the B2B arena and happy SAP customers found a source for pre-owned licenses, they could usually count on a quick counteroffer from SAP. At the time, SAP took many legal and organizational steps to prevent a thriving secondhand market. It was not uncommon to find SAP offers with discounts of 50 percent or more.

Why did SAP do this? SAP was able to keep unwanted license crusaders at bay and did not have to worry about a major drop in sales itself, because the more predictable annual maintenance fee of 17 to 22 percent for the licenses sold was always calculated from the list price—regardless of how much the license itself once cost.

This has become more complicated and challenging in recent years due to indirect use, the proliferation of license types, and cloud subscriptions. There have been numerous comments on e3mag.com about indirect use as well as discourse on who owns the data in SAP silos and how it can be used by SAP customers, all of which can be found in the web archive.

The topic of license types has also been well covered in e3mag.com. However, it is still a major challenge for SAP customers to find a consolidated path between the numerous engine prices, user and role types. Without the support of licensing experts, little progress can be made.

The current challenge is in the area of subscription-based cloud computing. Ultimately, this is similar to the annual maintenance fee, but with the major difference that if the cloud subscription is not paid, all the data is gone. SAP does not have a cloud exit strategy.

On-premises systems have the unique advantage that even if the maintenance fee is suspended, the data and the right to use said data remain. About ten years ago, Gartner analysts were already preaching that SAP customers must keep their own on-premises licenses. An ERP system without a perpetual license is a mortal sin.

You might be able to live without annual updates, but not without your own data. Licenses have become the wild card for SAP customers. They are the real challenge before any S/4 conversion. Errors in the cloud and in license management will not be tolerated.