SAP's bitter pill against a home-grown disease
First steps to ensure license-compliant SAP usage
Speaker: Dr. Jan Hachenberger, Managing Director ConSalt GmbH, Munich
In April of this year SAP's new sales, audit and pricing model "ERP Pricing for the Digital Age" which is intended to regulate indirect use more transparently. The model was developed in close cooperation with user groups, partners and analysts. However, we question whether the new pricing model for indirect use is actually "fair and transparent" and "beneficial to customers", as SAP claims.
What's new? The model is a real novelty and is no longer based on the number of users for indirect access (digital access), but instead relies on a transactional metric. Indirect access occurs when devices, bots or automated systems access SAP or when people, devices or systems use SAP indirectly via an intermediary software from another provider - for example, a non-SAP front end, a customer solution developed in-house or an application from a third-party provider. Unlike in the past, Digital Access is now licensed on the basis of the transactions/documents processed by the system itself, so-called "documents". The creation of such a document counts; reading, updating or deleting are not charged. Where do problems lurk? In our view, SAP's new model is primarily based on a "transactional" license system in the medium term, which ultimately only works in one direction: Revenue growth for SAP. If the customer needs more SAP licenses, for example, due to an increase in orders, the additional costs for indirect use plus the associated maintenance fees can be overcome. It becomes critical when the number of orders managed with SAP decreases due to a lack of orders. SAP does not reimburse the license costs previously paid - no matter how badly the customer is doing.
What's next? SAP has been rolling out the new sales, audit and pricing model since April and has announced that it will provide additional training material in the coming months to make it easier to understand the new license terms. Basically, existing customers can decide whether they want to stay with the previous model or switch to the new one - depending on which suits their SAP and third-party applications better. However, customers who have not yet licensed or new customers will not be offered this choice.
In our experience, 30 to 40 percent of the SAP software used in both medium-sized companies and corporations today is inadequately or incorrectly licensed, which can have drastic financial consequences in the event of an audit. What remains is continuous optimization to avoid running the risk of buying too many or the wrong licenses and ultimately paying for these wrong decisions for years to come. Our recommendation is: Get Audit Ready! Experience has shown that an as-is inventory is not sufficient for long-term license-compliant use, as the IT structure in the company is constantly changing and evolving in line with the business processes. We are happy to help you decide on the most suitable model and ensure continuous monitoring and optimization with systematic license management.
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