SAP license know-how

Insiders have known it for a long time: The traditional licensing models of almost all ERP providers are only suitable for IoT, bots, cloud computing, etc. to a limited extent. Digital transformation requires adapted structures for the creation and management of software licenses.

The necessary business, organizational, technical and legal expertise will be imparted and discussed at the "License Know-How 2018" workshop on September 18 this year in Heidelberg (www.e-3.de/lkh).

SAP's existing customers will be offered knowledge and guidance from leading experts and SAP partners. Both in presentations and in several discussion panels, the licensing and SAP-specific requirements will be addressed in detail.

In addition to the questions about ERP/CRM infrastructure, SAP architecture, old and new license model for "indirect use" and compliance tasks, the practice of "indirect use" will also be discussed from a legal perspective: EU Software Directive 2009/24 states:

"The function of computer programs is to interface and operate with the other components of a computer system and the users.

To this end, a logical and, when appropriate, physical connection and interaction is necessary to ensure that software and users can function as intended. The parts of the program that are intended to provide such connection and interaction between the elements of software and hardware are commonly known as the 'interface'.

This functional connection and interaction is commonly known as interoperability; this interoperability can be defined as the ability to exchange information and to mutually use the information exchanged."

But it is hard to imagine digital transformation without interoperability. Christian Klein, Chief Operating Officer and Member of the Executive Board of SAP SE:

"In light of digital transformation, we understood the challenges our customers face when it comes to sublicensing and therefore made the necessary adjustments.

By introducing a new pricing and licensing model, we are providing our customers with greater transparency, predictability and consistency. I trust that these three aspects will encourage our customers to invest further in digital business models."

SAP's existing customers are concerned with metrics, indirect usage and license measurement. This also involves the question of whether the acquisition of NetWeaver Foundation for Third Party Applications (NWF TPA) is necessary for the connection of software functionality (coding) created either by the customer itself (in-house development) or by a third-party provider to the SAP software licensed by the customer.

DSAG initiated the initial process for the results now available at the 2017 annual congress in Bremen and was and is a discussion partner on the topic of indirect use. It has not yet been decided whether the agreement will deliver what DSAG and SAP hope for in practice.

Adaire Fox-Martin, member of the Executive Board of SAP SE, responsible for SAP's business in Central and Eastern Europe (MEE), Europe, the Middle East, and Africa (EMEA), and Greater China:

"SAP's business aims to build long-term, trusting customer relationships. We have intensively scrutinized all our methods and processes around the topic of Indirect Access, listening closely to our customers.

These new guidelines give our sales force all the tools they need to ensure that our customers get maximum value from their solutions. We have worked with all stakeholders to create a modern collaboration model that ensures unprecedented transparency and reliability for digital innovation with SAP."

The DSAG user association notes in a press release that the new pricing model still has to prove itself in reality. Nevertheless, it is convinced that the model is a good start in terms of licensing and indirect use, thus creating a solution that appeals to everyone.

Further steps and adjustments must follow. While fundamentally interesting for new customers, the new model must show in practice whether it can also be implemented in a way that makes economic sense for existing customers.

The new approach distinguishes between direct, human access and indirect, digital user access and is intended to create clear rules for licensing, use and compliance.

From DSAG's point of view, it would be important in this context for SAP to seek individual discussions with individual customers, if necessary, in order to find a viable and fair solution for indirect use in a timely manner, taking into account the old contracts and the history.

"These agreements must be legally binding, sustainable for both sides, economically viable and draw a line under this issue. The choice between 'everything stays as it is' and the new licensing model is not sufficient in every case."

adds Andreas Oczko.

According to SAP, the new licensing model is intended to provide existing customers with greater cost transparency for indirect, digital access to SAP applications. Until now, the license model for ERP/ECC was based on the number of users.

In the meantime, however, more and more digital accesses (bots, IoT sensors, etc.) to SAP systems are taking place. This is a challenge for customers, who therefore increasingly want an alternative licensing model.

With regard to the announced pricing model for the Internet of Things, DSAG believes that a solution that meets both current and future requirements is desirable.

"A first step has been taken to continue on the path to digital transformation. However, the goal must be to develop a true, breathing model based on a pay-per-use approach"

says Andreas Oczko. DSAG will continue to advocate for its members on this and other topics in the upcoming coordination talks with SAP.

SAP rolled out the new sales, audit and pricing model as of April 2018 and will provide additional training materials and tools in the coming months.

This should make it easier for customers to understand the new licensing terms and choose the model that suits them best. Conversion offers are available to help customers switch from the existing to the new pricing model.

SAP is also introducing new rules in organization and governance that provide for a strict separation between the sales organization and processes and the audit organization and its processes.

To this day, there are always differences between customers and SAP as to how older contracts are to be interpreted with regard to the new digital requirements. In some cases, this has a negative impact on parallel discussions on the acquisition of new software.

The organizational changes on the SAP side now allow these issues to be separated and enable independent discussions. This makes it easier for customers and employees from SAP sales to work together.

SAP plans to make measurement tools available so that customers are able to monitor their own user and license consumption themselves at any time. The practical application of a possible new LAW and other license measurement tools will also be discussed at the "License Know-How" event in Heidelberg on September 18.