Business meeting

UPDATE: SAP Indirect Access licensing model

The last time I wrote about SAP’s Indirect Access was nearly 6 months ago. Of course, a lot has happened since then.

The gentleman who introduced me to the flurry of news and activity around the Indirect Access event, a Sam Bayer from Corevist is still closely following developments around SAP’s modernised pricing, regularly updating the community about what he has heard from SAP users.

As for me, I had said it last November, and I will say it again now.

SAP should be paid for the role that their technology IP (intellectual property) plays, and customers should take the initiative to negotiate fairer pricing for themselves. In Malaysia at least, the new scheme; and partly Malaysia’s new MD Duncan Williamson initiative to get ahead of the issue; is inviting businesses to step forward and be upfront about possibly being under-licensed.

In Australia at least, I’ve heard that a SAP user group, is freely asking clarifying questions, under condition of anonymity.

But, there is something larger at play, as well. Last November, I saw SAP’s Indirect Access licensing as stifling innovation. There have been cases, according to Bayer, where pricings are set to be prohibitively high, when a customer uses non-SAP products.

However, this seems to be the work of rogue SAP sales folks, who take advantage of vague, convoluted licensing terms, to threaten customers with expensive licensing.

Forrester’s Duncan Jones said, “SAP hasn’t been able to manage and identify salespeople who are using SAP indirect access as an excuse to extract money from customers or push them toward S/4 HANA.”

Why is this important to innovation?

SAP’s ERP plays a role in about 76-percent of the world’s business transactions. Many companies have built software accessories around SAP’s ERP network, to enable their customers to access SAP’s ERP’s processes directly; for example order-to-cash and procure-to-pay scenarios. Certifications, as well as research and consulting companies, have all mushroomed globally, because of SAP’s technology and solutions.

Isn’t 40 years of enabling all this, and then turning around to say customers can’t use the fruits of all that development, akin to a Rude Finger Sign to everybody’s blood, sweat and tears?

Updates

I’ve mentioned that Sam Bayer still follows developments around Indirect Access. To date, Gartner has published a paper whereby SAP clarified Indirect Access licensing.  If you are a Gartner customer, you can access that paper here.

One of the core things that currently could use more clarity, is the use of the word, “use”. If a task or process requires SAP to get completed, might that be considered as use of SAP’s software/solution, and therefore subject to licensing fees?

Also, this is just one scenario.

There are likely many, many different ways an SAP system or a workload with SAP components, could be implemented in an environment. To get an idea of the magnitude, remember this statistic “76-percent” and the risk of incurring SAP’s indirect access still remains, for organisations.

In Bayer’s opinion, SAP has no great incentive to change anything quickly. “That’s the power of monopoly.”

That said, he challenges the community to share stories where indirect access fees have been negotiated to the satisfaction of BOTH parties.

 

 

 




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