SAP clarifies: It's OK to use data if you're already licensed
Software & Web Development

SAP clarifies: It's OK to use data if you're already licensed

SAP is changing the way it charges for licenses for indirect access to data held in its software.

The German ERP giant SAP has created an image problem for itself after taking legal action against two of its customers, demanding more license fees for data access.

In one case, in the U.K., Diageo was ordered to pay £55 million (US$70 million) for using data from SAP applications in other applications. The case is ongoing.

Another case, in the U.S., involves Anheuser-Busch, like Diageo in the alcohol business. This time SAP wants more than $600 million: That’s more than four times what the customer spent on software in total in 2016.

SAP wants more license fees because the customers are accessing data generated by SAP applications from other vendors' applications. It’s called indirect licensing.

Hala Zeine, Senior Vice President of Portfolio and Commercialization Strategy at SAP, told Computer Sweden that SAP is simplifying its licenses in time for its big conference, Sapphire Now, in Orlando, Florida.

"Everybody we talk to agrees that we should charge for the use of our software. But we need to clarify some use cases and make them more predictable, and because of that we made some changes," said Zeine.

Among the changes she described, two stand out.

If use of data from SAP applications involves collaboration outside the customer's own enterprise, the fees have up to now been calculated based upon the number of users. From now on the fees will be calculated based on the volume of data being handled, for example the number of orders.

SAP's customers will be able to convert their old licenses to the new model. That will mean that SAP will not be able to demand fees retroactively. Because of that the customers will avoid demands like those being made of Anheuser-Busch and Diageo.

The changes being made don’t specifically describe some principal conditions. For example, if a customer already has licenses to use an application from SAP that generates certain data, can the customer be subject to extra fees if that data is used with other applications?

Zeine's answer to that is, no extra fees.

Note that this use case doesn’t cover use of the data by users outside of the customer's company that don’t have licenses. This is one example of the use of the new price model based on data volume. But the conclusion from Zeine's answer is clear: Once licensed, always licensed.

And if data generated by an SAP application resides in a database with a customer, and another application uses that data, without running any software from SAP, does the customer have to pay extra fees? "It's ultimately the customer's data," said Zeine.

The interpretation of that answer is that customers don’t have to pay extra license fees to use non-SAP applications to manage data generated by SAP applications.

In practice, the reasonable way to use data that is generated with SAP applications is to use APIs belonging to those applications. That means that SAP's applications are being used, and the customer must obey the license rules. The same goes for applications from other suppliers.

In many cases, it's debatable if it's even possible to use data in a database belonging to an application, without using the application’s APIs. It can at least be extremely complex for customers to build solutions on their own.

In Zeine's view, "It's software that provides value to data." The question is, how much value?

Avoiding image problems isn’t the only reason for SAP to simplify its licenses right now, of course. SAP will almost certainly more often face competitors providing simpler, and more permissive, licenses in the coming years. If so, customers having to pay excessive fees for using data they already own will probably consider other applications than SAP's.

IDG Insider

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