UK&I User Group responds to SAP's latest indirect access licensing guidance Credit: Peter SayerIDGIDG
Business Management

UK&I User Group responds to SAP's latest indirect access licensing guidance

Since the indirect access issue exploded in 2017, when UK drinks giant Diageo was ordered to pay £54,503,578 in licensing fees after its sales staff were running Salesforce applications on top of SAP data, the German software vendor has been scrambling to ease customer concerns around the issue, eventually leading to an entirely new ERP pricing model revealed in April 2018.

"This new model is designed to address every conceivable indirect access scenario for the digital age. It was designed to provide customers the business certainty and predictability on their license commitment," a blog post from Christian Klein and Hala Zeine at the time read.

This new pricing model hinges on nine document types that "represent system records of the most valued business outcomes from the ERP system", such as an order-to-cash process, which creates a sales document, or a plan-to-produce process generating a manufacturing document.

Read next: Demystifying the new SAP ERP pricing model

Customers and user groups responded to the new model in a generally positive fashion, but highlighted concerns around transparency and predictability.

"We've been outlining your concerns to SAP for a number of years now. It responded last year by launching the digital access licencing model – we were broadly supportive as we could see the benefits for new customers. However, we also noted that it didn’t address the fears of many of our members," Philip Adams, director of the UK and Ireland SAP User Group summarised in a blog post this week.

Now, one year on, the vendor has announced the Digital Access Adoption Program (DAAP) and the Digital Access Conversion Program. This involves customers engaging with SAP's global license audit and compliance team to identify an estimate of the number of documents created by their current use of SAP applications.

There are also a couple of financial incentives included. One is to license 100 percent of their estimated documents and get a 90 percent discount on digital access, while another is to license for 115 percent of the estimate and "the license fee charged for this transaction is only for such licensed growth," the vendor outlined in a PowerPoint presentation.

This gives customers a route to the new Digital Access licensing model based on an assurance from the vendor that there will be no hidden costs around licensing fees.

"The days are over in which customers believed, fairly or not, that any discussion of indirect access, could lead to a confrontation with SAP and the assessment of financial penalties for inadequate licensing," Robin Manherz, senior vice president and head of global portfolio planning and commercialisation at SAP wrote in a blog post this week.

"In fact, SAP expects that for many customers a conversion to the new licensing program will largely come at little to no net-new costs and will ensure that no customer will be penalised for violating license rules in the past," she added.

These announcements came the same week at SAP Sapphire, the vendor's big annual conference, where it would much rather talk about its flashy new acquisition than the gritty issue of indirect licensing. Read next: SAP commits to Experience Management following Qualtrics acquisition

User group response

The user group response to the Digital Access Adoption Program was to demand that SAP assure customers that if they adopt the new digital access licensing model they will not incur further costs if the scope of their usage of SAP stays the same.

Philip Adams, at the UK and Ireland SAP User Group further responded to the blog by saying: "The announcement of the digital access adoption programme, SAP is giving customers a way to measure the financial impact of adopting the digital access licensing model and seems to be providing a level of financial predictability.

"While this is not the solution our members want, we are glad we've been able to influence SAP and improve the situation for customers who until now have had no real idea of what the cost implications of the digital access model might be. Many elements of the programme still need to be clarified, not least the need for the financial options to be described in a much clearer way, with realistic and concrete examples of how each would play out in the real world.

"We also need clarity on whether we really are talking about two licence scenarios – the legacy and the new document-based model, as from discussions and feedback it seems there will be scenarios where customers will have a mix of document and user-based licensing. For customers this creates concerns around double charging.

"Ultimately we’ll continue to push SAP for further clarity, transparency and fairness to longstanding customers who have always believed they have been adequately licensed.”

Geoff Scott, CEO of the Americas' SAP Users' Group (ASUG) was quoted in the blog post saying: "SAP customers now have a clearer pathway, with well-defined adoption options, so that they can reduce the uncertainty with their current licensing situations. I look forward to hearing customers' feedback on the new program and continuing the collaboration with DSAG and SAP to ensure all customers can focus their time and energy on transformational projects."


« Ultrasound key to autonomous robotic surgery, researchers say


Red Hat CTO Chris Wright: we're creating an autonomic platform »
IDG News Service

The IDG News Service is the world's leading daily source of global IT news, commentary and editorial resources. The News Service distributes content to IDG's more than 300 IT publications in more than 60 countries.

  • Mail