Many Beltug members are customers of SAP, and have shared with us their questions and challenges regarding SAP's software licensing policies, including (among others): how the licence models will evolve (especially in terms of the growth of cloud services) and how to cope with indirect access.
We organised a 2-part, users-only workshop with our members to look into the issues. In the first part, we met without SAP to share knowledge about SAP licensing. Together, we had a ‘first-go’ at best practices and mapped the existing concerns to prepare for the second part of the session. In this second part, three representatives of SAP joined us to discuss our questions. Presentations are available to Beltug members (after log-in):
SAP also provided the following documents (additional links to information from SAP are provided below the event summary):
The evolution of SAP licensing models over time
Even during the introduction, when we went around the table to discuss participants’ expectations, it was very clear that many companies struggle with SAP licences, as multiple people shared their concerns about SAP licensing, indirect usage, etc.
Bart Verplancke, Senior Manager – SAP Subject Matter Expert at Deloitte, got the session started with an overview of typical pitfalls related to SAP licensing. He also shared the specifics of the recent Digital Access Document-based licensing model.
Pointing out that SAP usually contacts its customers every year to run measurements across their SAP estate, Bart provided an overview of these measurements and tools for managing a company's licences (slide 4).
Some pitfalls he highlighted included:
This brought Bart to the focus areas where a company can (easily) optimise its compliance (slide 6).
Bart moved on to the challenge of indirect usage, which occurs when a third-party system generates data that is used in SAP systems (or vice-versa). Both user and data interaction can lead to indirect usage. Bart warned that there is no clearly aligned definition between SAP and its customers for the term 'indirect usage', which results in a highly non-transparent situation. However, there are certain indicators for indirect usage that can be taken into account for the detection of licensing needs (non-exhaustively) (slide 9).
Other sources of indirect usage may occur when SAP data is used or leveraged by another application/integration/portal, e.g. salesforce usage, especially when SAP deems that the company doesn’t have sufficient SAP licensing to cover this.
Bart shared a decision matrix to determine suitable licensing scenarios in the SAP environment (Slide 11):
(Slide 13 indicated scenarios where 'indirect static read' is free of charge.)
In April 2018, SAP re-defined its model on indirect access:
The ERP pricing model has been changed accordingly: 'indirect access' has been re-designated 'digital access'. This digital access licensing is document-based, and various document types are counted to determine the licence requirement. It is important to note that for some documents, not only the document itself, but also the individual line items, must be counted:
Bart wrapped up with the three options for existing ERP customers (slide 19):
The challenges of SAP contracts and indirect use
Sarah De Wulf, Associate at Stibbe, then gave us a case study showing what happens when a client receives the email announcing an audit. For the company, the questions arise: what is non-compliance? Are we compliant?
The customer first faces the preliminary challenges:
The customer then looks for solutions in its contracts, where it comes face-to-face with a lack of clarity:
There are a few key arguments to remember during an audit: demand transparency (SAP always has the burden of proof) and never allow yourself to be unnecessarily pressurised. Last, but not least, is the ‘common practice’ between parties, for instance based on prior results or communications between SAP and the company.
One important question for SAP in this area is: how are updated SAP documents (terms and conditions, price lists, etc.) communicated to clients? Are the significant differences highlighted and explained, for instance?
Finally, Sarah went over a few points of attention during and after a settlement:
Beltug challenges SAP, and SAP responds
Based on the new information and questions the audience contributed in the first part of the session, we prepared the common questions and discussion topics for SAP.
After the break, Stef De Mulder (COO), Jan Stalmans (Global Licence Management) and Jan Augustijnen (Sales Director) from SAP joined the table for the second part of the session: the Challenge.
Expectations from SAP
Stef explained that, to SAP, partnering and having a customer-relationship 'for life' are key. Regarding the complexity that companies have indicated to be a concern, he stated that SAP’s focus is now on simplicity, transparency and consistency.
He provided an example: the audit staff is now part of a global team with the task to support and advise clients at the moment of an audit. This means that the team no longer has any sales targets.
The room responded that they expect more proactivity from SAP: more support at the moment of the sale (rather than at the moment of an audit, when it is 'too late').
Migration to S/4HANA
SAP and the participants discussed the migration/transition from ERP to S/4HANA, as maintenance for ERP will end by 31/12/2025 (details can be found in SAP Note 1648480). SAP sees many customers still postponing the migration, which will create a problem in 2024 in terms of finding implementation resources at a reasonable price when everybody suddenly wants to migrate at the same time.
SAP has launched the “1000 jobs” program, with the help of Actiris, VDAB and Le Forem, to create 1000 additional SAP resources over three years.
The migration to S/4HANA topic triggered many questions: one specifically on HCM solution not being part of S/4HANA while it was in ERP, only offering customers the possibility to move to the Succesfactors cloud solution.
Indirect/digital access and the new pricing model
Stef also touched upon the crucial issue of indirect access. For SAP, there are 3 types of access:
To tackle the growth in digital access, SAP modernised its ERP pricing, adopting an 'outcome-based' model.
The participants at the table also asked for more proactivity in terms of the monitoring tools SAP provides to its customers: a tool should monitor, but could also give the customer an alert of some kind when usage increases severely out of scope, for example.
The audience also pleaded for SAP to proactively estimate a customer's usage as close to reality as possible; when the estimation (based on historical data) is wrong, SAP should take some of the responsibility. SAP disagrees with this approach, as the number of documents depends greatly on the business decisions taken by the customer, over which SAP has no influence.
Stef emphasised that the pricing model is new, and SAP is learning about the best use. Customers are invited to discuss their specific use cases with SAP to improve their situation. But the companies at the table insisted tooling is very important. The new model is already valid, but the tools are not ready. SAP provided more information about the tools added below.
The licensing models based on documents and line items raised a lot of questions, too. For example, when there is a mistake on an invoice, it can be processed a second time, a new PO number might need to be created, it may be automatically dispatched, etc. There can therefore be quite a lot of linked documents. But when these processes were set up in the companies, the licences were 'per user'.
It is very difficult to be sure that the company has the accurate and optimal licences. Participants also asked why the pricing for the documents is the same for different cases, while there may be a lot of items or only a few.
As documented in the SAP Software Use Rights, once digital access is licensed by the customer, the user and document licence models cannot be mixed for digital access: “All Digital Access of S/4 EM and ECC will be licensed based exclusively upon the number of Documents created annually.”
In response to participants’ request for help on the topic of the S/4HANA migrations, it was explained that SAP does not have a lot of resources in Belgium, and works via partners and resellers to create the necessary scale. The participants asked that SAP invest in knowledge and not just sales.
At the end of the event, both SAP representatives and customers agreed that, while such conversations aren’t easy, they appreciate the opportunity to discuss jointly. Beltug will now look into future actions.
Links provided by SAP:
SAP Digital Access Notes (first version of a tool to estimate the amount of created documents in your SAP digital core) (NB: these links lead to a page requiring a SAP login)
Prerequisites and restrictions of the report:
For each Document Type, the report determines the number of the current database entries. This number can only provide an indication of future database entries, when the customer-specific situation is taken into account. The report does not differentiate between documents that were created by SAP applications and documents that were created by non-SAP-applications. The number transferred for a document must be interpreted based on the current installation environment.
The note provides only basic functionalities and might require some manual prerequisites to generate a reasonable number.
SAP Agreements link
Announcement of Digital Access Adoption Program at Sapphire May 7-9:
This addresses some concerns on how to measure and how to enter the digital access licensing model in an interesting way.
Many, many, MANY questions and concerns on #SAPLicensing during our session today. Sarah De Wulf (@Stibbe) and Bart Verplancke (@DeloitteBelgium) provide a few answers. #SAP #SoftwareContract #SoftwareLicence pic.twitter.com/5qBFjM6PxC— Beltug (@Beltug) February 20, 2019
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