SAP finally bows to user pressure on indirect access - sort of, but not quite

Profile picture for user gonzodaddy By Den Howlett May 6, 2019
Summary:
It's taken years of fighting but SAP has finally given into user group pressure on the thorny topic of indirect access. But it's not pleasing everyone.

Bill McDermott - CEO SAP

In what is an eye-catching press release, ASUG takes plaudits for an important shift in position by SAP on what has seemed to be an intractable issue - Indirect Access. 

We have covered this story many times and over the years held numerous meetings with user groups and SAP executives on this topic. Check the following stories:

The problem with the last big iteration on this topic was a lack of certainty. SAP made plenty of soothing noises around how license auditing has been separated from license sales but there were persistent rumors that those efforts were not always followed in the field. Also, customers were confused around the whole document count issue and there were many questions around EDI. So what's new?

What's new?

From ASUG:

There are now two ways to determine this, known in SAP language as measurability. 

The first measurability option is an estimation tool delivered through SAP Notes. Once applied, these notes will provide reports that estimate the volume of documents you’re creating. Keep in mind that these are estimates and may require some effort to fine-tune. As part of the Digital Access Adoption Program, SAP will provide resources from its Global License Audit and Compliance (GLAC) team to help you adjust and validate these estimates.

The second measurability option requires you to implement service packs to install the SAP Passport technical components. Once installed on the appropriate systems, the SAP Passport technology will begin tracking the actual number of documents you’re creating through indirect access. Be aware that getting an accurate count will take some time though, as the SAP Passport technology will only count documents that you generate after the point of installation.

How is this going to work out going forward? SAP is giving customers time to understand where they are but as ASUG correctly says, you need to understand your SAP contract(s) in order to assess the best course of action. It isn't easy but you have at least until your 2020 budget to run the discovery and assessment phases. 

For its part, SAP says:

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. 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 penalized for violating license rules in the past.

That's a big win for customers but don't think for one minute that lets anyone off the proverbial hook. It doesn't. It does, however, remove the fear that many customers rightfully felt when considering their licensing position and takes away the bitter pill of handing over what many see as a tax for using non-SAP systems.  

Aaaah but...

Not everyone is drinking the Kool-Aid. Philip Adams, director of the SAP UK & Ireland User Group said in a statement to us:

When SAP announced its new digital access licensing model last April, we –  alongside other user groups – globally asked SAP to publicly reiterate the promise it made to SUGEN in November 2017 when it said customers would be able to adopt the new digital access licensing model without incurring further costs if the business value/scope of their usage of SAP stays the same.

 

Over the last year we’ve continued to ask SAP for these reassurances and highlighted members’ concerns about the financial impact of the new model. As part of SUGEN, alongside ASUG and DSAG we have continued to hold discussions and workshops with SAP providing feedback on the concerns of customers in relation to the concept of indirect licensing and associated costs. Key areas of focus have been predictability, transparency, consistency, and fairness.

 

During this time there have been delays in SAP rolling out measurement and auditing tools that enable customers to analyze the financial impact of the new licensing model. As such, our members have continued to be concerned about their license positions.

 

With 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 license scenario’s – 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.

My take

Josh Greenbaum did some work with SAP on this topic earlier in the year. His view was that:

This effort has evolved over time to become the foundation of the only customer engagement program in the industry that is working to provide the flexibility in licensing terms and conditions that can actively support the digital transformation efforts of net new cloud customers as well as legacy on-premise and hybrid customers.

I'm inclined to agree and especially with his ending assessment that: 

This pioneering program offers SAP’s customers an opportunity to press reset on an issue that has troubled their strategic relationship with SAP at a critical time in both parties’ history. And even if customers in the end chose not to avail themselves of DAAP and stay with their existing licensing terms and conditions, the precedent set by SAP is one that will play an important role in revitalizing these all- important relationships.

Announcing this change on the eve of SAPPHIRE is one of the smartest things SAP has done in a very long time. It just needs Bill McDermott, CEO SAP to ram the message home during tomorrow's keynote, addressing lingering concerns. Do that and customers who have come to SAPPHIRE Now with this topic on their mind can now focus on other, perhaps more purposeful things. 

For a full rundown on what SAP is saying, check out this presentation (PDF). Pay particular attention to slide 8. 

Updated for SAP UK & Ireland User Group response