SAP’s new licensing policy remains vague

sap diageo licensing

Does SAP’s new licensing policy solve the issues related to indirect usage?

Although discussions about indirect use of software have been around for decades, the recent lawsuit between SAP and Diageo really put this topic on the map. Under pressure from subsequent negative reactions, SAP has recently presented a new licensing policy. What does this mean for SAP users?

Problems with indirect usage arise if end users of a “third-party” system have access to information from a system such as SAP, without licenses.

With most software vendors – not only SAP, but also Oracle, for instance – it is unclear what is or isn’t allowed when it comes to indirect use. Especially on enterprise level, this results in major financial risks, as it turned out recently. After the British beverage supplier Diageo integrated its Salesforce software with its SAP systems, SAP successfully litigated Diego. Earlier this year, the British multinational was enforced to pay 60 million euros of overdue licenses and support costs.

More transparency

These types of lawsuits usually do not get public, as they generally result in new commercial agreements. Nevertheless, there recently was another news story: SAP claims more than 500 million euros from InBev, again because of a compliance issue related to indirect use. Both cases, of course, led to panic among other customers, but also to a great deal of negative reactions, including from the association of Dutch SAP users. This seems to be effective, because not long after, SAP announced to adapt its pricing model to modern times. The promise: more transparency and predictability. The big question: is that possible?

Still vague

So far, it seems that SAP solved the problem only partially. Because still no prices are mentioned for indirect usage, and more so because even though the pricing policy is somewhat clearer, some parts remain pretty vague. SAP states to include an “Indirect Static Read” in its associated software licenses. The explanation is that your data remains yours, and that you don’t have to pay extra if it is a matter of read-only and not processing or computing in the SAP system. But what does this mean exactly? If I get information from an SAP system, print and share it with my colleagues, are my colleagues then considered readers or users? And what about if you access an SAP system from Salesforce? Do you only have to pay if you put back the data afterwards?

Start the dialogue

It is positive that SAP takes a step forward and aspires more transparency and clarity, but there is still enough ambiguity about it. Therefore, I would urge SAP users not to wait for SAP, but to take control themselves. Compliance issues regarding indirect usage are best avoided by making clear contractual agreements upfront with SAP. Well prepared, of course, so you do not risk to put pressure on the relationship.

Do not wait until SAP rolls out its new pricing model

With a clear business strategy, you can properly estimate the added value of SAP and the extent of it. For example, indicate that you are willing to pay for the first user to retrieve data from an SAP system, but not for all users who use the same data in Salesforce (or for the first reuse of data, but not all the use of data thereafter). Anyone who prevents everything in advance does not have to ask later what exactly is allowed. So, do not wait until SAP is rolling out its new pricing model (or shows up on your doorstep with a claim), rather anticipate.

This article is also published in Dutch on AG Connect.

This article was published on 04-07-2017