Demystifying SAP’s Indirect Use Pricing Update – Questions to Ask SAP

During his opening keynote address at SAP SAPPHIRE, Bill McDermott, President and CEO of SAP, took the opportunity to address SAP’s pricing strategy related to indirect access. Given the forum and nature of the issue, it’s understandable that a detailed presentation on SAP pricing practices was not presented.

That said, customers are certainly looking to understand the impact of SAP’s commitment to simplify pricing and get additional insight on the matter.  As customers engage with SAP executives and their sales team in more detailed discussions during SAPPHIRE, we would encourage peeling back the layers on what they really mean.

Static Data Use

McDermott indicated use or access to static data would not be considered indirect access. UpperEdge advises SAP customers to seek further clarification with respect to SAP’s position on the methods customers can use to gain access to SAP data.  In addition, you should discuss SAP’s position with respect to the return of data to SAP via a 3rd party system.  More specifically:

  • Does querying SAP to extract data constitute use?
  • Do data updates to SAP via 3rd party systems constitute use?
  • If yes to either, what is the license requirement, user type, and cost?

For those SAP clients looking to understand the nature of this concession, I would offer the following perspective.  The cornerstone of SAP’s argument around Use is “invoking the processing capabilities of the SAP software.”  A flat file extraction of data certainly does not meet this requirement.  If SAP is requiring a license related to querying and returning manipulated data to SAP, the concession, in the end, will not be viewed as meaningful to SAP customers.

Order-to-Cash / Procure-to-Pay

SAP indicated indirect access related to order-to-cash and procure-to-pay functions would be price- based upon order volume moving forward. UpperEdge advises SAP customers to seek further clarification with respect to the following:

  • What is the specific pricing associated with these new metrics?
  • What are the specific use rights or limitations related to these license metrics?
  • In what scenario would an external or internal user be required to be a named user?

Again, for those customers that have not experienced an SAP audit of this nature, let’s put this concession into context.  Although this part of the announcement demonstrates progress by SAP, the reality of actual negotiations on this use scenario has driven SAP to an order-based license metric as the user-based metric is frankly unquantifiable in certain instances.  In the cases the user can be identified, the user requirements typically extend beyond the use right of the engine and require a named user license, anyway.

Although more detail is required, initial indications are SAP’s announcement was consistent with certain concessions SAP has been readily providing via indirect audit negotiations for several years.  The reality is, SAP has not changed its posture on this issue.

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