Articles

A selection of articles by Guido Schneider

SAP Is Checking Your Audit Results – Are You Prepared?

Guido Schneider

The times when SAP would just accept audit results seem to be over. And there’s more: The data you need isn’t as simple as it used to be.

Of course customers audit their systems with tools supplied by SAP (see SAP’s Terms and Conditions). 

SAP can also remotely audit the systems if customers refuse to do so. However, SAP usually doesn’t make use of these remote audit privileges. Instead, it asks its customers to supply additional data.

More data, please

SAP will send not only the measurement plan that usually accompanies an audit request, but also a document “Measurement Deliverables for SAP Software License Audit”. Step by step, this document explains what customers need to do and what data they need to deliver. You could call this an advanced audit.

This document also details when customers have to deliver the data and where to upload them to SAP. Customers should also adapt the measurement plan according to their specifications. To comply with this request is highly recommendable since SAP will use the adapted plan for the audit.

The advanced audit comprises the old standard (License Audit Workbench Report), according to which all Abap-based SAP systems in production and development need to be audited. This means that customers should make use of the tools supplied by SAP like USMM, LAW, and LMBI. If you’re using database Hana, you need to audit it in compliance with the “SAP Hana Database, User’s Guide to Measurement”.

Some engines are licensed for cores. Previously, customers were asked to indicate these in the self-declaration form. Now, customers need to evaluate the number of cores according to SAP’s specifications (Processor Core Worksheet). 

This task needs to be taken seriously because, for example, cluster installations on virtual servers can mean more cores than expected. Engines that cannot be audited in this way still need to be indicated in the self-declaration form.

More than an audit

System data extract is where it becomes really advanced. Regarding development systems, SAP wants to know who has the S_Develop rights, among other things. It’s not about code customizations anymore, but about rights. In productive environments, SAP goes several steps further. Here’s a selection of tables and reports that customers have to deliver data from: UST12, USRBF2, AGR_PROF, AGR_TEXTS, AGR_1251, USR11, SM37, WE21.

If you combine all of these, SAP is requiring customers to bare all: Rights, use, interfaces, IDocs as well as a jobs overview and all repository objects not created by SAP. This is so much more than a simple audit. It evokes the impression that SAP is either not trusting its own audit tools anymore or that the results the tools deliver are not enough anymore. This advanced audit could soon become the new normal.

Leverage the advanced audit blueprint

My recommendation has been to use SAP’s classification guide before sending the audit results to SAP. 

However, SAP is now digging deeper, not trusting customers with user classification anymore, among other things. This is why I now implore you to check all your results before sending them. 

How? Well, SAP itself has already delivered a great blueprint with its guidelines for advanced audits. Use it to be prepared for your next SAP audit.

Looking for pre-audit assistance? Please do drop me a line, I’d be happy to discuss further.

SLC365 was founded to deliver to businesses a complete SAP licensing solution. Guido Schneider, Founder and CEO, is a renowned independent SAP licensing authority whose reputation has been built around his extensive experience in the field having helped over 150 major international clients achieve compliance in their software licensing.

SAP’s response to the current crisis

By Guido Schneider

In the summer of 2020 I wrote an open letter to Christian Klein (CEO, SAP SE).

At that time, the aim was to find out what SAP had done for its customers during the pandemic and some suggestions for how it could support companies in financial distress.

Now that six months have passed and this difficult pandemic situation is our new normal, I’m reflecting again on my ideas and what has transpired since then.

I received a kind answer from Christian Klein.

SAP’s Reply:

Dear Mr. Schneider,

Thank you for your ideas and suggestions.

The majority of our customers come through our partner network, and we are very pleased to have over 21,000 partners in over 140 countries. Accordingly, your external point of view and feedback is of great interest to us.

Best regards

Christian Klein

Board spokesman

He confirmed that he listens to suggestions from the SAP community and that he does take this seriously. That made me very happy.

I would like to say very positively that there was no price increase in 2020. The maintenance costs have not increased any further. Our customers have reported that, if necessary, they have received an extension of the payment period for maintenance costs. Others were able to negotiate a payment plan with SAP. This clearly shows me that SAP empathises.

Unfortunately, Mr. Klein did not respond to my suggestions: for example I wanted to see SAP suspend audits for a certain period of time, but this did not meet with approval. On the contrary, in the last six months we have seen more and more “advanced” audits among our customers.

In a so-called “Advanced Audit”, in addition to the usual information such as LAW, LMBI, self-declaration and database reports, “System Data Extracts” are also queried in Excel format. In the development environment, this involves data from SUIM, E070, DEVACCESS and USR02, for example.

In this environment, the SAP audit team is obviously looking for users who need a developer user license. Why so many confidential details to be sent to the SAP remains open. In the productive environment, additional data is requested from, for example, SUIM, USR41_MLD, USR11, ST03 / ST03N, EDIDC and SM59 (“Show ABAP, http and TCP / IT Connections”). In this environment, indirect use is sought, presumably with the aim of persuading customers to buy SAP Digital Access licenses.

Our SAP customer survey (also conducted in summer 2020) on the topic of SAP Digital Access , which we carried out with our partner Complion AG, showed that SAP’s efforts to establish the new SAP Digital Access pricing model for the licensing of indirect use were not yet successful implementation has been .

The conclusion of the survey was: “The call of SAP customers to make licensing more transparent is still loud, but doubts remain about the fundamental legality of SAP’s demand for additional fees for indirect use.

At the same time, those responsible for the license endeavour to gain more security when assessing requirements and negotiating with SAP. The only thing that is certain at the moment is that there is (still) no question of “transparent and reliable access” in digital access, and so it will remain a “lifelong, but severely limited, trusting relationship” for the time being. “Regardless of this, so my perception, SAP tries to “pursue” the topic of indirect use more and more worldwide.

But back to the topic “What has happened since then?” On September 1, 2020 there was the press release “SAP starts the BacktoBest initiative to support companies in the next phase of the corona pandemic.” (see their Press Release:)

https://news.sap.com/germany/2020/09/initiative-naechste-phase-covid19/

Health and safety and with the workspace booking app, employers can guarantee a safe return of their employees to the office and be able to react quickly to any problems that may arise.

In addition, SAP draws a positive conclusion on the use of the free SAP online training courses, see press release from September 16, 2020

https://news.sap.com/germany/2020/09/online-schulungen-pandemie-opensap/

And October 29, 2020 “University Competence Centers support digital teaching in times of pandemic”.

https://news.sap.com/germany/2020/10/ua-gamification/

As a final example, I would like to mention the collaboration between SAP and PwC. See press release from November 18, 2020: (English version is available via Google Translate)

https://news.sap.com/germany/2020/11/analytics-behoerden-entscheidungen-digitalisierung/

The jointly developed solution is intended to support authorities in the pandemic in making informed decisions.

That is certainly a good approach,  in view of the fact that our fundamental freedoms are currently being severely restricted. This is only possible in a democracy if the proportionality of such restrictions is constantly checked and monitored. In addition to a public discussion, reliable data is essential.

It will be exciting to see how things continue.

On January 27th, 2021 Christian Klein will give an outlook.

RISE with SAP:The Introduction (An exciting announcement from SAP.) https://www.sap.com/uk/about/events/rise-with-sap.html

Stay safe and happy.

Guido Schneider

SAP Digital Access Survey 2020

Transparency and reliability “not yet achieved“

“This makes digital access transparent and reliable” was the slogan with which SAP advertised its new pricing model for licensing indirect use in 2018. A year later, SAP launched the Digital Access Adoption Program (DAAP), an offer to accelerate the spread, especially among its existing customers.”

But how is the acceptance of the SAP Digital Access license model and does the Digital Access Adoption Program offer sufficient incentives for a change? The current survey by Felix Baran (COMPLION AG) and Guido Schneider (Software License Compliance 365 Ltd.) dealt with these questions.

Survey data

The majority of the participants in the survey, which was carried out between June and August 2020, come from German-speaking countries (86%) and from the “manufacturing, trade & services” sectors (93%). Most of the participants stated that they have been SAP customers for more than 10 years (86%). The participants represent a cross-section through different sizes, with:

under 1,000 SAP users (42%)

between 1,000 and 5,000 SAP users (33%) and

over 5,000 SAP users (25%), of which 12% with over 25,000 users.

Knowledge level of those responsible for SAP increased

The majority of all respondents (86%) stated that they had already dealt with the topic of indirect use and were also familiar with the SAP Digital Access license model (82%). An increase compared to the surveys carried out by Guido Schneider in 2015 and 2018 can be observed among companies who are of the opinion that the use of SAP software in their company involves indirect use according to the SAP definition . The following table shows the responses over time:

SAP customers surveyed have not yet made any arrangements for indirect use with SAP. In the case of existing agreements, however, the old form of licensing (named user and order processing licenses) or individual regulations predominate. Few of the respondents (12%) agreed on licensing based on SAP Digital Access.

As a result, it can be said that there is still a large, untapped sales potential for SAP in the licensing of indirect use. A promotion on the sales as well as the audit side can therefore be expected.

Biggest points of criticism: lack of transparency and doubts about legality

The main reasons given for the relatively low acceptance of the digital access pricing model on the customer side are the lack of transparency in connection with the measurement and evaluation of the types and numbers of documents and the legal uncertainty. Other mentions concern the high costs and lack of budget planning for these. The determination of requirements has also not yet been completed in many places.

As a result, it can be stated that while those responsible for SAP have increased their knowledge of whether or not there is indirect use in their company, it is still difficult for them to determine the number of documents for digital access. There is still a lack of Transparency of what and how exactly is counted. The results also show that the respondents, besides the demand for more transparency, missed a legal clarification of the topic. Even today – five years after the first survey – the question of whether SAP is even entitled to charge additional licenses for indirect use has not yet been clarified.

Incidentally, only 50% of those surveyed stated that they were even aware of the antitrust complaint by VOICE – Bundesverband der IT -utzer e.V. against the licensing of indirect use. VOICE accuses the software company that the license terms of SAP are unlawful and that the monopoly is using its strong position in the market for ERP software against its customers to their disadvantage. In addition, SAP is damaging the market for manufacturers of third-party applications with its licensing requirements. The opinion from SAP, which has now reached the Cartel Office, is currently being examined. It is still unclear when a result can be expected.

Incentive program (DAAP) is not working properly

The Digital Access Adoption Program (DAAP) was set up specifically to increase its penetration among SAP customers. Most of the respondents (63%) are familiar with the DAAP, but it does not appear to be an incentive to buy, as 67% stated that they are not sure whether the offer is commercially attractive. After all, from the participants who have already licensed Digital Access, 57% used the DAAP when purchasing the new licenses.

Current reservations regarding transparency and the users’ uncertainty as to whether the SAP approach is lawful at all are weighted higher than pure cost considerations. The DAAP has no broad impact because it does not comprehensively address the key points of criticism of SAP customers. The extension of the program until the end of 2021 is unlikely to change that.

Evaluation yes, but without SAP and external consultants

Nevertheless, SAP customers are grappling with the new Digital Access license model. A third of all respondents said they had already carried out an assessment of SAP Digital Access. Another third are planning the assessment, while another third has no intention of taking a closer look at Digital Access.

The vast majority of SAP customers plan to evaluate Digital Access without involving SAP and without external consultants. From this it can be concluded that this is still a sensitive topic that companies prefer to investigate internally and with their own know-how.

Companies for which the evaluation is not yet on the agenda are probably still feeling the effects no external pressure to act or consciously prefer a certain lack of transparency with regard to indirect use in order not to be forced to act. A procedure that becomes critical when a short-term decision about licensing has to be made and the necessary database is missing.

License acquisition despite a lack of data

Basically, only the SAP Passport Tool, which is also used for system measurement, can provide such a data basis. In addition to the high implementation effort, there are doubts in the community as to whether the tool is even fully developed, whether the results of the tool are reliable or whether other documents may have to be counted in the future than is currently the case. When asked about the use of external license management tools (such as Aspera LicenseControl for SAP® Software, Flexera FlexNet Manager for SAP® Software, Snow Optimizer for SAP® Software or Voquz samQ), over half of the respondents (53%) stated that you do not want to use any of the solutions mentioned for the assessment. A trend that has been continuing since 2015. In all of these cases, you can only rely on your own gut feeling or negotiate with SAP. Both options are risky because experience shows that they are labor-intensive, imprecise and therefore often costly, at least in retrospect.

Insufficient knowledge of the actual amount used Of the respondents who stated that they had already acquired licenses for SAP Digital Access, 71% did so within the framework of the existing ECC contract and 29% within the framework of the SAP S / 4HANA migration via product conversion. However, there is not yet sufficient experience with measurement (audit). Accordingly, no conclusions can be drawn as to how large the deviations between the number of acquired document licenses and the number of document licenses required are in practice.

Conclusion: goal not (yet) achieved

The efforts of SAP to establish the new pricing model SAP Digital Access for the licensing of indirect use have not yet been successfully implemented. The call of SAP customers to make licensing more transparent is still loud, but doubts remain about the fundamental legality of SAP’s demand for additional fees for indirect use. At the same time, those responsible for the license endeavor to gain more security when assessing requirements and negotiating with SAP. The only thing that is certain at the moment is that there is (still) no talk of “transparent and reliable access” in digital access, and so it will initially remain a “lifelong, but severely limited, trusting relationship”.

Authors:

Felix Baran, Complion AG

Guido Schneider, Software License Compliance 365 Ltd.

What to do with your old SAP Limited Professional User licenses

SAP LICENSE MANAGEMENT

The once-discounted SAP Limited Professional User Licenses are a good example of how complex the assignment of license types is in the SAP environment. But what should users do with the old licenses? It could be so easy….

Since publication of the SAP List of Prices and Conditions (PLC) 2014/4, SAP no longer offers its customers the license type “SAP Limited Professional User”. In the first six months after that, existing customers who had this license type in their portfolio could buy it on goodwill under the same conditions. But this was over by mid-2015 at the latest.

SAP customers had two options for continuing to buy cheaper license types. Option one was to purchase so-called special license types at the price of the old “SAP Limited Professional User”. These special license types had to be functionally delimited or restricted compared to the “SAP Professional User”. Many SAP customers took advantage of this opportunity.

However, as option two, SAP recommended to its customers to buy the new standard license types, which were even then far cheaper than the SAP Limited Professional User and are still today. This is still a good alternative. The best examples of these low-cost license types are the “SAP Logistic User” and the “SAP Worker User”.

Let’s take a look at the description of the “SAP Limited Professional User” in PKL 2013/4:

The SAP Application Limited Professional User is a defined user who is authorized to perform limited operational roles (without SBOP) supported by the software purchased. The usage rights also include the rights granted to an SAP BusinessObjects license. The limited usage rights of this limited professional user must be defined in detail in the software contract.

Spongy definitions

“Supported” and “restricted” are attributes that are not clearly defined. These so-called restrictions should have been agreed (” defined in detail “) between SAP and the customer at the time of purchase . However, since both the SAP customers and SAP key account managers are generally very busy people, in my experience these restrictions often remained undefined.

This courtesy has now been gradually expanded. There were customers who could shop at a ratio of 30 to 70, 40 to 60 and even 50 to 50. It’s all a question of individual negotiation tactics. In mid-2014, the German-speaking SAP user group (DSAG) announced to its members the ratio of 50 to 50 as the standard ratio of “SAP Limited Professional User” to “SAP Professional User”. Well naturally every SAP customer wanted to buy SAP user licenses under these conditions.

What also remained was a low price. In order not to give this low license price to customers indefinitely, SAP limited the number. Initially, a ratio of 15 to 85 was agreed in the SAP contracts. This meant that customers could buy a maximum of 15 percent of their professional user licenses at low prices (ie at the price of the “SAP Limited Professional User”). That was the “restriction”. Basically, it was a contractually limited discount from SAP. As already mentioned, the license type was not functionally restricted.

Extension of the restriction

However, that was perhaps not what SAP wanted. Is it reasonable to assume that for this reason, among other things, new, functionally-restricted license types were included in the PLC and the “discounted professional users” were deleted from the price list?

What does the typical user license landscape look like?

SAP customers usually have “SAP Professional User” and mostly also “SAP Employee User” in their portfolio. In addition, most have the “SAP Limited Professional User” licenses described above, as well as some of the inexpensive “SAP Logistic User” or “SAP Worker User”. Some customers also have a whole range of so-called special license types. They negotiated some of them themselves, while others bought them at the old discounted professional user price.

The more different user license types customers have in use, the more difficult it is to assign them to the SAP accounts. The “SAP Professional User” is generally allowed to do “everything” in the SAP system – except ABAP software developer but there are exceptions for this too. Each customer must interpret the descriptions of the restrictions of all other license types himself.

Numerous questions arise: What exactly is allowed Employee do with his SAP account to which a “SAP Logistic User” or a “SAP Worker User” has been assigned? What does the “may” refer to? Does “may” mean what he is entitled to or what he has actually used? SAP only offers the so-called classification aid in the USMM measurement tool. And what do you as a SAP customer do with your unrestricted but discounted “SAP Limited Professional User” licenses? As you can see, the world of licensing is complex.

Suggestion: walk

As described, the old “SAP Limited Professional User” has the same rights as the “SAP Professional User”, that is, both are – apart from the price – equivalent. For this reason, they can also be awarded equally. Since you can no longer buy them today, it would make no difference to SAP if they offered their customers the free 1: 1 conversion. The maintenance costs, which are always sacred to SAP, would not change. SAP customers only have one license type less in their inventory.

Why not suggest this to your SAP Key Account Manager. Perhaps he will respond and convert your “SAP Limited Professional User” licenses to “SAP Professional User” licenses for free. It makes no difference to SAP. Assigning user licenses would be easier for you. Should you be on S/4Migration, then you would have solved the question in the same breath: “How do we convert the old SAP Limited Professional users into SAP S/4HANA users?” You will then no longer have them in your inventory.

Alternatively, if your SAP Key Account Manager does not agree with your next purchase, you can do this in “SAP S/4HANA Enterprise management for Professional Use” licenses. From this point of view, the problem with the old” SAP Limited Professional User “will probably resolve itself in the next few years.

Guido Schneider

Open Letter to SAP

Dear Mr. Klein,

To quote Albert Einstein ‘In the midst of every crisis lies great opportunity’. One could argue that the deeper the crisis, the better the opportunity. No one has experienced such a crisis of the magnitude of this ongoing pandemic; good leaders are able to acknowledge the unexpected difficulties of this situation whilst also spotting opportunities to exercise entrepreneurial and economic responsibility by making changes in response.

This willingness to change and respond applies to local and national governments and of course also to global companies. The measures that large companies such as SAP take now can make a big impact on so many enterprises that are now struggling. 

Stepping up to respond to these needs reminds me of the ‘glory days’ of SAP in its founding days almost 48 years ago with a clear goal: to improve the processes of the global economy and improve people’s lives. SAP managed to achieve this lofty goal by the end of the 1990s: at that time the group was more than a software manufacturer from which you bought its ERP software; it was a partner. This also applied to internal cohesion. Anyone who has personally experienced Hasso Plattner’s (SAP’s founding father) leadership style knows what I’m talking about.The community is therefore pleased that SAP is taking the opportunity to strengthen the bond with partners and customers in the corona crisis. With your strategy of concentrating on the integration of the purchased software products in the future, you rightly put yourself at the top of SAP, Mr. Klein. That position can now be used to make a big difference to those struggling in the pandemic.

A series of emergency measures in the crisis

The list of welcome measures that SAP has already announced taken is long and the examples given here can be continued as you wish. 

There are the quick measures to protect your employees ( SAP News from March 18, 2020 ), and the guarantee of global operation and support, with which SAP fulfilled its role model function.   

There is now support from the federal and state governments with free platforms . On March 12, 2020, SAP provided free access to SAP Ariba Discovery and TripIt for existing, – new and non-customers (“open to everyone”) so that supply chains could be maintained. There is also free access to the learning platform openSAP. All SAP training courses in the home office can be attended free of charge via the “SAP Live Class”.

With its partners EY and Qualtrics, SAP supports governments around the world so that they can “tackle the most urgent tasks in dealing with the pandemic consequences”. The tools on offer include “COVID-19 Pre- Screening and Routing”, an online questionnaire for people who fear that they may be ill.

The implementation of the new smartphone app should also be mentioned to support the return campaign for German holidaymakers. On behalf of the German government, you and Deutsche Telekom are performing another important task with the development of the “Corona app”. That creates trust and confidence.

According to some economic experts, the corona pandemic will be followed by a global recession. Short-time work and the bankruptcy of numerous companies are already the order of the day. Some SAP customers are likely to have financial difficulties as a result of this. In order not to have to file for bankruptcy, their board members and managers have to cut costs quickly. Given the current payment obligations from SAP contracts, this is not easy. In addition, SAP customers continue to rely on legal certainty in order not to make themselves liable during these times.

But has SAP gone far enough? I’m heartened by what has been done, and I believe that these actions can expanded. Below are some ideas and suggestions on how SAP can further help your customers and show the “empathy to action ” that was much quoted in May 2017 by your predecessor Bill McDermott.

Additional corona support ideas for SAP customers: 

1. Enable partial decommissioning of licenses immediately and without restrictions

Because of the pandemic crisis, software is being less-used or no longer needed in some industries. In addition, SAP customers have put shelfware in the closet over the years, which they cannot shut down due to the current contractual practice of SAP. The upcoming SAP S / 4HANA migration enables customers to convert their investments 1: 1 into new products using the so-called “contract conversion ”. This also includes shelfware – even if it is the “wrong”, too expensive user license types that were never needed. I suggest that the “dissolving” of the legacy issues be brought forward and that customers can now immediately and partially allow partial closures. This could immediately reduce the maintenance costs for licenses that are no longer required. 

2. Suspend audits

When IT and basic administrators return to their workplaces, they will have their hands full to ensure the operation of their SAP systems. Nobody has the time (or nerves) for an audit. Due to the lower usage, the audits will also find out exactly that. Therefore, I propose to suspend the audit cycle for all customers this year. Customers who want to start new projects or migrate to S / 4HANA will also do so without an audit. Trust your customers, Mr. Klein, then your customers will trust you too.

3. Commit to legal security

In my opinion, SAP’s reputation has suffered a lot in the past five years. This was mainly due to the aggressive appearance of numerous account managers, who suddenly and often for many customers often did not understand why they required extensive post-licensing for usage scenarios which, according to the understanding of the customers concerned and their respective legal departments, are part of the licenses acquired. The price and conditions list (PKL) is unclear in many places and leaves room for interpretation. Guaranteeing license compliance has also become a roulette game for conscientious customers who are professionally positioned at SAM in recent years. For this reason, at least the following changes to the PKL are strongly recommended:

1. “SAP NetWeaver Foundation For Third Party Applications” replacement underline. This factually unjustified license type (material numbers 7009523 and 7009524) is still in the current PKL. This license type will no longer exist under SAP S / 4HANA. On- premise customers should no longer be obliged to use this license type. 
2. “SAP NetWeaver OpenHub ” (7009506) and “SAP OpenHub for S / 4HANA” (7019816) should be deleted without replacement. “With these usage rights, data from SAP BW can be exported asynchronously and not in real time to non-SAP software applications.” (Source: PKL Germany Q2 / 2020). If you have properly licensed your SAP BW, then you should also purchase an additional license for the export of data that you previously generated yourself. According to some well-known legal experts, this license obligation is not in line with copyright law. Customers who purchased this license could now shut it down and convert it later as part of the S / 4HANA migration. 
3. Indirect use and digital access

The list prices for the so-called “digital access” must be dropped or at least significantly reduced. The topic of indirect use is known to be the main reason why the SAP community has been unsettled and upset in recent years. Here too, the legal situation is complicated. The licensing model can be questioned for both copyright and antitrust reasons. So far, judicial judgments through commercial agreements have been avoided. A complaint by the IT user association Voice before the Federal Cartel Office is still pending under antitrust law . If SAP customers put third-party applications in front of their SAP systems without any functional added value just to save on SAP license costs, it is certainly an unacceptable license evasion, which of course does not have to be accepted by SAP. Where third-party applications provide functional added value for the customer, their communication with the SAP software is a proper use of the SAP software, for which no separate license fees should be incurred. Software must not only be technically, but also economically interoperable. “Interoperability” is an important buzzword in this context. SAP software would certainly be economically successful on the market even without charging separate license fees for indirect use because it is functionally convincing and technically capable of exchanging data with other software components via standard interfaces. With PKL Q1 / 2017, SAP increased the price for “Sales & Service Order Processing” by a factor of 200. This is the counterpart (forerunner) to digital access. Now there would be an opportunity to withdraw this price increase. Simply change the block price from 1,000 to 200,000 documents (factor 200).

4. You have already extended the “ Digital Access Adoption Program “ (DAAP) until December 31, 2021, otherwise I would have recommended this too.

Dear Mr. Klein, I was pleased that the measures mentioned at the beginning were reminiscent of SAP’s mandate at the time it was founded. With a stroke of a pen, you could now improve the processes of the global economy and the lives of many people. Imagine this headline: “SAP shows empathy in times of unprecedented crisis – and inspires its customers”. How much trust would you win back? How many customers could you use to help you out of the crisis? The financial damage to SAP would presumably remain manageable and possibly even be offset by a rising share price. And you would not only be a good crisis manager, but a real hero for the entire global SAP community. And beyond.

Yours sincerely

Guido Schneider

Is Indirect Use Making Complicated Even More Complicated?

What should we understand ‘indirect use’ to mean in context of SAP? Which licenses should customers buy? Which license do customers need to buy? With the change to the description for ‘SAP NetWeaver Foundation for Third Party Applications’ in the List of Prices and Conditions (‘PKL’) 2016/2, the confusion has increased.

The topic of ‘indirect use’ should be considered from two viewpoints: on the one hand, it is a matter of application-users using SAP software either directly or indirectly. For this, and depending on use, a corresponding right of use is needed in the form of a ‘named-user license’.

On the other hand there are applications that use SAP technology.  For this, SAP customers should obtain from SAP a corresponding right of use for the ‘SAP NetWeaver Foundation for Third Party Applications’.

Application-user’s perspective

In scope of indirect use by the application-user, it is a comparatively simple case. As SAP sees it, it is about prevention of misuse. It demands that everyone using SAP software possesses a corresponding right of use to do this – independently of how access to the SAP software is obtained.

Initially this is understandable and it is easy to see the rationale. Salesforce.com is often cited as an example. If SAP customers decide against SAP’s CRM solution, and instead connect Salesforce.com to their SAP systems, under certain circumstances SAP functions (e.g. from the SD module) are used nevertheless.

SAP demands that customers buy a right of use to do this. It is now up to the SAP customer to determine whether the application user already has a named-user-license sufficient to the requirement.

If up to now an employee has only had a so-called employee license, this is not enough for obtaining access to the SD module via  Salesforce.com. In this case, additional purchase of an ‘SAP Professional User’ license would be needed and the existing employee-license could be used by another colleague.

It gets more complicated with the ‘SAP NetWeaver Foundation for Third Party Applications’ license. This topic is not new; rather, SAP Sales has been directing increasing attention to it since 2015, in SAP System Surveys.

NetWeaver Foundation for Third Party Applications

Since NetWeaver was introduced, the description has changed again and again. This is where the difficulty starts: which of the various descriptions applies? The decisive issue is when the customer has acquired the NetWeaver license, or respectively when he last made a follow-up purchase of SAP licenses.

If an SAP customer last made a follow-up purchase of SAP licenses three years ago, the price-list (PKL) of three years ago applies – not that of 2015 or 2016. Up to and including the PKL 2016/1, SAP customers obtaining the NetWeaver license solely gained the right to let SAP software run on an SAP technology (NetWeaver Runtime environment).

SAP’s position is that application-users’ own applications and also third-party applications require a separate right of use, namely the ‘SAP NetWeaver Foundation for Third Party Applications’ license.

From the legal viewpoint it is more than questionable whether, in addition to acquiring the so-called developer-license, it is in fact necessary to obtain a further authorisation for operating one’s own in-house development.

Likewise, for bought-in solutions it must be clarified in the individual instance whether SAP’s copyright is being violated. Since the PKL 2016/2 and also in the PKL 2016/3, which has made no changes in this regard, the issue is no longer whether SAP technology is being used or not.

Rather, the issue is the use of an SAP interface and the access to information from SAP application tables. If both these criteria are fulfilled, and third-party applications are used in this context, SAP demands the ‘SAP NetWeaver Foundation for Third Party Applications’ license referred to.

For a customer to find out whether it has an obligation to get a license to cover indirect use accordingly – and with which application – it is recommended to conduct the following analyses:

1. SAP contract analysis:

What have I bought and when and (with regard to NetWeaver use) which PKL did I thereby acknowledge? In the case of several active SAP contracts, differing definitions apply in some instances – of course, this raises the question of which one really applies.

2. SAP architecture analysis and also analysis of use

Which third-party application uses an interface to access which SAP application data? Or is the user only accessing their own data in the SAP tables? How many users are using this application? According to the latest definition, whether the application runs on NetWeaver technology is not of significance.

The latter amounts to a stricter definition, because prior to the PKL 2016/2 it was required that the application ran on the basis of the NetWeaver technology. According to the definition currently valid, this is no longer the case.

Remaining with the example of ‘Salesforce.com’: up until PKL 2016/1 a right of use ‘only’ had to be acquired for application users; starting with the PKL 2016/2, for Salesforce.com it is also necessary to buy  the ‘SAP NetWeaver Foundation for Third Party Applications’ license.

3. Examination by legal professionals

After the first two analyses, determining the maximum financial risk, a check should be conducted by legal professionals. It must be evaluated for each application whether or not there is a copyright violation. SAP writes various definitions of the NetWeaver technology into its PKLs; however, this does not mean that any claim justifiable in legal terms is yet to be deduced from this.

The topic of ‘indirect use’ is consciously a multi-layered one; anyone seeking unambiguous answers does not find them. While contract analysis and legal evaluation are purely manual activities, system analysis and analysis of use can be carried out with the support of tools (e.g. with SmartTrack License Control for SAP).

In view of the problematic issues described, SAP’s system analysis cannot determine whether a given instance constitutes ‘indirect use’. Per application, it is up to each SAP customer to determine for themselves whether an ‘SAP NetWeaver Foundation for Third Party Applications’ license is necessary.

It remains an absorbing question how ‘indirect use’ will develop in the future – and primarily whether SAP will continue with its massive follow-up payment demands to its customers, begun in 2015.

Guido Schneider E-3 Magazine 2/7/2019.

Eight challenges in SAP license management

SAP has always left it up to customers to allocate SAP user licenses in accordance with the details of their individual contracts. Vague documentation on what users can and cannot do with the various license types does not make this process any easier.

In recent years, new products and “new” license metrics such as HANA licensing, SAP engines, indirect access or the cloud have made it almost impossible for licence holders to establish transparency or gain a clear overview of the SAP licences they use and need in their companies. Many SAP customers were perfectly comfortable with this; after all, they had “the best SAP contract” and the “best conditions”, why would they need to take a closer look at their license usage? Now this attitude is coming back to haunt them, as they find themselves facing multiple challenges with regard to their SAP license management – challenges that cannot be resolved with SAP audit tools or manual Excel-based solutions. Their actual need for SAP user licenses is based entirely on SAP system usage, which – as we have long been aware in SAP user and role management – changes constantly.

1. SAP license purchases are based on estimates of future system usage. When SAP products are launched, the customer’s existing license pool is usually not taken into account. This is due to the fact that the SAP sales department’s offer is based entirely on information provided by the customer. In most cases it is however impossible for SAP customers to determine how many employees will need a license, or rather, precisely which employees will need licenses in the future, before the project actually starts (before the product is launched). As a result, the amount of required user licenses has to be estimated, which leads to SAP customers buying new SAP licenses for employees who already have the necessary usage rights. Overlicensing is therefore almost always inevitable.

2. Interpretation of different license types: SAP has been offering new user license types on their price lists for some time now. Compared to the expensive “SAP Professional User” license, prices for these license types are extremely attractive. Their descriptions, unfortunately, are not. As has been the case in the past, they leave room for interpretation. For instance, no list describing exactly which transactions a user is permitted to execute with the corresponding license is provided. But without this information, how can a company determine which license types they need? The wake-up call usually comes with a SAP system measurement further down the line, when SAP “claims” that the license type is not sufficient for its actual use. Then the company will have purchased the wrong license types and find itself additionally paying for expensive maintenance it cannot even use.

3. Allocation of Named-User license types: According to SAP’s standard terms and conditions, SAP customers must allocate licenses in accordance with their use. However, before users can work with SAP, they have to have the necessary SAP permissions. These two terms are often confused, making allocation of Named-User licenses based on allocated SAP roles extremely costly. Anyone who is familiar with SAP permissions knows that every SAP user has more permits than he or she actually needs. There is no effective way to avoid this, as business needs result in permits for SAP roles increasing constantly over time. And because uses are constantly changing, allocating license types manually in SU01 doesn’t make things easier either. An employee who needed a “SAP Worker User” license last month, for instance, might need a “SAP Project User” license this month because he or she has changed departments and therefore their field of work. The SAP basis department however will frequently be unaware of these changes. The result: user licenses are allocated incorrectly and the license pool does not match the actual usage.

4. Constant changes in license demand: As previously stated, usage of SAP systems varies constantly. Employees leave the company, new staff are hired or their roles change. Today’s license pool can already be the wrong one next year. But how can companies monitor these changes? Which of their obsolete licenses can they shut down? Manual tracking via Excel lists cannot answer these questions. The same goes for SAP engines. The amount of and need for purchased licenses is constantly increasing – from SAP’s point of view. New SAP products replace old ones which are no longer being developed. These licenses could potentially be changed. But how can companies stay on top of these processes? What has been installed? What is still in use and what isn’t? A SAP audit is of no use here because SAP still measures many SAP engines incorrectly, if it measures them at all.

5. Commercial challenges through constant changes to the Pricing and Conditions List (PCL): SAP issues a new list of prices and conditions every quarter. DSAG endeavours to document the changes. But who has time to go through a long list of changes every three months? Which alterations could affect your own business? Are the changes relevant? In principle, only the specific PCL that applies when you purchase your SAP licenses matters. But if you want to proactively optimize your license pool, you should know which license metrics have changed. Is the product you bought a year ago still available at the same conditions in the current price list? Or will you have to switch to another metric in the short or medium term? Will the new metric be cheaper or more expensive for you?

6. Unspecific contracts and price lists: Even if you are familiar with your company’s SAP contract(s) and the corresponding Pricing and Conditions Lists – the descriptions offer no clear interpretation. You basically never know if the SAP sales department (SAP compliance department) will unexpectedly present you with new demands during the next contract negotiation. As the current case regarding “indirect access” illustrates, this represents an incalculable financial risk for all SAP customers. Furthermore, it depends when SAP NetWeaver was introduced. Mrs Renate Thomas-Marcinkowski of Continental Automotive GmbH pointed out at our last Expert Roundtable in Cologne that depending on the NetWeaver license options chosen in 2007, “indirect access” may be a non-issue – something probably only few SAP sales representatives or SAP customers know. The same goes for the SAP product “Open Hub”: the external systems connected via Open Hub do not require additional licenses for what is known as “indirect access”. In such cases, an initial SAP system architecture analysis has to be carried out in addition to the SAP contract analysis and the SAP system use analysis in order to determine the actual demand for SAP licenses.

7. SAP system measurement: Any SAP customer will probably have realised by now that his or her actual license demand cannot be determined with SAP’s audit tools. From SAP’s point of view, the SAP audit tools have only one purpose: to generate more turnover from long-standing customers. It’s no secret that these audit tools are flawed and may produce inflated results because the user summary is not working optimally or license consolidation fails to correctly consider the client-specific license types. The manual system clean-up many businesses perform is time-consuming and prone to errors. SAP engine measurement has already been discussed. “Indirect access” cannot be measured at all. Java systems? HANA? Business Objects? Of course SAP is continuously developing its audit tools. Particular caution should be exercised with LAW 2.0. SAP needed an entire year to get it working at all, and it is still defective in many areas. I can only advise against using it at this point in time. But what will SAP be able to measure in the future? Will it be able to recognise if a SAP user with a “SAP Worker User” license performs a transaction that is not part of the Worker User scope? If I were responsible for these things at SAP, I would include this in system measurement in the future.

8. Compliance, a legal necessity: “Compliance” is a difficult issue when it comes to SAP licenses. Basically, you can never really be SAP compliant. The SAP contracts, the Pricing and Conditions List and the descriptions are far too vague. On the other hand, CEOs are personally liable if they commit copyright infringement. This applies, for example, if SAP systems are used without having purchased the corresponding user licenses. Or in other words: if the company is underlicensed. That is why I believe SAP’s vague descriptions are a trick they will probably keep up in the future. Worried about underlicensing, SAP customers will prefer to purchase more licenses than they actually need. That way, they feel on the safe side. As long as the SAP sales department is happy, so is the CEO. And SAP will grant you a generous discount for the purchase of your useless excess licenses. So, the SAP customer manages to get “the best deal” again. Wouldn’t it be better to just buy what you really need? That would also be a way to achieve compliance.

Conclusion

SAP licensing is an increasingly complex topic in which SAP does not support its clients. Instead of helping them, customers are confused by questionable additional demands and inadequate audit tools. The consequence are unnecessary license purchases in the order of millions – not least due to fear of underlicensing. Manual “system adjustments” prior to a SAP system measurement or tracking use via Excel do not solve these challenges. SAP customers who become aware of these challenges seek the assistance of external SAP license experts who not only have the corresponding experience at their disposal but also the tools to regain transparency within the SAP license jungle. Only those who have a constant overview of their SAP system usage know what they need to purchase and when, and which user licenses to shut down.

Global Security Magazine June 2016

https://www.globalsecuritymag.fr/Guido-Schneider-Aspera-Software,20160608,62751.html

SAP creates licensing model for the Internet of Things

A new pricing model for indirect use should set it up. With its announcement in April, SAP created one thing above all: a new licensing model for the Internet of Things. But when does it apply and what does it mean for customers?

On April 10, 2018, SAP presented a new sales, audit and pricing model for so-called indirect use, which was developed in close cooperation with user groups, customers, partners and analysts. The new approach is intended to ensure that customers will be able to use their SAP licenses more easily and transparently in the future. It differentiates between direct / human (human access) and indirect / digital user access (digital access) and, according to the software manufacturer, creates clear rules for licensing, software use and compliance. How are the innovations to be assessed?

It is initially unclear whether the announcement by SAP will already be included in the new price and conditions list (2018/2) or will only be included in a later PKL. The topic of indirect use has repeatedly unsettled SAP customers since the end of 2014. 

From this point onwards, the SAP sales department had increasingly confronted the user companies with the topic. The main problems in determining indirect use since then have been the interface analysis and the determination of external (indirect) users via third-party applications. In addition to the number of users, the appropriate named user license type had to be determined.

To cushion this problem, those responsible for SAP had defined exceptions, some of which were based on the licensing of so-called engines / packages. Even back then, for example, orders were counted instead of users if the SAP customer had this licensed. The largest software house in Germany expanded this approach with the announcement in April.

How good is the choice for existing customers?

The press release said: “Digital Access – Access via third parties, Internet of Things ( IoT ), bots and / or other digital access that can be licensed on the basis of the transactions / documents processed by the system itself.” To date, SAP did not have a license model for the “Internet of things“- this has now changed. Existing customers should now be able to choose between the two models” SAP Named User “and” Transactions / Documents “.

Read more about the new license model from SAP:
SAP regulates indirect use new SAP’s new license
menu is not tasty for everyone

A possible downer: SAP customers will probably have to decide 100 percent in favor of one or the other variant. However, a choice per application would certainly be in the interests of the customer, since some third-party applications send only a small amount of data to the SAP systems and others are operated by fewer users. For user and license monitoring,SAPThe announcement goes on to provide suitable tools.

Conclusion: “Intended use” is a thing of the past

SAP has a model for billing the “digital transformation“- for example the Internet of Things ( IoT ) – was created. From SAP’s point of view, this was important in order to create clarity. Existing customers did not previously know what to expect. This uncertainty is now decreasing However, it remains to be seen that SAP will recover from its unfortunate sales behavior over the past three years.

It should be noted, however, that there will soon be no such thing as the “intended use” of the “SAP Business Suite” and in the future “SAP S / 4HANA” and “SAP S / 4HANA Cloud”. There used to be interfaces to Enterprise Resource Planning (ERP) to import and export data. After all, that was the purpose of a central ERP solution. In the future, customers will have to pay extra for this based on the transactions / documents – but they are already used to that with indirect use. The announced clear separation between license sales, audit andCompliance ultimately no further.

Originally published in German May 23, 2018 Computer Woche (Computer Week) Magazine

https://www.computerwoche.de/ap/guido-schneider,2549

SAP customers are threatened with a new license disaster

After years of quarrels about the “SAP NetWeaver Foundation For Third Party Applications” and “indirect use”, the next surprise is looming: SAP wants to request user licenses based on SAP authorizations. The associated back payments are likely to be substantial.

After SAP has been asking its customers to make some drastic additional payments since 2015 with the topics “SAP NetWeaver Foundation For Third Party Applications” and “indirect use” and thus made headlines, the next negative surprise could now come for customers. The German software company uses a license condition that has been in the price and condition lists (PKL) of SAP for a number of years : user licensing based on SAP authorizations. The resulting back payments for customers could be drastic again.

What is currently happening? If you look at the price and condition lists (PKL) of SAP, version 2017/4, you will find the following description on page 25: “The SAP Professional User is a defined user who is authorized by thesoftware, for which usage rights have been acquired (without SAP Business Objects Platform – SBOP), to perform supported operational and system administration or management roles … “. Furthermore, on page 12 of the same PKL it is defined:” Named User is an employee of the Client or its affiliated companies, or an employee of business partners who is authorized in accordance with the acquired right of use to access the package in question. “

These descriptions are not new to the PKLs of SAP. Anyone who has bought or re-bought user licenses in the past few years has acquired them on the same terms. This means that the user licenses are granted according to the respective authorization, which is linked to the license type according to the list of prices and conditions, and must be licensed by the customer and not – as is generally the case and as has always been the case in licensing practice in the past was lived – according to the transactions and accesses actually carried out by the customer. As early as 2017, those responsible for SAP had repeatedly announced at events or discussed in individual customer discussions that the allocation of SAP user licenses is based on SAP “authorizations”.

The sum of the authorizations is decisive

What does this mean for user companies? Every SAP user has to have a specificLicensebe assigned. The different license types differ according to the scope of the functions they cover. The smaller the permitted range of functions, the cheaper the license. In order to keep their costs as low as possible, companies naturally strive to always issue the cheapest license for their SAP users. A license administrator usually orients himself to the functions that the user has actually performed.

That should no longer work like this in the future. Is it up to theSAP, the scope of the functions that the user could use, the license type and thus the price should determine in the future. It’s like having a driver’s license tied to a specific vehicle. With usage-based licensing, it doesn’t matter whether a new Mercedes Benz or a 1987 Toyota Corolla is being driven. You always pay the same license fee. It would look different with authorization-based licensing. The amount to be paid is then no longer based on the vehicle that you actually drive, but on all the vehicles that you could theoretically drive.

Here you will find further important information about the licensing of SAP software:

Eight tips: regulate
indirect use with SAP Avoid risks associated with indirect use of software
Indirect use of SAP systems – what you should know
Tips on indirect use: SAP – friend or foe

Which functions a user in SAPcan call is determined by its permissions. As of today, authorizations are mapped in so-called authorization roles that are assigned to the individual users. These are not individually tailored to each user, but rather combine certain functions in order to keep the number of different roles clear. A user will therefore always be entitled to more functions than he actually uses.

For example, if a narrowly defined worker license was sufficient for 600 euros up to now, an expensive professional license for 3200 euros may soon be due. And that’s only because the user is entitled to an additional, but never used transaction within the scope of his authorization roles, which does not, however, fit into the narrow definition of the worker license.

New USMM 2.0 from SAP examines authorizations

But that is not enough: SAPwill also revise their surveying tool “USMM”. The current USMM examines in the classification aid who has made changes to important SAP tables and then outputs a list of SAP accounts that must be licensed as “SAP Professional User”.

In other words: So far, the current, official measurement tool from SAP has examined which user has actually carried out which transaction – not which abstract authorizations are associated with the respective user role. That should change in the course of the year. After the introduction of LAW 2.0 (License Administration Workbench) there will also be a new “USMM 2.0” in the future. It is very likely that this will check the authorizations granted by the customer and no longer the transactions or table accesses actually carried out.

Previous agreements soon to be ineffective?

The whole thing should of course also have legal consequences. Anyone who has been a SAP customer for a long time will probably have purchased user licenses earlier according to their actual use. But in the recent past he will also have bought user licenses based on the respective authorizations. The question of which metrics apply when licenses that were acquired under the old and new PKL come together has not yet been finally contested and decided in a German court.

Until a court decision has finally clarified this question, SAP customers must assume that the changed general terms and conditions and thus also the respective PKL apply to B2B business relationships at the time the contract is concluded and that earlier agreements become ineffective at the same time.

Conclusion

It is undisputed that SAP has repeatedly changed its terms and conditions over the years. The legal effectiveness of this licensing practice has not yet been legally verified by German courts or the European Court of Justice. Until such a legally binding decision has been made, this means that SAP customers must change the allocation at the latest when the new USMM is introduced. Anyone who does not have an optimized SAP authorization concept – i.e. if employees have more authorizations for their daily work than they actually need – will have to buy more expensive licenses in the future.

Then customers will also ask themselves what they should do with the many cheap license types, such as the “SAP Worker User” or the “SAP Logistics User”. They will probably no longer be able to assign these, unless they have clearly defined SAP worker roles or SAP logistics roles that only contain the transactions and reports that employees with the appropriate license are allowed to execute. Otherwise, the motto in 2018 is: diligently buy “SAP Professional User” licenses – and that should not be cheap.

Originally published in German May 3 2018, Computer Woche Magazine (Computer Week)

https://www.computerwoche.de/a/sap-kunden-droht-neues-lizenz-unheil,3544437