Feb 28, 2017

Magical Staircases in SAP Castle – Part 2

Last week, I introduced 3 savings strategies to help manage SAP licensing. Staying a step ahead of SAP’s hidden price increases is reminiscent of Harry Potter trying to maneuver the magical staircases in Hogwarts castle. There are hard to find spiral staircases, trapdoors with floating ladders, and steps that shift direction. The good news is that there is a solution that exist to fit each scenario.

Staircase #4: SAP Named User Licenses

Named user licenses are the biggest cost factor in many companies. Think of them as a wide marble staircase that leads to five smaller spiral staircases: those wanting to reach the top must make the right decisions early on.

1. SAP Limited Professional User

This staircase has almost disappeared because SAP abolished the subscription license type called ‘SAP Limited Professional User’ in its 2014/4 Prices and Conditions. It was left to the customer to define the limitation if they wanted to purchase this cheaper license type later. This discount is no longer offered to new customers.

Expert recommendation:

Use your own initiative in this instance! Agree on a tailored special-use license with SAP that is ideally more cost effective.

2. Direct and indirect usage

In accordance with SAP’s T&Cs and P&Cs, customers require usage rights to use SAP software. It doesn’t matter whether access to SAP software takes place directly (i.e. via the SAP GUI) or indirectly (i.e. via an interface and third-party software). For indirect usage, it is now up to the SAP customer to determine whether the user has a suitable named user license or not. If a suitable named user license doesn’t exist for the user, then the SAP customer may purchase what is known as the ‘SAP platform user’ license for this user. With this license, the user is allowed access to any interfaces in SAP software and can use them as long as the user does not access SAP software directly.

Strictly speaking, this requirement is not a new step in SAP. However, since 2015 SAP now actually requests this license from its customers.

Expert recommendation:

Issuing the required licenses for users who only access and use SAP software via interfaces is expensive. First of all, you need to determine which interfaces are being used to access SAP systems. Then you need to establish whether SAP software is also used, since only then can SAP request a usage right for it. Then, you need the list of users for licensed interfaces (add-ons). You need to compare this list with the users that already have a named-user license in the SAP systems. Last but not least, you must then register the number of required ‘SAP platform users’ with SAP and purchase licenses later. Keep in mind that SAP does not provide a solution for managing these licenses. You can only implement this with an external SAP software asset management solution. Because (direct or indirect) usage changing daily, customers almost always need to set up an external solution to manage SAP software licenses.

Get instant ROI and save 10% on SAP total license spend!

3. SAP Developer User License

Inspecting existing SAP developer user license types is currently an important issue for SAP. The development environment has to be assessed, and SAP does not permit developer license types to be issued for production. If you have not purchased special SAP developer user licenses for modifying software and SAP compares the assigned developer keys from the service market place with the assigned developer licenses, you may be subject to subsequent licensing in the event of deviations.

Expert recommendation:

Clarify whether the person who actually develops is therefore implementing modifications or developing add-ons. Admin users do not need an SAP developer user license purely because they use the workbench. Check whether there are admin users who have a developer license but do not actually need one.

4. The technical accounts

A technical account is quickly deemed a chargeable ‘dialog user type’, although this should actually be the user type ‘service’, ‘system’ or ‘communication’. When it comes to user classification, SAP has started focusing on this area with a keen eye. If a license type has been incorrectly input for a ‘Dialog’ user account, the USMM/LAW calculates the exact license type that was submitted. Now that can be expensive.

Expert recommendation:

Make sure to check all technical accounts exactly and reclassify (select the correct user type) if necessary. Without a magic wand, you will not get far.

5. SAP Test Licenses

Here is another favorite topic for SAP, as experience shows that companies have a multitude of test licenses in production. SAP has been focusing its attention on this area, as it is not actually permitted according to the latest Prices and Conditions (which was previously not the case). If each account in production is chargeable, costs rise significantly.

Expert recommendation:

Analyze whether the test accounts are actually used. Often, these accounts aren’t in use. Create a list of all test accounts—BEFORE the survey! —and confirm them with SAP.

Staircase #5: SAP NetWeaver Foundation for Third Party Applications

‘Indirect usage’—a magic word for SAP, but most likely the misnomer of 2015 for customers. The definition in the 2016/2 P&Cs has increased the confusion. Hardly anyone understands what is meant by ‘direct database access to SAP application data’. During the next round of contract negotiations, customers should anticipate this topic.

Expert recommendation:

Clarify which third-party application accesses which SAP application data via an interface. How many users use this application? A contract analysis, as well as a system and usage analysis, is indispensable to determine the maximum financial risk. The final legal check should assess whether a copyright infringement exists or not. For every non-SAP application, every SAP customer is required to determine the license risk themselves. A specialized tool such as LicenseControl for SAP can make a savings difference totaling millions.

Surviving SAP Castle

Similar staircases will continue to pop-up in SAP castle. What comes next? One thing is certain: contract negotiations with SAP are not getting simpler. Subsequent payments for existing customers are growing although often nothing has changed in their SAP usage. While customers are constantly striving for compliance, SAP is pursuing ambitious turnover and product strategy objectives—and it is here where all the tension lies.

And so, most SAP customers are only at the beginning of their heroic journey and the situation appears hopeless: the villain too strong, the hero still inexperienced. However, thanks to preparation and the help of a mentor like a SAM expert and/or lawyer, the tide may turn. In the end, customers will reign in their own kingdoms once again, saving a lot of money in the process, becoming equal trading partners, and garnering the recognitions of their companies.

All customers have to do is take that first step in the right direction.

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Topics: License Optimization, SAM Insights, SAP