The Back­ground on the SAP Licens­ing Conversation

Since Sep­tem­ber 2017, ASUG and oth­er glob­al user groups (includ­ing DSAG and SUG­EN) have brought the voice of the cus­tomer into the deci­sion-mak­ing process at SAP to address some chal­lenges relat­ed to licens­ing, sales, and audits.

Through the process, ASUG has remained focused on what we con­sid­er the top three objectives:

• Define and clar­i­fy the key terms relat­ed to licens­ing, espe­cial­ly indi­rect access (also known as indi­rect use).
• Iden­ti­fy the actions cus­tomers can take to under­stand whether they’re com­pli­ant based on these definitions.
• Explain what cus­tomers can do if they find licens­ing gaps.

Look­ing for the lat­est updates on the top­ic of indi­rect access and SAP licens­ing? Vis­it ASUG­’s Licens­ing Resource Cen­ter.

Our Dis­claimer

If any infor­ma­tion described here con­flicts with what’s writ­ten in your con­tract with SAP, your con­tract always wins. SAP’s new pric­ing mod­el and the asso­ci­at­ed changes will only apply to new con­tracts — they do not change what’s in an exist­ing agree­ment. Please also be aware that these def­i­n­i­tions and descrip­tions apply to SAP ERP sys­tems only and not to SAP’s cloud-based applications.

Key SAP Licens­ing Def­i­n­i­tions to Know

What is Use? Use is use. All use must be licensed, regard­less of whether that license requires a fee. Any SAP process­es that you engage in your busi­ness must be licensed. If you cre­ate trans­ac­tions in SAP, that is use. This is how SAP pro­tects its intel­lec­tu­al prop­er­ty, just as any oth­er tech­nol­o­gy company.

This is SAP’s on-premise con­trac­tu­al def­i­n­i­tion of use: “’‘Use’ is defined as to acti­vate the pro­cess­ing capa­bil­i­ties of the soft­ware, load, exe­cute, access, employ the soft­ware, or dis­play infor­ma­tion result­ing from such capa­bil­i­ties. Use may occur by way of an inter­face deliv­ered with or as a part of the soft­ware, a licensee or third-par­ty inter­face, or anoth­er inter­me­di­ary sys­tem. All ​‘use’ of SAP soft­ware, regard­less of the method of access, requires an appro­pri­ate license.”

What is Direct Access (or Direct Use)? This describes the tra­di­tion­al way of licens­ing SAP prod­ucts by count­ing the num­ber of human users with hands on keyboards.

SAP calls this ​“direct human access” and defines it like this: ​“Direct Human Access occurs when humans log on to use the ERP sys­tem by way of an inter­face deliv­ered with or as a part of the ERP sys­tem. Direct Human Access is licensed based on users.”

What is Indi­rect Access (or Indi­rect Use)? This is every­thing else that does not qual­i­fy as hands on key­boards from human users. Think inter­faces, bots, EDIs, Inter­net of Things (IoT) net­works, and more. If data gets into SAP or a trans­ac­tion is cre­at­ed through a non-human action, this is con­sid­ered indi­rect access, also known as indi­rect use.

SAP defines indi­rect use as ​“when peo­ple or things use the Dig­i­tal Core with­out direct­ly log­ging into the system.”

What is Indi­rect Sta­t­ic Read? When data is export­ed out of SAP for use in down­stream busi­ness process­es in a batch-relat­ed way, whether through reports or data sent to third-par­ty sys­tems. Indi­rect sta­t­ic read is con­sid­ered use, but it is free of charge when done out of your ERP system.

What Indi­rect Sta­t­ic Read Is (and Isn’t): If you export your cus­tomer mas­ter data to ana­lyze in a spread­sheet or send on to anoth­er appli­ca­tion, that is con­sid­ered sta­t­ic read, with no asso­ci­at­ed charge.

One exam­ple of what indi­rect sta­t­ic read is not? Con­struct­ing a real-time inter­face that accepts a cus­tomer num­ber and returns cus­tomer information.

SAP does not require a license for indi­rect sta­t­ic read if it meets ALL of these criteria:

• The process was ini­ti­at­ed by an indi­vid­ual licensed to use the SAP ERP sys­tem from which the infor­ma­tion is being exported.
• It runs auto­mat­i­cal­ly on a sched­uled basis, and
• The use of such export­ed infor­ma­tion by the non-SAP sys­tems and/​or their users does NOT result in any updates to and/​or trig­ger any pro­cess­ing capa­bil­i­ties of the SAP ERP sys­tem.
  

How to Deter­mine Whether I’m in Com­pli­ance With SAP

1. Once place to start is to audit your con­tracts, look­ing into the prod­ucts you’ve licensed and the asso­ci­at­ed enti­tle­ments. You should know:

• The num­ber and types of your user licenses.
• What engines you have and what they enti­tle you to do.
• What oth­er license types you may have (for exam­ple, Sales Order Processing).

2. When you look at your enter­prise archi­tec­ture, ask your­self what has changed since your orig­i­nal SAP pur­chase. What con­tract amend­ments have you added over time? Has your busi­ness sub­stan­tial­ly changed since your license went into effect? (For exam­ple, has your sales vol­ume increased sub­stan­tial­ly, have you com­plet­ed any merg­ers or acqui­si­tions, or have you expand­ed a crit­i­cal area of your oper­a­tions such as pro­cure­ment? This may offer a clue that your licens­ing agree­ment could be out of sync with the real­i­ty of your day-to-day busi­ness operations.

As you inves­ti­gate this:

• Don’t assume that you are prop­er­ly licensed.
• Don’t assume that the project team did the nec­es­sary due dili­gence when they updat­ed the tech­nol­o­gy architecture.

These are some areas to look for poten­tial changes that could affect whether you’re in com­pli­ance with your licens­ing agreement:

• Inter­faces that con­nect with SAP and cre­ate transactions.
• eCom­merce func­tions, includ­ing order entry, inven­to­ry avail­abil­i­ty, etc.
• Third-par­ty appli­ca­tions that may be inte­grat­ed with your sys­tems, such as Work­day, Infor, or Salesforce.
• Inter­nal appli­ca­tions cre­at­ing trans­ac­tions that trig­ger SAP processes.
• IoT trans­ac­tions that cre­ate sales orders, ser­vice orders, or pur­chase orders.

3. It’s a good time to re-eval­u­ate your user licens­ing agree­ment to iden­ti­fy the user types you have avail­able and what they can do. How are these users get­ting access to SAP sys­tems? Are they using these sys­tems through ​“hands on key­boards,” or sit­ting behind an aggre­ga­tor application?

You can mea­sure the activ­i­ty lev­els that these user licens­es are sup­port­ing to make sure they are real­is­tic. For exam­ple, if you have 10 user licens­es in accounts receiv­able and you are pro­cess­ing a mil­lion accounts receiv­able trans­ac­tions each year, it’s pos­si­ble that your cur­rent use doesn’t align with your contract.

Clean­ing up your user lists can actu­al­ly deliv­er some effi­cien­cies. If you have a set of unused user licens­es, it may be pos­si­ble to exchange these for cred­it toward a new con­tract. If you choose to pur­sue this with SAP, make sure you have doc­u­men­ta­tion that sup­ports your calculations.

What Are My Options?

If you believe you are appro­pri­ate­ly licensed: Do your home­work and pre­pare suf­fi­cient sup­port­ing doc­u­men­ta­tion in case of an audit. SAP has made changes to the audit process to make it more trans­par­ent and fair for cus­tomers. Know your rights and take advan­tage of the oppor­tu­ni­ty to appeal the results of an audit if you don’t agree with them.

If you believe you have a licens­ing gap: You can stall and do noth­ing, but this will not work for­ev­er. You can buy more of what you cur­rent­ly license to close the gaps. Or you can eval­u­ate whether the new doc­u­ment-based licens­ing mod­el is a good fit for your business.

SAP’s New Doc­u­ment-Based Licens­ing Model

What is SAP’s doc­u­ment-based pric­ing mod­el? This new mod­el elim­i­nates the chal­lenges relat­ed to rec­on­cil­ing human users and indi­rect use. Rather than mea­sur­ing use by the num­ber of ​“hands on key­board” users, the new mod­el counts the total num­ber of doc­u­ments cre­at­ed through both direct and indi­rect meth­ods. These are the doc­u­ments cre­at­ed dur­ing sales, invoic­ing, and pur­chas­ing activ­i­ties, for example. 

The SAP dig­i­tal pric­ing mod­el cov­ers nine doc­u­ment types:

• Sales Doc­u­ment Line Item
• Invoice Doc­u­ment Line Item
• Pur­chase Doc­u­ment Line Item
• Ser­vice & Main­te­nance Document
• Man­u­fac­tur­ing Document
• Qual­i­ty Man­age­ment Document
• Time Man­age­ment Document
• Finan­cial Doc­u­ment Line Item
• Mate­r­i­al Doc­u­ment Line Item

What is not count­ed? Updates, reads, and deletes, as well as cas­cad­ing doc­u­ments cre­at­ed based on one doc­u­ment that is count­ed. (For exam­ple, a sales order doc­u­ment that gen­er­ates a num­ber of asso­ci­at­ed finan­cial account­ing documents.)

Pos­i­tive Changes to SAP’s Audit Practices

Based on the input of ASUG and oth­er user groups, SAP made sig­nif­i­cant orga­ni­za­tion­al and pol­i­cy changes to move all audit-relat­ed deci­sions and activ­i­ties to a sep­a­rate glob­al audit orga­ni­za­tion. The SAP team has put a lot of con­sci­en­tious thought into how the audit process can be more trans­par­ent and fair. We believe these changes will result in a much bet­ter expe­ri­ence for SAP customers.

Here’s what you should know about SAP’s sales and audit changes:

• There will no longer be any crossover between sales and audit functions.
• Sales is only respon­si­ble for sell­ing licens­es to customers.
• Audit is only respon­si­ble for mak­ing sure a customer’s con­sump­tion aligns with their contract.
• There are no more region­al audit and com­pli­ance teams, only one glob­al team.
• Cus­tomers can expect a trans­par­ent and con­sis­tent audit process.
• The scope of the audit will be spe­cif­ic and doc­u­ment­ed, includ­ing what the audit is not covering.
• Cus­tomers will receive a report with the audit findings.
• That report will include con­fir­ma­tion that the cus­tomer has com­plied, for future reference.
• Cus­tomers will have the right to make appeals, with the sup­port of a neu­tral third par­ty through the res­o­lu­tion process.

An impor­tant dis­tinc­tion between SAP audit types: SAP con­ducts two types of audits. The basic annu­al audit is con­duct­ed by cus­tomers them­selves and is not com­pre­hen­sive. Pass­ing this audit does not mean you are in full com­pli­ance. You can only know whether you’re in com­pli­ance if you under­go an enhanced audit, which is led by SAP.

How can you avoid an audit? Unfor­tu­nate­ly, all you can do today is be pre­pared for an audit, should you be select­ed. But in the future, SAP is work­ing on con­sump­tion dash­boards that will empow­er cus­tomers to self-mon­i­tor their sys­tems and arm you to address any com­pli­ance issues before they happen.

How ASUG Can Help With Licens­ing Questions

To start, you can vis­it our Licens­ing Resource Cen­ter for our lat­est cov­er­age of this topic.

Your com­ments, ques­tions, and obser­va­tions will help shape our con­ver­sa­tions as we con­tin­ue to engage with SAP on these top­ics. We need to hear your voice to con­tin­ue to make change.