[Updated 11/22/17 – We recently launched our ultimate guide on SAP Indirect Access which can be seen here]
Indirect access, indirect access, indirect access…
That’s not bad editing. That’s what my world feels like. It seems as if all I’ve been hearing lately is SAP Indirect Access. It’s all SAP Indirect Access all the time.
Diageo loses a lawsuit citing SAP Indirect Access license violations. inBev gets sued for SAP Indirect Access licensing violations. Clients have shut down all SAP ERP innovation and extension projects because of the threat of SAP Indirect Access licensing actions. SAP clients are being audited, and hefty fees are being threatened, in the name of SAP Indirect Access licensing. In one case, one of my clients has even decided to migrate off of SAP entirely.
That’s mind boggling!
For those not in the know, or who have been lucky enough to be able to occupy themselves with more productive matters, you may be wondering what the SAP Indirect Access Licensing issue is all about anyway.
Simply put, SAP wants you to buy (and the UK courts in SAP v Diageo agree) a named user license for every single user that accesses SAP ERP regardless of whether they access it directly via a dialogue user like SAP GUI or via third party programs and interfaces…aka, indirect access.
The issue is that SAP named user licenses can be pretty expensive ($1K – $5K per user plus 22% annual maintenance), and if you’re as successful as you hope to be with your SAP eCommerce deployment, you may get a lot of users (1K-100K users) using it. The SAP Indirect Access licensing math looks like this:
“pretty expensive” X “a lot of users” = prohibitively expensive SAP license fees
That, dear reader, is the crux of the matter.
I’ve been in the SAP eCommerce business for close to 20 years. While the concept of SAP Indirect Access has been around since day 1, I can count on one hand how many times it became a factor in an account situation. SAP has historically always entered into a win-win negotiation with their clients and negotiated a mutually beneficial licensing deal.
No fuss, no muss.
Things are drastically different in 2017.
Thanks to SAP’s recent foray into the world of “sue your client to accelerate top line revenue growth”, SAP Indirect Access has become part and parcel in practically every client meeting that I have. In fact, and this is the straw that broke this camel’s back, this week SAP Indirect Access came up during a first introductory meeting with a new prospective client. Not only did it come up in the first meeting, but it was broached within the first 15 minutes of our very first conversation…THE FIRST 15 MINUTES!!!… the topic of SAP Indirect Access comes up.
Before we even got to talk about this Medical Device manufacturer’s business, and what they wanted to accomplish with their SAP Integrated eCommerce initiative, they wanted to know, if thanks to SAP’s recent Indirect Access licensing actions, they should even be having this conversation right now. I never even got to the point in the conversation where I normally dazzle CIOs with all the functionality and value that I could provide in 1/4 the time and cost of SAP hybris! :-). That really pissed me off!
I did advise them what to do next and we will definitely be having that second conversation shortly.
I feel like I’m living in an alternate universe.
Everything that I’ve ever learned about business seems to be turned on its head.
Instead of partnering with your supplier, you fear them.
Instead of talking about possibilities, you talk about consequences.
Instead of fostering innovation, you suppress it.
Instead of competing on value, you extort based on circumstances.
Instead of an open free dialogue, you operate under the cloak of secrecy.
This is what life behind the iron curtain must have felt like.
This used to be a topic that I really didn’t want to talk about. It isn’t my issue. It has nothing to do with my technology or my relationship with my clients. This is all about the contract that our clients negotiate with SAP and that’s between our clients and SAP. My only concern has always been to focus on providing real value to our clients and all of that SAP contracting stuff would work itself out.
Not any more.
This is my issue because it is my clients’ issue. Any issue that prevents my clients from taking full advantage of all of the value that I can provide them is my issue. While I can’t negotiate their contracts for them, I can provide them with information and resources that can help them deal with the issues. That is my intent in the coming days. I will use my network and resources to illuminate this SAP Indirect Access topic.
To begin with, the one thing that I’ve learned since I’ve started to immerse myself in this topic is that while on the surface the SAP Indirect Access issue is quite simple…SAP has a right to charge for using their Intellectual Property and clients have a right to negotiate for it’s fair use…in practice it is quite complicated.
Over the course of the next several weeks I’ll try and simplify things for you. I’ll organize the relevant background reading for you if you want to get caught up to speed quickly. I’ll catalog some of the leading analysts, technology providers and yes, even steer you to lawyers who seem to be thought leaders on this topic. I’m becoming the reluctant expert and clearinghouse for all things SAP Indirect Access and will be happy to share all of my findings with you.
In the end, I have no doubt that this topic will settle down. It has already starting to with Bill McDermott’s Sapphire proclamation of promising to morph SAP into a more “empathetic” company and with Hala Zein’s blog post on SAP’s website entitled “Modern Pricing for Modern Times“.
The story is unfolding and I’m going to be covering it…if not contributing to it.
Drop me a line if you want to confidentially share your story. I’d love to hear from you.
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