SAP restrictive practices rile customers. CCL files complaint with Competition and Markets Authority
16 March 2017
6 minute read
This article captures the main discussion points and actions from two Special Interest Group (SIG) meetings regarding SAP Licensing.
As a result of the conference calls I have, on behalf of The Campaign for Clear Licensing (CCL) logged a complaint with the Competition and Markets Authority (CMA) in the UK regarding SAP Licensing and audit behaviour. A follow up SIG call will be scheduled in the next few weeks.
Special Interest Group Format
- Original request for participants here: https://itassetmanagement.net/2017/01/27/sap-sig/
- Conference calls held on Wednesday 22nd (USA participants) and Thursday 23rd (EMEA)
- End users only from The ITAM Review audience (Anonymous as per Chatham House Rule)
SAP Special Interest Group (SIG) Minutes:
SAP customers simply want clarity
Salient Discussion Points
- Diageo losing the high court ruling on indirect access was a major concern (see “Drinks company Diageo lose battle with SAP, indirect access continues to wreak havoc). There was general surprise that SAP would initiate proceedings with such a large customer (£10BN Global drinks brand and owner of Smirnoff, Guinness, Johnnie Walker, Gordon’s, Baileys, Captain Morgan….) and that the terms of named users still remain unclear.
- A general observation of the ITAM market is that even very experienced IT Asset Managers may not have direct experience managing SAP, since if the company has invested in SAP, it is usually managed by a dedicated SAP team.
- Results from a poll of Special Interest Group members suggested Indirect Access was of most concern (31.9%), followed by general interest in SAP licensing (25.5%), measurement of SAP metrics (19.1%), defence of SAP audits (14.9%) and cloud / HANA (8.5%) (source).
- The spirit of the SIG discussions, as with most conversations with ITAM folks, is that people don’t mind paying the money, and fully respect Intellectual Property, they just want clarity so they can measure consumption and do their job. SAP is vague in their language; customers want clarity so they can play fairly by the rules.
- There was a general interest in what other companies are doing to avoid indirect access risk – how was indirect access structured and was this agreed by SAP?
- One SAP customer shared that they had negotiated out the ability for SAP to claim indirect usage breaches at a later date.
- More experienced IT Asset Managers with SAP experience suggested defining the user types and data flows within the contract for clarity.
- SIG participants suggested that indirect claims were predatory, and that spending money with SAP made spurious indirect access claims go away. Spend money, or buy strategic growth products important to SAP such as HANA. One SIG member quoted their SAP account manager who said “wouldn’t it be easier just to settle with us and pay than to go to court”. Tantamount to BLACKMAIL.
- SIG participants questioned why SAP would want to clarify indirect access, since it such a cash cow and they greyness in license terms allows them to drive their commercial agenda. The standard response from SAP to licensing ambiguity is “Come and talk to us”. Yet SIG members stated that SAP was the last place they would ask for clarity, since that would initiate an audit or sales enquiry. “[SAP] That would be the last place we go for licensing information” “[I’m] very paranoid about approaching them” This is akin to trying to find a competitive quote for new tires for your car, but having to go back to your old tire supplier to work out how to get the wheel nuts off. It is a RESTRICTIVE and UNCOMPETITIVE. In the case of Diageo, they were trying to explore an alternative system using Salesforce.com, which free competitive markets should allow them to do.
- The general consensus from SIG participants was that, whilst Diageo was not a landmark legal case, it would give SAP enough ammunition to give their customers the heebie-jeebies. “SAP will be after everyone” stated one SIG member.
- Customers are using SAP beyond what could be imagined when the contracts were created (Mobile, Internet, Virtualization, Ecommerce etc.) and SAP’s archaic contracts and manipulative approach to licensing is LIMITING INNOVATION.
- It was noted that whilst many SAM tools claim to offer SAP License Management solutions, consultants with hands-on expertise are like hens teeth.
SAP User Groups Also Unhappy
Prior to the conference calls I was approached by Rob van der Marck of VNSG, the Dutch SAP user group. Rob is project manager of a work stream to specifically investigate Indirect Access and SAP audits. Rob, quoted in Computer Weekly, says, “For the user groups, indirect usage has been an issue we want to discuss with SAP”. My experience with other user groups and the Campaign for Clear Licensing (CCL) suggests that user groups are either too closely personally invested in the vendor they support or don’t want to bite the hand that feeds. The outcome and deadline for Rob’s project is also not known. I hope that the user group can convince SAP to pull their finger out.
In a nutshell – what do SAP customers want? CLARITY.
- A follow up Special Interest Group call will follow in the next few weeks. Two SIG participants have agreed to share their Indirect access setup for the anonymous critique of other participants, another SIG member has agreed to share their approach to managing audit requests internally from SAP and others.
- In addition, The ITAM Review will be launching a free public wiki soon to allow our licensing guides to remain current (See SAP Licensing Quick Guide)
- The Campaign for Clear Licensing (CCL) has written to the Competition and Markets Authority – stating that SAP’s practices are UNCOMPETITIVE and RESTRICTIVE. In light of the recent Diageo ruling, they also represent a significant financial risk to UK businesses.
Stay tuned to The ITAM Review newsletter for an invitation to the next call and further updates. All SIG updates here.
Any questions – please shout. Thanks, Martin