Putting Customer Empathy to Action; SAP Attempts to Modernize Pricing

Bill McDermott, during his keynote at the recently held SAPPHIRE NOW 2017, brought an end to the ongoing ambiguity around indirect access to SAP.

Bill McDermott speaking at his Sapphire Now 2017 keynote session.

In SAP’s parlance, Indirect Access of SAP happens when a third-party application users create, manipulate and or read SAP data. Technically speaking, any interaction between a third-party system and SAP via the SAP’s remote communications protocol RFC (Remote function call) is termed Indirect access.

SAP took some of its big customers to court over the Indirect access and decisions were made in favor of SAP. This had led to a lot of anxiety among SAP customers in the recent past. Naturally, some SAP customers had questions but were not willing to reach out to SAP due to the fear of inviting audits after their disclosures.

Updates about Indirect Access from SAPPHIRE 2017
BW BusinessWorld contacted SAP India to reconfirm the exact details shared by Bill McDermott during his keynote at SAPPHIRE 2017.

Deb Deep Sengupta, president and MD, SAP Indian Subcontinent, said: “SAP is modernizing our pricing with the tremendous support of our User Groups. We have taken the following steps on indirect access: transitioned to an order-based pricing metric for order-to-cash and procure-to-pay scenarios, and inclusion of static read access from third-party systems in the underlying software licenses.

"Approximately 80 percent of ERP customers will benefit from the changes to these three scenarios. We will continue to address additional scenarios, including IoT.”

SAP will continue to charge customers for Indirect access but the charges for the same would be more transparent and outcome based. Till then SAP Customers can reach out to their SAP account managers to know the exact method and slabs if any for deriving the customer liability.

This is a shift from the earlier license metric “application named user” and hopefully would significantly reduce the licensing burden on SAP customers. Another significant announcement is that Indirect Static Read is now free.

What is Indirect Static Read?
Extracting data out of SAP system and subsequently allowing third party systems to access that data is an Indirect Static read scenario per SAP.

Hala Zeine, SAP Corporate development officer, in her SAP featured communique wrote “Indirect Static Read will now be included in the underlying software license – i.e., free of additional charge when a customer is otherwise properly licensed.

"Indirect static read access reinforces that a customer’s data is yours. Just because the data was in the SAP system, does not mean you should pay to view it when it is outside the SAP system. Indirect static read is read-only that is not related to a real-time system inquiry or request and requires no processing or computing in SAP system."

This is big relief to SAP customers that would want to try third party analytics tools to analyze their SAP data. While there has a been a significant demand to integrated systems of record, one category notably is the Enterprise Performance management tools. A lot of SAP customers have eventually implemented third party EPM tools and this announcement hopefully brings a cheer to them as their current investments remain unaffected.

SAP calls for proactive disclosures from customers
SAP also wants its customer to be more proactive in reaching out to them with queries on pricing & licensing. There is clearly no action on customers that are “properly licensed” according to SAP.

Hopefully, SAP will modernize its licensing and pricing very soon bring greater transparency allowing customers to feel objectively safe confident about their licensed assets. Under-licensed SAP customers hopefully will get incentives to make those disclosures.

It will be little more to expect that all scenarios and issues around Indirect access have been addressed. There is clearly much to do on part of SAP and its customers. Overall, it’s a step in the right direction to modernize and bring about price transparency.

SAP has truly shown leadership to the enterprise IT world by setting a good precedent on Indirect access in a hugely interconnected and microservices enabled world with humans communicating with each other through REST calls and JSONs through M2M (machine to machine) system interfaces. It’s fair to expect third-party application users to be licensed users whenever they access the SAP system.

Also, SAP, through this precedent also confirmed the primitiveness of “anonymous” access in a connected world of tomorrow.

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