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SAP survey reveals licensing concerns

Thursday October 11 2012

Enterprise resource planning (ERP) customers want greater clarity and flexibility over software licensing

Enterprise resource planning (ERP) customers want greater clarity and flexibility over software licensing


Research released this week by the UK & Ireland SAP User Group has shown that 95% of SAP users believe that the company’s software licensing policy is overly complicated.


It also found that users want greater transparency when it comes to licensing costs, with 88% of respondents believing that SAP should make its price list public.


On the issue of complexity, many users admitted they found it difficult to establish which licences they needed through the lifecycle of their SAP software. This was due to some SAP software packages coming with multiple licences with different limits in usage rights. As such, 89% of users stated they would like SAP to reduce complexity by offering software that is only limited by one licence or usage metric.


In addition, over two-thirds (67%) of users stated that as SAP’s product catalogue has continued to expand they have found it increasingly difficult to keep track of licence usage, especially as certain SAP modules can be installed automatically. As a result they had found themselves paying for modules they weren’t even using.


Measuring maximum licence value


“In the current business climate many organisations are looking to ensure they are getting maximum value from their software licenses. This is an issue currently facing a lot of software vendors and their customers as many licence terms were agreed at a time when workforces were larger and the vast majority of deployments were on premise,” said Philip Adams, vice chairman of the UK & Ireland SAP User Group.


“SAP users are no different and these findings illustrate that they would like to see licence costs and conditions that are transparent and flexible. Encouragingly SAP has acknowledged these concerns and is starting to work with SUGEN [SAP User Group Executive Network] to engage on a topic that is clearly challenging for both parties.”


The research highlighted that customers also want greater flexibility. As staff numbers reduce and usage patterns change, organisations want to be able to reflect these changes in support costs so they only pay for what they are using. This led to 97% stating they should have the ability to ‘park’ unused licenses for support periods.


Extra module expense and complexity


Over three-quarters (77%) of respondents also said that they found the entry point too high when they were looking to deploy extra modules or functionality to their core SAP systems. For example, if they only wanted specific functionality for a small group of employees, but are still required to buy more licences than they actually need.


The changing IT landscape is also having an impact on the complexity of software licensing. With more organisations working with outsourcers and external services providers, and more end users being exposed to systems, the majority of users believed that SAP needs to change its current ‘named use’ licensing model. Over three quarters (78%) believed that SAP needs a concurrent use pricing model for the external usage of SAP software/data by end customers.


Research last year also revealed that 80% of User Group members expected their SAP implementations to be a mixture of on-premise, on-demand and on-device services. However, this latest research revealed that the majority (97%) of users don’t believe that SAP has effectively explained the migration path of moving from on-premise to its mobile or cloud offerings and how this impacts on their existing licensing agreements.


Call for greater clarity


“It is clear that there needs to be greater clarity from SAP regarding licensing, much of which stems from a need for improved customer communication,” added Adams. “For instance, more than half of users don’t understand the difference between what SAP defines as a Professional and a Limited Professional User.


"We will be looking to work quite closely with SAP in the UK in the coming months to ensure this happens, and, of course, licensing will no doubt be a big theme at this year’s User Group Conference. Ultimately it should be in SAP’s and its users’ best interests to make licensing as transparent, simple and flexible as possible.”


Tim Noble, managing director of SAP UK and Ireland, acknowledged the results of this survey and said the company was continuing to address some of the perceived complexities around SAP’s software licensing through a number of measures. “These include standardising our terms and conditions globally so that the same licensing terms apply, no matter which country our customers reside, as well as publishing our software rights online for all SAP products and services – including the full Sybase suite,” he said.


“We’ve also spent a significant amount of time on simplifying the buying process so that it’s easy to understand, as well as ensuring implementation of SAP’s products and services are tailored to meet our customers’ individual and specific needs. Our ultimate goal is to make our user’s experiences of software licensing as efficient as possible and we will continue to focus on this.”


The survey questioned 336 SAP users spanning 150 SAP user organisations in the UK & Ireland.