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SAP Licenses - How Many Different Types Do You Know?

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When you ask the average SAP customer or novice license consultant how many SAP license types they know of, they will probably answer “Professional,” “Limited Professional,” “Employee” and maybe even “ESS” (Employee Self Service). But these aren’t the only answers. And if you think they are, you might be severely limiting your leverage with SAP and your negotiating power. 

b2ap3 thumbnail iStock 000015728429XSmallHow Many Different SAP License Types Do You Know?

From our experience over the years working on numerous licensing projects, we have seen many, many types of licenses. In this post, we will try to shed some light on them.

The Various SAP License Types
The way we see it, SAP license types are divided into three main categories: 

  1. Licenses for combined SAP applications, 
  2. Licenses for individual, or separated, applications 
  3. External licenses for applications that were bought by SAP, but the license types remain as they were beforehand

Licenses for combined SAP applications
Most “classic” SAP customers fall into the first category. User licenses such as “Professional,” “Limited Professional” and “Employee” are defined as global licenses for a suite of products like SAP ERP, SAP CRM, SAP BI (Business Data Warehouse), SAP APO and more. These are employee-based licenses, meaning that the organization buys them for an employee and this employee can freely use multiple SAP products as long as the license type covers them. 

Licenses for individual, or separated, applications 
Some customers fall into the second category – those that need additional licenses to use a specific application. For example, if a customer has a lot of external employees that only use a portal, it would be a waste to buy global licenses for them. Instead, the organization will buy a license for the portal itself and give it to each employee.

External licenses for applications that were bought by SAP, but the license types remain as they were beforehand
The third category belongs to customers who were migrated to SAP after SAP had bought the company or application that they were using. This often happens with BusinessObjects customers, who before the acquisition hadn’t known anything about SAP. Additionally, and in some cases, current customers who want to buy applications that were recently purchased by SAP are also required to obey the migrated licenses until SAP includes them in its regular license types.

For a complete guide of the different SAP license types, refer to SAP’s official guide and read our articles on the topic, like SAP Licensing Quick Guide

“Special Tailored” License Types
Surprisingly, we have found some customers using specially created license types with names like “Manager,” “Top-User” and “Safety.” These license types were “invented” by the local SAP office and are not part of the official SAP license types. You can’t find definitions for them in SAP documentation and, if you have them in your organization, my advice is to check that they are clearly defined. An example of a good definition is something like: “The license ‘Top-User’ will be the license type of an employee who uses one of all the SAP systems above 10,000 dialog steps per month.” When the definition of a specially created license type is clear, nobody can argue with it and you can even buy more if your company is expanding and needs extra licenses.

Beware of Indirect Use
From the SAP System Measurement Guide, Version 7.0: “Named users are also upstream and intermediary technical systems that exchange information with the SAP software system, as well as the users of those systems, if the users exchange information with the SAP software in dialog or prompt mode. It makes no difference whether the software is accessed directly or indirectly.

What does this mean? Since 2013 SAP has been much more sensitive about indirect use and looks for it much more thoroughly during the SAP annual audit. You must identify indirect use and count it in your licensing quota. This is easy to do with software like ProfileTailor LicenseAuditor, which classifies each user who is indirectly accessing SAP to the right licensing type. 

Are You Allowed to Re-sell Unused Licenses?
This has been big news. In October of 2013, German court ruled that SAP cannot restrict software resale citing that their terms and conditions are anti-competitive. This will make big changes in the way people use their SAP licensing and overall licensing budget for obvious reasons. 

Negotiate Better
If you need to buy licenses from SAP, know that there are more license types beyond the common ones. Furthermore, remember that in certain cases your local SAP representative can tailor a special license for your situation. Don’t make the mistake of thinking that everything’s set beforehand or that you are locked into only buying brand new. 

Re-inspect & Optimize
If you are currently in or close to a licensing audit, you might want to re-inspect your inventory to find unsuitable license types. Remember that an unused license is a total waste, and unsuitable license types can result in extra expenses. Your licensing schema should fit your needs perfectly and support your business requirements and future plans.

Xpandion is the leading provider of license optimization software solutions for SAP. If you have any questions or concerns about your SAP licensing, contact us now.

Editor’s Note: This post was originally published in July 2013 and has been completely revamped and updated for accuracy and comprehensiveness.

Moshe Panzer is the founder and CEO of Xpandion. He has over 18 years' experience as a recognized SAP expert, having worked as a senior SAP & ERP consultant, project advisor, project leader and development manager for large private corporations worldwide. You can read more about Moshe on Xpandion's Management page.

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    Smithe504 26/04/2014

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