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Collateral Damage from SAP Indirect Access Threats

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SAP licensing unknown situation

Recently we hear about large SAP accounts being accused of not paying license fees to SAP for accessing their system using third party applications. The most known example case is SAP vs. Diageo from February 2017 (click here), but more recently another case has made headlines. SAP is accusing brewing company Anheuser-Busch (click here) of similar practice. In SAP jargon this is called “Indirect Access” and we, at Xpandion started hearing about this from our customers around the world approximately 3 years ago. Being that we are a software vendor used for optimizing SAP licensing, we couldn’t ignore this issue therefore we created a special extension for Indirect Access so customers may assess their risk and know what they might face in case of an SAP audit.

However, there’s another aspect that almost no one seems to notice: the effect on some software areas around SAP, becoming totally stalled. Just recently, we heard about a case where SAP told its customers that wanted to purchase a B2B third party application that they will have to pay for additional SAP licenses for their vendors who access this application and use SAP data indirectly. We noticed that SAP is using this method to promote their own module due to recent competition from third party software vendors. Now, the price of the third party software is about 1/10 of SAP’s. The problem is that with an “unlimited” amount of vendors that need to connect to the software and the additional cost for a SAP license for each one, no customer is willing to gamble on buying this significantly cheaper third party software. Additionally, SAP is not willing to clearly state what the price should be for each external vendor that accesses the data, so estimating the final costs has become impossible. On the other hand, some customers are not willing to pay for SAP software – and so the result is a stalled market. This is a real problem because what should be a rapidly growing market is not evolving at all.

Another aspect is what the place of the SAP ISV partners is. ISV stands for “Independent Software Vendors” but as you can see from the story above, they are really dependent on SAP’s good will so, they are doomed to hard times if SAP sees fit. On this matter, old guys like me can remember the days of the “SAP Business Connector”, a program that was developed by webMethods. Up until 2002 it was sold by SAP until one day, surprisingly, SAP developed its own XI software and started to push it instead. I can remember webMethod’s salespeople hanging between customers on SAP TechEd trying to convince them that their product was still better than SAP’s, but unfortunately for them the battle was lost (to read the full story, click here). Recently SAP took a similar position with Oracle database, which is now replaced by SAP’s own database. Interested to know what the results will be?

These are just my observations from recent conversations I have had with customers, prospects and other software vendors. Among our products, we have developed software for optimizing SAP licenses (to read more, click here), but I’m personally very concerned about the effect the above will have on certain software vendors in the SAP environment in the next 2-3 years. How can they survive against SAP salespeople waving the flag of “additional indirect access costs”?

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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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