A recent SAP Users Group survey found that 95% of SAP users think that the company’s software licensing is ‘overly complicated’ as discussed in the ComputerWorldUK article. The survey was conducted by the UK & Ireland User Group and questioned 336 SAP users across 150 organizations. The article goes on to say that “89 per cent of users would like to see SAP offer software that is only limited by one license or usage metric.”
Philip Adams, vice chairman of the UK & Ireland SAP User Group, is quoted as saying—“I would say licensing is a top five priority for our users at the moment. I am hearing lots of noises [from SAP], but am seeing very little action.”
It’s understandable that SAP users are concerned about SAP software licensing. As discussed in our Webinar: SAP Software Licenses Could be Costing You, there are two main SAP license models: Named User and Package (aka Engine) licenses. In the Named User case, there are many different categories or classifications of users—from Developers and Professional Users to Employee Self Service and Test users. Users are categorized based on their working roles and features of the SAP software that they are permitted to use. In most organizations this is a manual process, not based on actual usage of the system. It’s often difficult for the SAP administrator to determine the most appropriate license type for a given user, so it’s a ‘best guess’ approach.
The result is that in some cases the user is under-licensed—for example, they need a Developer license but have only a Limited Professional license. This situation represents a license liability at true-up time and can result in an unbudgeted expense. But in many cases, the opposite problem occurs—the user is over-licensed, meaning that they have a higher level license than they really need, based on how they actually use the SAP software. In many companies that we work with, we find that there are far too many Professional and Limited Professional user licenses deployed when a lower cost Employee or Employee Self Service license would suffice for those users. By restructuring their license classification mix, organizations can avoid new license purchases for the more expensive licenses as they expand their use of the system, realizing significant cost savings.
The solution to the Named User licensing challenge is to use tools that automatically track and analyze SAP usage for each user. SAP license optimization tools can recommend the lowest cost license that meets the needs of the user.
By comparison, Package licenses are much more difficult to optimize and most organizations fall back to a combination of manual research and running SAP system measurements at true-up time to determine their package license consumption.
Tracking the license consumption of SAP packages is a daunting task. The challenges include:
• Range of business metrics and calculations
• Measurement techniques
Yet package licenses are an ever expanding part of the SAP licensing model. Cloud (On-Demand solutions), Mobility (On-Device solutions) and In-Memory Computing (HANA), all key areas of innovation and future growth for SAP, each require package licenses. We will delve further into package licensing in a future blog article.
Readers may also be interested in viewing our on-demand Webinar: Lifting the Lid on SAP Licensing. SAP uses a combination of user based licensing and Package (or engine) licensing for its products. This Webinar will discuss strategies for gaining control of your SAP licensing to optimize costs, maintain compliance and better forecast future needs for SAP software.