01 Mar 2016

SAP Named User Measurement Explained

What does USMM tell me about named user licensing?

Put very simply USMM is SAP’s measurement program and it lists the users, their licence type, and chargeable objects for each engine on the system.  It must be run on each system individually. In this blog I’ll focus on users, or more to point named users.

Named users are the people in your organization who use SAP and thus need a licence.  The LAW tool is then used to consolidate the USMM reports and report the highest licence type per user to SAP. SAP uses this data to determine if you have enough entitlement to cover your licensing requirements, a.k.a a license audit and will use it to determine if you owe them licensing fees for unlicensed or non-compliant usage.

 “If a user is using multiple systems the one where they have the highest access rights and permissions will take precedence for determining what named-user license they require”

What USMM isn’t

Although a user’s licence type should reflect their capability in the system and be in line with your contract; USMM will not automatically reflect changes made to a user’s roles or authorisations.

USMM isn’t what you might call an intelligent auditing tool. There is no dynamic link between a user’s capability and their licence type. A user’s licence type is a static piece of data in the system much like their name. The license type assigned to a user must be maintained by the customer.  Good system administration will update a user’s licence type periodically to reflect their current capabilities, but often it is a process which falls between the cracks.

 “A user’s licence type is a static piece of data in the system much like their name. There is no dynamic link between a user’s capability and their licence type.”

Over the years, I have encountered multiple clients confidence their licensing position was compliant, left utterly confused and bemused by what USMM has told them. Had they run USMM and LAW reports, and not reviewed them before sending them to SAP they would have non-compliant as a direct result of not accurately reporting their system usage to SAP. This inaccurate reporting is a direct result of incorrectly configuring user capabilities to match their role, either in the first instance or because of change, and not properly understanding what USMM is counting and how which would have prompted them to properly manage their user license allocations.

A few recurring USMM issues

  1. Users locked but not expired.
  2. Users having multiple ID’s and therefore being counted by USMM multiple times.
  3. Licence type never populated or poorly maintained.
  4. Little or no licence optimisation over the preceding years.

With little help items 1, 2 and 3 can quickly be resolved and with a bit more detailed work and analysis item 4 can be addressed too such that USMM accurately reflects system usage.

“Over the years, I have encountered multiple clients confident their licensing position was compliant, left utterly confused and bemused by what USMM has told them”

USMM Reporting Risk

As a result of the points discussed above running USMM on your SAP systems and sending this data to SAP can carry significant risk. Simply running USMM, consolidating via LAW and submitting this information is, in essence, carrying out a blind audit. Without knowing if the information is an accurate reflection of how your estate should be licences nor the potential implications of the submission you could be shooting yourself in the foot in a big way.

What SAP receive via LAW and USMM is a direct result of the information that you enter or configure into the SAP system. This is why when JNC carry out an SAP License Audit Simulation we can typically improve the potential outcome of a license audit by measuring the as-is compliancy position, followed by carrying out a programme of remediation in terms of the current as-is configuration. We can then carry out License Optimisation to identify the most cost effective to-be licensing position based on usage and discover what licensing you should actually have in place. This level of accuracy put the customer back in control of licensing and gives them something to work towards when negotiating licensing post-audit or when making any new procurements for licensing.

“We submit LAW every year and haven’t had any issues”

If you are not in control of what USMM is counting and what you are reporting to SAP, then you will not be aware of what information SAP are accruing behind the scenes. It is perfectly plausible that SAP note some level of non-compliancy but do not act on it at the time of discovery, and not doing so does not limit them from doing so in the future either. Perhaps you are a buying customer who is currently on a strong trajectory of growth. Why upset the apple cart? Non-compliancy can be a significant cause for discontent between a customer and SAP so there may be account management or business strategic reasons why non-compliancy is not immediately highlighted. Furthermore, if SAP needs to call in the Global License Audit Services (GLAS) team then they need a reasonable internal business case to justify the effort and resource consumption. Why instruct GLAS to audit if there is not much to find?

I have worked with many global scale organisations with 10’s of thousands of users and these issues can amount to 10’s of millions in non-compliancy. By executing the remediation and license optimisation measures alluded to above JNC have successfully reduced the demand captured by USMM/LAW or indeed an on-site audit by up to 90%. You can do the maths! So, if you are using USMM to determine your own compliance position by rationalising it against your entitlement how can you be sure that USMM is giving you (or SAP) an accurate picture of what needs to be licensed and how?

The issues discussed result in clients paying too much for licensing compared to their usage and actual needs. Managing an accurate licensing position may result in having enough surplus to cover next year’s demand or for that new deployment, which based on your current licensing position you would need to purchase.

Let’s summarize some key points

  1. Understand what USMM does and doesn’t report
  2. Periodically maintain the user licence type on your systems
  3. With the help of an expert, there are some simple exercises which can ensure USMM more accurately reflects system usage

Take Away Message

With regards to named users, USMM simply counts users and their licence type. The Licence type allocated in the system is static data and is not dynamically linked to the roles or authorisations set or if they are changed. Sense check your USMM and LAW results before sending them off as results may not reflect your actual usage and more likely to return a higher demand for licensing than is necessary.

If you have any questions or concerns speak to an actual SAP licensing specialist and have them perform an independent check to ensure that all results are correct. It might just save you a small fortune!


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18 Feb 2016

SAP Engines and Package Licenses Explained

First of all, what are Package Licenses and Engine Metrics?

Alongside named user licences, package licences also make up part of your contract. Package licences allow you to use the software functionality you bought where the price you pay is based on a metric. Metrics are typically offered on a tiered pricing model meaning the more you buy the cheaper each unit of entitlement is.

For example, if you bought SAP Invoice Management, the metric could be invoiced, sold in blocks of 1,000 units. If you bought 500 blocks of entitlement, you have the right to process 500,000 invoices per year. If the price per invoice was 0.25, and each 1000 unit block 250, the business would need to pay 125,000 for the software. Their entitlement to use the software would therafter be limited to operating within the 500,000 invoices worth of entitlement purchased. If they significantly under-used against this metric they would be holding surplus entitlement, either excess surplus or manageable surplus which may be adequate to cover future operating growth. Processing any more than 500,000 invoices per year would be over-use, or unlicensed use, of the SAP Invoice Management engine, and would require the purchase of additional entitlement.

The catch is that if SAP detect non-compliant usage they will charge the full list price so you may lose anywhere from 30-70% discount and instead of paying 0.25 per invoice the price will be 0.50. Suddenly an additional 100,000 invoices worth of entitlement ends up costing you 50,000 instead of 25,000 a.k.a double the price. If they detect you have been operating non-copmliantly for any period of time they could also add back-dated maintenance to refelct the maintenance you should have been paying given that previous maintenance actually paid would have been calculated against a lower SAV (SAP Application Value).

A pretty basic example but understanding which metrics apply will affect accurate engines measurement and any internal processes you have to manage usage of the software within the boundaries of your entitlement.

“Metrics reflect the intended use of the software”

So far, so simple, but I’ve seen lots of clients get confused with other metrics.

Where I’ve Seen the Confusion

A common mistake I’ve seen with metrics is the difference between users and employees. Remember metrics are supposed to reflect the intended use of the software so number of employees may be a more appropriate metric than users, regardless of whether all employees accesses the functionality. Fail to understand these nuances and you can quickly get into trouble.

Other times I’ve worked with clients who understand their metrics, but changes to their infrastructure have caused them issues. For example, the metric could be CPUs or cores on the server. At the time of signing contracts clients are typically compliant. Roll on a few years however and, unbeknownst to the contract or reporting manager, the server might have been upgraded CPUs added and all of sudden there is an issue.

I’ve also seen system setup cause client’s issues. Business Objects can have concurrent sessions as it’s metric. So, it’s reasonable to assume the system will be set up so that the number of concurrent sessions allowed will not be exceeded, but this is not always the case.

Metrics can also change over time if SAP and the customer group decide another metric reflects the intended use in a better way. Your contract is your contract though and whatever it contains is the metric used for licensing.

“Metrics can also change over time if SAP and the customer group decide another metric reflects the intended use in a better way”

A Summary of the Key Points

  1. Metrics reflect the intended use of the software
  2. Metrics can change, but your contract is the metric used for licensing.
  3. Metrics are more nuanced than named users and misunderstanding of them or changes to your infrastructure can affect your licensing position.

Take Away Message

It is crucial to understand your contracts, package licenses and metrics. A misstep or oversight can have costly ramifications. SAP licensing specialists can review your contracts and give you an independent assessment of your licensing position. When you have changes to how you use your software, your system or your infrastructure consider whether it will affect your package licences. If you have any questions or concerns speak to a qualified SAP licensing specialist who can review your contracts and give you an independent assessment of your licensing position.


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