18 Oct 2017

The Truth About SAM Tools – Know This Before You Buy!

Written by James Cochlin – Principal Consultant and Consulting Director at JNC

Foreword: I work as an SAP License Management Consultant at some of the world’s largest SAP customers. The majority of those organizations are utilizing a SAM product, however in reality, some of these tools are redundant because they were poorly set-up, are lacking ownership, they are not measuring according to the customer contract, or simply put, not capable of measuring the customer’s environment.

Would I rely on a SAM Tool for SAP Licensing Compliancy?… No!

Sounds a little harsh but allow me to explain. I have and continue to work with numerous customers who have bought a SAM tool for SAP. They have set it up, and hey presto they think they are in control. Personally, I have a slightly different view based on my experiences and those of my clients. I would use a tool more as a radar, to provide license management intelligence to support decision making, however, I wouldn’t completely rely on it to ensure I am compliant. There is also the ongoing maintenance of your SAM tool updating any rules configured in the tool if you’re entitlement or the SAP landscape changes. Landscape changes affect what is being measured, and entitlement configurations affect what the measured usage is being compared to. Given the complexities of SAP licensing models, metrics and landscapes this challenge should not be underestimated.

A SAM tool will not fix your problems if you have any. It highlights them, therefore don’t underestimate any clean-up activities required once the tool is up and running. Otherwise, you’re still not compliant with your contract.


“Many SAP contracts are based on the authorization to use and most commercial SAM tools recommend license types based on actual use”


Also, beware of the authorizations vs usage licensing dimension. Many contracts are based on the authorization to use and most commercial SAM tools recommend license types based on actual use. In this instance acting on the outputs of your SAM tool measurements would create a significant non-compliancy issue, which could only be resolved by removing the authorizations to coincide with the new lower level license type assigned. Where SAP Role design is concerned this can open a significant and can of worms.

Is it possible to work without a tool? …Certainly

This depends on the entitlement help by any given customer. I have witnessed numerous contracts where the entitlement is very straightforward, to the point the customer only needs to control and monitor a limited set of attributes. In this case, a tool really isn’t necessary. Some customers have purchased a SAM tool where the tool is not benefiting the customer at all and therefore becomes redundant and unused.

The most important question to ask before asking “which tool”, is “do I need a tool”. An RFP process for a SAM tool should only be initiated on the basis of a strong and compelling business case providing the need with respect the estate and environment to be managed.

Look at The Entitlement First

Review your contracts, establish your entitlement and create your bill of material (BOM). Now you should have sufficient knowledge to determine what is required to measure your users and packages. Of course, seek advice from an SAP license management specialist to ensure you are not overlooking anything.

If you have a relatively “straightforward” entitlement, for example, a user heavy entitlement mix (users vs packages) made of Professional, Limited Professional and Employee Self-Service users it should be relatively straightforward. An understanding of definitions and the correct technical management processes should suffice. There are of course other considerations and complexities to factor in, which I will come to later.

Let’s Get Technical!

There is no better way of illustrating the point that a good practical example. The below table shows possible software use rights associated with, for example, and ESS License, and A Professional User License. All SAP contracts provide actual definitions for each license type more or less outlining what each license type allows a user to do in SAP.

Below is an illustration showing three SAP Users: John, Jane and Alan. I can identify that John can only use SAP for typical self-service activities, therefore, I only need an ESS self-service license type. Jane and Alan can do a lot more than self-service activities, so automatically I would classify them as SAP Professional Users. The question is, do I perform a periodical self-assessment without the aid of a SAM tool and perform the checks manually using Excel or utilize a custom report in ABAP or similar. In this particular scenario, I would utilize manual checks or possibly create an excel macro to manage this.

Let’s use Jane as an example. The tool should tell me that Ciaran needs a Professional license type however he could be optimized, he could potentially have an ESS license as the tool has leveraged statistical data from SAP and has identified that he only uses the same permissions as me, John. Of course, this doesn’t mean that I can change Jane’s license type. It means I need to perform some clean-up activities against John’s privileges. Once done, I can re-assign him an ESS license type. Remember, it’s not necessary what you have done in the SAP system, it’s what you can do that really determines the license type you should have.

As is the case with SAP standard audit tools your typical SAM Tool is not capable of interrogating SAP Authorizations to the extent that is can at all times inform you of what license type each user should be assigned in addition to the license type they could be assigned. Thus, following the outputs without managing the impact of that change can result in non-compliant licensing of SAP users.

Something else to consider is licensing roles within SAP, if user privileges are the base to determining what licenses need to be assigned to end users then it makes sense to allocate a license to a role so you can track what licenses are required considering day to day user role changes in the system.


“Your typical SAM tool is not capable of interrogating SAP Authorizations to the extent that it can determine what should be assigned in addition what could be assigned”


End of Technical Overload!

“I have a large and complex landscape without transparent roles. We have an issue with maintaining consistent user Id’s?”….

The above statement is again all too common. Utilizing a SAM tool should be your GPS system to navigate through uncharted territory and help you maintain control of the as-is. Again, many of the issues raised through the above statement can be overcome utilizing SAP standard reports and components such as a GRC solution.

Let’s face it, with the exception of the entitlements, all the data needed to identify who needs what license is data held within SAP itself. A SAM tool should help you and it should guide you but you need to test the results produced by the tool to avoid the “blind leading the blind” scenario.

Conclusion

Don’t just fall victim to the sales hype around SAM tools for SAP. Really challenge whether or not you need one and consider what tools and management processes you can implement yourself to stay on top of SAP licensing.

JNC support customers with SAM Tool selection and our consultants can help design SAP License Management Frameworks, which provide the roles and responsibilities, processes and procedures, tools and techniques required to effectively manage and stay on top of SAP Licensing.

 

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09 Oct 2017

5 signs you could be non-complaint with SAP Licensing

Indeed, there are many technical reasons why you could be non-compliant on SAP licensing. However, SAP licensing compliancy is as much to do with attitude and awareness as it is to do with knowledge and technical expertise.

There are many common misconceptions and assumptions that result in customers falling into a false sense of security and not taking the necessary precautions to protect themselves against licensing non-compliance. This article addresses the common predispositions that represent the biggest barriers to identifying risk and taking the necessary action with some tips at the end on how you can dig a little deeper.

1 – We have an excellent/special relationship with SAP…

An excellent relationship with SAP probably means you are spending money with them or at least they are still actively trying to court your organisation into buying more of the software products that you haven’t already bought! But what happens when your spending slows down, your SAP landscape stabilises or your ERP strategy changes? Maybe their position will change once your spending patterns change and you are no longer seen to be “aligned” with the strategic corporate product roadmap they would otherwise have you aligned to.

JNC has assisted many customers in this exact position angry and frustrated with an apparent change of tact by SAP and the way that non-compliancy claims suddenly arise. Some of SAP’s biggest global customer have fallen foul of non-compliancy to the tune of 10’s of millions. What happened to their special relationship? What makes you think that your “Special relationship” with is any more steadfast than theirs? If you are being told you have a “special relationship” and you are one of their “best customers”, just consider how many 1000’s have heard the same story. Always keep your software vendors at arms-length and don’t be lured into a false sense of security


“JNC have assisted many customers in this exact position angry and frustrated with an apparent change of tact by SAP”


2 – We deal directly with SAP for our licensing…

So does everyone, that is apart from those who buy through a third-party reseller, which itself probably leaves you vulnerable to even more risk. They get commissions and rebates from re-selling so the more you spend the more they make. SAP is the vendor so the majority of customers will deal directly with them via an account manager, but what difference does that make? All the more reason to think you are probably not getting the best deal if you are relying solely on the advice of the organisation selling you the product. There are numerous ways of getting a better deal and better value from your investment in SAP and this usually involves good vendor, supplier and procurement management, which means getting tough and not eating out of the palm of their hand.

JNC have observed some clients who have not been sold the right licensing in the first place, leading to future non-compliancy issues. Take sales and service order processing. JNC have seen a number of clients whose original system was designed to process sales and service orders, however, they weren’t sold the S&SOP Package license. These customers were charged many years later for this “under-licensing” despite having run SAP for years and despite submitting their LAW reports every year. Your sales exec is also very keen to make a sale so don’t rely on the vendors to have only your best interest at heart.


“JNC have observed some clients who have not been sold the right licensing in the first place, leading to future non-compliancy issues”


3 – We have been running SAP for years and have never had any issues…

This is potentially worse than if you had been notified of some minor issues along the way. At least then you would know where you stood and would be more mindful of the issue going forward. Otherwise, you could be non-compliant with no view of the extent of any issue and completely unaware of a hidden liability. If SAP has a positive account relationship to protect, i.e. a spending customer, they could allow non-compliancy to accrue without acting, as not to rock the apple-cart. From JNC’s experience there seems to be a lower limit to the value of SAP under-licensing claims so perhaps it has to reach a certain level before it becomes worthwhile.

Some of the biggest disputes that we have seen have hit customers who have been running SAP for 10, 15, 20 years who have used SAP for several years without any history of non-compliance. This could put you at greater risk. Has SAP issued you a certificate of compliance? Have they send you a letter or e-mail giving you a green light or clean bill of health following your annual measurement. Unlikely, and just because they haven’t said anything doesn’t mean there isn’t something there. So best you find out yourself where your business stands to protect yourself from large unexpected and unbudgeted costs creeping up and biting you.


“Some of the biggest disputes that we have seen have hit customers who have been running SAP for 10, 15, 20 years who have used SAP for several years without any history of non-compliance”


4 – We are running this and that SAM tool…

SAM tools certainly help make intelligence driven license management decisions, however software code is not intelligent by nature and I haven’t yet seen any AI SAM tools hit the market. JNC would certainly recommend some SAM tools for SAP as they can add value, however, we would never recommend relying completely on a SAM tool for SAP licensing compliancy. Human intelligence is always the key and always will be. SAM tools must be functionally capable, configured correctly and used correctly to be effective. SAM tools can’t adapt to complex contractual setups involving dozens of contract documents (i.e. they can’t just be fed in and uploaded) so SAM tools must be set-up and configured to measure against the actual license assets they have. Any what about the ever-changing license metrics and the varying written descriptions of any given license metric form contract to contract? Installing the software and getting it measuring your usage across complex data centre environments and systems landscapes also pose its challenges.

Once you do get set-up what happens when you buy more licenses and different types of licenses various complexities? What happens when SAP realise you have been using MySAP Business Suite licenses for use of SAP Business Objects when you should be using Business Analytics Expert Users licenses and they whip out the terms of use from 2005 and use them against you? What happens when you trade or terminate licenses form various agreements or agree on conversion credits for some of your perpetual license value towards cloud subscription licensing? How will you keep your SAM software up-to-date with what is invariably a moving feast? JNC have audited, and provided audit defence services, to several customers who were found to be significantly non-compliant despite running some of the best-known SAM solutions on the market. So, just because you have a SAM tool doesn’t mean you are compliant. To find out more about the strengths, weaknesses, Pros, and Cons of today’s top SAM tools you can read our article – The Truth About SAM Tools – which is dedicated to the topic and written by one of JNC’s leading consultants who has seen the effects of poorly chosen, implemented and managed SAM tools.


“JNC have audited, and provided audit defence services, to a number of customers who were found to be significantly non-compliant despite running some of the best-known SAM solutions on the market”


5 – Our support partner looks after our licensing for us…

Firstly, you may have lost control of your license management, putting blind faith in another organisation to get it right. Almost all of JNC’s customers (with licensing issues) have worked with a major SI or prominent SAP support partner and that didn’t prevent them falling non-compliant. We would gladly reference any particular provider who we observed bucking that trend but at present, there are none to speak of.

JNC have seen some serious cases of non-compliance where the partner has actually been culpable. We have even been in the middle of an audit simulation when serious levels of risk have been realized through poor administration as we were auditing, which didn’t go down well with anyone. So what assurances do you get from your support partner that your licensing is in order? What assurances do you have that they are right? The help of expert third-party support is always there for you if you want to know exactly where you stand. Assurance is a powerful thing.


“JNC have seen some serious cases of non-compliance where the partner has actually been culpable”


So, there you have it, some of the most common assumptions that prevent SAP organisations taking the necessary action to address SAP licensing and compliancy properly. Is your business guilty of any of these? Think hard about what factual evidence you actually have from properly qualified experts, demonstrating a compliant licensing position. If not you might want to think hard about getting specialist help with your SAP Licensing.

How to test your License Manager has their finger on the pulse…

Here are some questions you can ask your internal teams or support partner resources, and if you don’t get a straight, concise, and quantified answer then you could well have a problem.

What is our current entitlement utilisation as a % of our total SAP licensing entitlement?

Licensing entitlement units vary from metric to metric so the only consistent measure is value. So, if you have £5 million worth of SAP license assets a viable answer could be 80% meaning you are utilizing £4 million worth of your overall entitlement. For example, you may have 250,000 worth of GRC entitlement purchased on the revenue metric at 50,000 per billion. As your revenue is only 4 billion you are only utilizing 80% of your entitlement.

What is that figure split by named-user license and package licenses?

Just a further test of the above and how accurately they understand the licensing position in terms of the two license classes.

What is the value split between named-User and package licensing? Are we user or package heavy?

This really gives your business an indication of where to focus your attention. Managing a user heavy license estate and a package heavy license estate involve different processes, procedures, and techniques. Package and named-user licensing are completely different ways of licensing so software so it does make a difference.

Tell me the top assets nearing maximum utilization?

This is an indication that utilization levels are being monitored regularly. It is important to know when for example you have placed your 95,000th sales order when you hold entitlement for 100,000 sales orders. This is an indication you need to buy more otherwise you can fall non-complaint. If you fall non-compliant discount will be revoked and it can cost anywhere from 50% to 200% more to buy those licenses depending on the discount level that is revoked.

What is the split of our SAP package licensing between USMM Measurable, Self-Declaration business metric, and self-declaration technical (i.e. value derived from the system)?

This should be known as part of your measurement planning and a pre-requisite for a well organised, accurate and timely submission of your annual measurement.


These are all standard things that your licensing managers and administrator should know. They most certainly should if they are on top of things and if they are new they most certainly should be getting on top of them sooner rather than later.


Related Services:

SAP License Audit Simulation – Provides an accurate enterprise-wide view of your licensing compliancy position.

SAP Licensing Training – Contact JNC to speak to us about our training and competency development services.

 

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09 Oct 2017

SAP Licensing Compliancy and Vendor Audit Risk

Software License Audits are on the increase bringing unwanted business disruption and costly unbudgeted license fees. Can your business afford to be non-compliant?

Software vendors are increasingly resorting to licensing audits as a source of revenue with high fees being levied against the non-compliant use of their software. With SAP licensing models amongst the most complex and challenging to manage it is vital SAP end-users understand the main risk factors to ensure they are compliant and vendor audit ready.

In this article, JNC will draw on their extensive knowledge and experience of SAP license management, audit preparation and audit defence to highlight the key risk and issues around SAP licensing compliance and license audits.

SAP licensing compliance is certainly a high-profile issue. There is always plenty of noise in the media, and throughout the SAP end-user eco-system in general, regarding aggressive and costly license audits and high-profile court cases. This might be cause for concern for many SAP customers but do they fully understand the extent of the issue? Is it really enough to drive SAP customers to take action?

The fact of the matter is the problem is far more widespread than perceived. Only a few cases ever reach court with many more licensing disputes settled out of court before they make it that far. So in general SAP customer only see and hear is only the tip of the iceberg.


“The fact of the matter is the problem is far more widespread that perceived”


Why don’t we hear more about Licensing Disputes?

This is a product of how the vendor presents the dispute and what they do to achieve a settlement. From our experience SAP raise a dispute by presenting a headline figure, which is the maximum licensing fees they would be entitled to relate to the under-licensing detected and their interpretation of the customers SAP licensing contract. Typically, it comes unexpectedly from left field and is presented either as an order form with a deadline to sign or by way of a letter written to the finance director or another high-ranking company official. This creates a sense of concern and urgency and puts pressure on those responsible to resolve the issue.

When an offer is made to settle in a short time-frame for an amount significantly less than the “headline” figure, many firms sign on the dotted line as a quick and convenient way of avoiding prolonged business disruption and mitigating a potentially significantly higher cost. SAP much prefer a quick settlement over a difficult, time-consuming, resource-sapping and uncertain legal dispute. This can result, for argument’s sake, in the offer of a settlement for half to a third of the much more daunting “headline” figure.

As a consultancy, we tend too much busier around SAP’s end of quarter and end of the year. This is indicative of sales target shortfall and the vendor actively seeking revenue to hit sales targets.  Otherwise, there would be no such pattern to these events, which draws into question the integrity of the claims that are being made.


“This is indicative of the vendor actively seeking revenue to hit sales targets”


When JNC are called in to help customers in this potion we see the same pantomime played out time and time again. Thankfully our knowledge and experience of licensing and vendor tactics help customers get the bottom of their actual compliancy position paying significantly less and sometimes even nothing where compliant usage is successfully proven. Sadly, without expert help, most customers are not able to mount an effective defence to these scenarios and don’t have many alternative options.

Most firms also don’t like to broadcast non-compliance as it affects business reputation, stakeholder confidence and even share price. Most settlements are also made under strict NDA so the vendor holds just enough equilibrium to press ahead with this strategy without causing too many waves. Customers, therefore, feel they are in isolation whereas many other customers are in a very similar position.

In knowing, or having learned, how customers are likely to respond to this kind of tactics, could SAP be guilty of taking advantage? I’ll leave you to draw your own conclusions, however, If SAP customers were more aware of the hidden reality then licensing compliancy would probably rank much higher on the list of IT Director’s and CIO’s priorities.


“If SAP customers were more aware, licensing compliancy would probably rank much higher on the list of IT Director’s and CIO’s priorities”


So, how do licensing disputes to come about in the first place?

Typically, a licensing dispute arises from under-licensing detected as a result of an annual measurement or an SAP License Audit. Many SAP customers mistake their annual measurement with a license audit and it is important to understand they are two very different things as the risk is completely different. I have spoken to many SAP customers who claim they are fine with SAP licensing because they are audited every year. However, what they are referring to is the annual measurement, which is not comparable to a License Audit.

What’s the difference then, and what’s the impact?

Annual measurement is the process of reporting software usage data to SAP, where the customer is responsible for performing the measurement themselves. A License Audit is where SAP, either remotely or on-site, gather and analyse data themselves to determine a customer’s compliancy position. The issue is that LAW reporting provides very limited data to SAP, whereas a License Audit allows then to see much more of what is really going on the SAP systems. An example of the difference is that SAP standard audit tools USMM/LAW don’t interrogate user provisioning to determine what license type is required or to cross-check that the license type assigned is correct.

User provisioning is controlled by SAP Authorizations where a customer assigns authorizations to give users access to the transactions they need to be able to perform their job roles using the software. The customer must also assign each user a license type in each SAP system based on the level of authorizations they have. So USMM only reads what license has been assigned but doesn’t give any information on what license should have been assigned. If the licenses assigned match entitlements held the LAW report will not flag any issue. In an SAP License Audit, the auditors will interrogate this data and potentially discover that the license type assigned is non-compliant. So it is possible that licensing data submitted via LAW can hide the true picture. This is just one example of a number of risks which could lead to a costly SAP License Audit.

A practical example of this is where 1000 users are given limited professional licenses where they are authorized to carry out activity associated with full professional use. Where 1000 limited licenses are held and 1000 limited licensed users are measured there appears to be a match where in fact at list price this represents a circa €3 million risks. For discovered (versus disclosed) non-compliance SAP’s policy is to revoke discount, and are not obligated to trade for other unused assets. However, if you were to identify this shortfall position yourselves and notify SAP as such then you would be honouring what is described as their “Trust Model” where discount can be preserved and options of surplus asset trading can be explored. All the more reason to take action on licensing compliancy.


“Many SAP customers mistake their annual measurement with a license audit and it is important to understand they are two very different things”


Why are more companies not taking action?

SAP licensing compliancy is as much to do with attitude and awareness as it is to do with knowledge and Expertise. The purpose of this article, without documenting every risk and issue in detail, is to give Managers and Stakeholders more awareness about the potential risks of non-compliant software usage, inaccurate systems administration and measurement, and the ultimate risk of an SAP License Audit to help then decide if it’s in their interest to address the issue.


 JNC’s SAP License Audit Simulation

JNC’s SAP License Audit Simulation service replicates the processes and methodologies of a full SAP License Audit and provide organisations running SAP with an Enterprise-wide view of the licensing and compliancy position giving them the insight and intelligence they need to identify and deal with licensing and compliancy risk in a commercially optimal way and mitigating the risks of an on-site audit.

 JNC’s SAP License Audit Simulation Service Click to find out more

5 Signs You Could be Non-Compliant – Read the article

 

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10 Jan 2017

Perpetual vs Subscription Licensing for SAP

SAP offers two types of software licenses: perpetual and subscription-based. Currently, the perpetual type is the most used type. Over the years, I have seen the emergence of subscription-based licensing in the SAP domain as a more serious contender to the standard perpetual licensing model.

I have witnessed many Organisation begin to consider new subscription-based licensing as they seek to identify the most cost-effective and management friendly licensing model to suit their business.

The new licensing model drastically differs from the perpetual model. In-depth knowledge of both models is needed when strategic decisions need to be taken and when negotiations take place. But what exactly are the differences and how do you choose?

What is the difference?

A perpetual license is an entitlement for an unlimited period of time. With perpetual licenses, the bulk of the investment is made when purchasing the software. At that moment, the fee to acquire the license is paid and the software can be installed on an on-premise basis. Just to be clear: the software license does not include the right to use future releases of the licensed software. This because the perpetual license does not contain access to maintenance and support services. You’ll need a separate maintenance agreement to organize this.

Annual fees, based on a percentage of the value of the software, need to be paid to cover maintenance and support for the licensed software. So, after the initial investment, a yearly recurrent additional cost needs to be taken into account as well.

Key Points

The scope of the software license often covers only a subset of the capabilities of the actually delivered software. Licensees are only entitled to use those capabilities they have actually licensed.

It is very easy for usage of the software to exceed the functionality purchased if close attention is not paid to what has actually been purchased.

Subscription-based Model

So, what about the subscription-based model then? First of all: with this model, you only have the entitlement to use the software for a specific period of time. During this period, payment is done on a monthly basis. This payment allows you to use the software which is hosted at a remote location. Access to maintenance and support is included in the fee. You don’t need an additional maintenance and support agreement. Of course, since the entitlement is only valid for a specific period, licenses have to be renewed on a regular basis.

What are the advantages of the subscription-based model? Other than some generally well-known advantages (limited IT infrastructure etc.), the new model significantly lowers the barrier for new customers to get started with SAP software because of the low upfront capital cost. For existing customers, the new model gives them an option to transform their SAP licensing model from a capital expense to an operating expense model.

Moving Away From Perpetual Licenses

When moving from the perpetual to the subscription-based model, contract negotiation opportunities with both disappear and new ones arise. The conversion credit for old licenses is one of them. SAP used to give a credit when exchanging old software for newer products or when buying more of the same. Buyers will need to transform this well-known mechanism, which lowered the net price of the new investment, into fresh mechanisms applicable to the subscription-based model.

With perpetual licenses, contractual negotiations had to be done well but only once. Tailored terms and conditions, specific or long-term related clauses which needed to be negotiated only once, will now need to be negotiated whenever the entitlement comes to an end. Of course, also here, buyers will need to come up with the appropriate mechanisms to avoid this re-negotiation situation. It will be exciting to see how organisations will work this out together with SAP.


“When moving from the perpetual to the subscription-based model, contract negotiation opportunities with both disappear and new ones arise”


Key Points

Understand the details of both models. Good decisions are possible, only when you understand the details and consequences of each model.

Think strategically and long-term based. Depending on the situation you’re in, and the strategic decisions which were made, one model can be more favourable than the other.

Align your long-term strategy with the appropriate licensing model which may even be a mix of the two with models choosing specifically to the different products or solutions across the estate. Like HR based cloud solutions for example.

Be prepared the change your negotiation strategy when changing the licensing model. As discussed above, the two licensing models request different negotiation strategy. Prepare yourself before you start discussions.

Take Away Message

Understanding all facets of the two types of SAP software licenses is key. Both the perpetual and the subscription-based model have their advantages. Buyers need to prepare themselves and need to be wary. Speak to an actual SAP licensing specialist when (re-)negotiating agreements to make sure you get the best commercial deal and the best-fit licensing solution for your business.

 

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09 Jan 2017

Licensing SAP Mobile Solutions

A New access point, a new license?

SAP software licensing is based on two licensing components: package licenses and named user licenses. Package licenses give you the right to deploy and use the software. Named user licenses authorize an individual to access the licensed software.

But what happens when I would start using SAP mobile technology solutions?  In other words, I want to use standard SAP or custom built apps running on employee smartphones or mobile devices, which connect to the SAP system. What implication will this have on the licensing I need and which options do I have?


 “When deploying SAP Mobile products, additional licenses may be required”


So, how is it done?

Licensing mobile solutions is done on multiple levels. The first level is based on accessing the back-end data in (SAP) systems. Mobile apps read and or update data coming from (non) SAP systems. When data is read or transferred to or from a SAP system using a mobile application, users who indirectly access the system using the app will need a Named User license. This is, of course, only the case if the user who holds the device does not yet have an appropriate Named User license. If they do this license may also cover this usage as long as this is covered by the license type definition in the contract. If this is the case then no additional license would be required. If not and the usage of the mobile solution exceeds that covered by the existing license the user would need to be upgraded to a more expensive license type. Their previous license would then become available to be assigned a user who required it or reserved in the pool of available licenses. If their usage would now require a more expensive license type, one would need to be purchased as part of the next material procurement with SAP. It is possible to see how complex license management becomes and licensing mobile solutions provides additional complexities for license managers to consider

The second level is called the SAP Mobile Platform. This software is needed to build and deploy apps for iOS, Android, and Windows devices – as well as wearables and desktop apps. It allows you to customize pre-packaged mobile apps from SAP and its development partners. The Mobile Platform is also used for data integration across back-ends (SAP and non-SAP) and security administration. Furthermore, it allows you to deploy apps in the SAP Store. Different licensing and purchasing options are available for SAP Mobile Platform in its simplest form; Basic, Medium and Full Professional versions. You should choose the option which fits your needs. Licenses are to be paid for every person that will use the platform to manage and develop apps. The SAP Mobile Platform license is mandatory.

The third level is the mobile application itself. Here, everything is possible. You can simply buy apps from the SAP store, or develop your own apps on the Mobile Platform (if this functionality is licensed). For the apps you buy, you usually pay, per app, a license per user who will use the app.


“ licensing mobile solutions provides additional complexities for license managers to consider”


Key Points

Licenses for mobile applications need to be paid per user, not per device. Just to be clear: one user using a mobile app on a tablet and a smartphone just needs one license for that app.

The SAP Mobile Platform license is mandatory. Even if you choose to run a standard app from the SAP store, you’ll need a license for the Mobile Platform. Of course, in this case, the basic version of the Mobile Platform will do.

Deploying mobile apps entails multiple levels of licenses. Depending on the plans you have with mobile solutions and the situation you’re currently in, costs can become significant. The fact that every user who relates on data coming from a SAP system needs a Named User license in that system is an important point that needs to be taken into consideration when choosing the mobile route.


“Licenses for mobile applications need to be paid per user, not per device”


Indirect Access Risk

Is the implementation and use of mobile solutions a form of Indirect Access? Well, it could be. If the application has not been licensed then it can be deemed to be a third-party supply chain system either creating, manipulating, or viewing data in the SAP system. Due to the ring fencing of development within the SAP Mobile Platform, this is only likely if the mobile solution in question has been developed independently or out with the SAP Mobile Platform. It is important that careful consideration is made before deploying and form of application in any environment with your SAP system. To read our Indirect Access article click here

Take Away Message

Eventually, adding an additional point to access your business data besides of your existing desktop login possibilities will not change much in licensing perspective. Only the license for the Mobile Platform and the app itself are required. Those costs are relatively low and priced per user. On the other hand, if you’re bringing new users with your mobile strategy to the SAP domain, they all will need a Named User license as well. And according to what I have encoutered this can incresease the actual cost of deploying mobile solutions significantly and unexpectedly.

 

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19 Feb 2016

Licensing SAP Business Objects

Licensing SAP Business Objects BO BI

Understanding Your Options

How does SAP software licensing work again? Right: it is based on two licensing components: package licenses and named user licenses. SAP offers a down to earth, easy understandable licensing model for SAP Business Objects BO BI. No more CPU’s – bye bye cores! In general, if an individual uses SAP Business Objects BI (SAP BO BI) solutions in a display-only manner, a named user license is not required. In that case, only the package license is needed.

OK. Only a package license is required if display only is needed. But package licenses come with metrics. The package license for SAP BO BI is available through two metrics: “concurrent session” and “user”. These metrics are offered as options. You can decide which one (or both) to use.


“You have a certain flexibility when licensing SAP BO BI: you can choose the concurrent session metric, the user metric or a combination.”


SAP BO BI license types

When talking about SAP BO BI licensing, a referral is often made to a parking lot with two types of parking spaces: the ones with a license plate and the ones without.

Parking spaces with a license plate can be compared to “user” licenses. The parking space is assigned to one car and only the car with the identical license plate is allowed to park there. No other car can use the spot. The parking space for that particular car is available 24/7.

The other parking spaces (without license plate attached) can be freely used by all other visitors. Only one rule applies: if the car park is full, no new car can enter (and it has to wait outside until another car leaves). This is exactly the way “concurrent sessions” work.

Concurrent Sessions

Easy and down to earth comprehensible: concurrent session (CS) licensing limits the system to a fixed number of concurrent sessions. If administrators set-up 1000 users in the Central Management Console (CMC) with connection type “concurrent session” but the system is limited to 250 user logins at the same time (250 CS), the next CS user (251rst) that attempts to log in, will receive an error message. Auwch! You see, CS licenses do not guarantee access to a system. Of course, when a user logs off, another user is allowed to consume that license. When purchasing these licenses, you should estimate (based on historical data, if possible) the number of defined users that could log on to the system at the same time.

Three important remarks:

  1. One single user can consume multiple sessions if he uses multiple access points at the same time (like the BI Launchpad, BI Mobile or Live Office).
  2. CS licenses are specific to a single deployment. This means they can’t be shared across multiple deployments.
  3. Depending on when you purchased your SAP BO solution, you may not have access to CSS. In that case, you’ll need a conversion to the new licensing model that supports CSS.

“Concurrent session licenses do not guarantee access to a system.”


User Licenses

Within user licensing, each individual must be set up in the CMC to access the software with connection type “named user”. In this case, the individual is licensed. This type of licenses guarantees access. Just to be clear: individuals whose connection is covered by user licenses do not consume concurrent session licenses. User licenses are not specific to a single deployment. This means they can be shared across multiple deployments.

Needing more than display only?

All right. No problem: it can happen that some individuals require additional rights beyond display only (think about your administrators or query builders). In that case, SAP offers three named user licenses that may be licensed in addition to the package license:

“SAP Business Expert User”
“SAP Business Analytics Professional User”
“SAP Business Intelligence (BI) Limited User”

Take Away Message

Choose the most appropriate metric or a mixture of both. Divide your user group into users who would need 24/7 access and those who only need it frequently. Estimate, based on historical data, to determine the usage levels at any one moment. Define your needs carefully. Do not forget to check your license key! If you agree on a limited number of Concurrent Sessions and Users but your license key received from SAP says ‘unlimited’, you should operate by the contract, even if the system appears to allow you more. Do not over buy. You can always buy more, based on your ongoing assessment of usage and demand.

 

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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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