SAP revamps Digital Access licensing policy prices

Driven by unprecedented collaboration with user groups, customers, partners and industry analysts, SAP recently announced a new sales, audit and pricing model for its Digital Access licensing policies commonly known as “Indirect Access.”

The new approach, a first of its kind developed in consultation with user groups, makes it easier and more transparent for customers to use and pay for SAP software licenses. It also differentiates between Direct/Human and Indirect/Digital Access, while clarifying the rules of engagement for licensing, usage and compliance.

“Digital transformation has driven every organization to rethink how they create business value for their customers. As enterprises transform their business models from selling products to services, services to experiences, and experiences to outcomes, they evolve their pricing models. Enterprise software vendors not only seek to modernize their pricing to meet the shifts to outcomes-based pricing, but also must find models to allow customers to stay the course, receive value for their existing investments and convert to new business models in a fair and equitable manner to their customers,” said Ray Wang, CEO, Constellation Research.

Historically, for most use cases, customers primarily had the option to pay for the SAP ERP application based on the number of users. As more systems began to access SAP software systems, this created a challenge for customers, who asked for an alternative pricing approach.

Moving forward, SAP will differentiate between:

  • Direct/Human access (existing), which will be charged for by number of human users.
  • Indirect/Digital Access: Access via third party, Internet of Things (IoT), bots and/or other digital access that can be licensed based on transactions/documents processed by the system itself (new).
  • SAP’s new model pertains to the digital core – SAP S/4HANA and SAP S/4HANA Cloud – as well as the SAP ERP application.
  • Existing customers can choose to remain on the current model or move to the new document-based pricing model – whichever best fits their SAP solutions and digital transformation initiatives.
  • Conversion offerings are available to help customers who choose to move from current pricing to the new model.
  • Clear Separation of License Sales from Audit and Compliance

SAP also introduced new organizational changes that separate license sales departments and procedures from auditing departments and procedures.

Customers and SAP have sometimes struggled to reconcile older commercial agreements with the requirements and outputs of modern digital activity levels. Combined with ongoing discussions regarding the procurement of new software, this can sometimes cause frustration.

Moving forward, the organizational change will allow the two conversations to develop independently of one another, empowering customers and SAP customer-facing professionals to collaborate more freely.

SAP plans to introduce features that will enable customers to measure their own usage and license consumption in a self-service manner. The new licensing began rollout in April 2018. SAP will continue to provide educational resources and tools for customers in the coming months to help them fully understand the new licensing approach and decide on the right model for them.