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Users pan SAP licensing in new survey

A new SAP User Group survey finds widespread frustration over SAP licensing and pricing. SAP says they're listening, but what will they actually do?

Results of a new user survey on attitudes toward SAP's licensing practices are neither ambiguous, nor surprising -- especially for those already frustrated with the way the software maker does business. The U.K. and Ireland SAP User Group, which conducted the survey, said SAP is listening, even though it's unclear what changes the software maker will eventually make.

According to the survey, which included 366 users among 150 organizations throughout the region, 95% of SAP users believe the company's software licensing policies are overly complicated.

Furthermore, the research revealed users want to see greater transparency when it comes to licensing costs, with 88% of respondents believing that SAP should make its price list public.

Though the numbers will likely surprise few users of SAP software, Philip Adams, the group's vice chairman, said the poll marked only the beginning of a recent initiative by his group to drill down on customers' concerns around licensing and pricing, and to engage SAP on making improvements in those areas. Adams said the group would likely perform a similar poll in another year to see where progress had been made.

At the same time, while the survey didn't address specific complaints as to why SAP's licensing practices were so opaque to so many of its customers, Adams said the problems were not specific to SAP, but were common among software customers in general.

Apart from SAP changing its policies, however, SAP could improve the situation at the sales level by making sure representatives do a better job of explaining the company's current licensing policies and pricing to current and potential customers, and making sure the information on the SAP Service Marketplace is clearer, and easier to find. The SAP Service Marketplace is the main entry point for information on customer support, consulting services, education services and partner support information.

"[SAP has to improve the SAP Service Marketplace] to make it clear, so that if people don't want to get it from their salespeople, they can log onto the website and see how it's licensed," Adams said.

Earlier this year, Gartner released a report on where customers should go for information on SAP products and licensing, which also criticized the SAP Marketplace, among other portals of information.

Finding the right information there can be difficult, said Derek Prior, a Gartner analyst and co-author of the report, due to the fact that the search technology SAP uses within its portals is "ineffective" compared to more commonly known engines like Google.

"SAP's own search technology is just not very efficient," Prior said. He also said confusion over SAP licensing has grown. "The stuff for SAP licensing has gotten so much more complex over time. It's very, very complicated," Prior said.

Other responses around SAP licensing practices were equally pessimistic. The vast majority of respondents said it was difficult to know what licenses they needed through the lifecycle of their SAP software, a problem caused by SAP software packages coming with multiple licenses with different limits regarding usage rights, according to the survey. Approximately 89% of users said they would like SAP to reduce complexity by offering software based on only one licence or usage metric.

The survey also found that customers are looking for more flexibility when it comes to only paying for support on the licenses they're using, given that usage patterns fluctuate over time, and that companies often downsize during challenging economic times, which also affects the number of people using the software. According to the survey, 97% of respondents said they should have the ability to "park" those unused licenses during support periods.

Roughly three-quarters of respondents said they had to buy more licenses or functionality than they actually needed, when all they wanted was specific functionality for a small group.

In a statement provided to the U.K. and Ireland SAP User Group, SAP said it understood users' frustration about the "perceived complexities" around its licensing practices, and were embarking on a number of measures.

Those measures include standardizing terms and conditions globally for all customers, as well as making sure all software rights -- including those for the full Sybase suite -- are available online, according to Tim Noble, managing director of SAP in the U.K. and Ireland.

"We've also spent a significant amount of time on simplifying the buying process so that it's easy to understand, as well as ensuring implementation of SAP's products and services are tailored to meet our customers' individual and specific needs," Noble is quoted as saying in the survey results summary.

When asked if Noble's statement merely suggested SAP was only willing to tinker with the edges of SAP licensing rather than any underlying structure, Adams said he was for now reserving judgment.

"I'll hold my response for at least another six to 12 months. I think it's positive that SAP is willing to engage. Maybe [Noble's] answers are scratching the surface, and are nice to have around the edges. Maybe we'll get into the meat in the future," Adams said. "Maybe the start has been slower than we'd like, [but] I can understand that this takes time."

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Software licensing in general is too complex for many organizations to manage without the assistance of tools (this study on SAP is just the latest outcry from the market asking for help). Without accurate intelligence into software licenses installed and used, and a reconciliation of that usage data with the terms and conditions contained in the license agreement – organizations will not have the capability to remain in compliance and reduce risk of unbudgeted software license audit true ups. Moreover, they will not be in a position to negotiate the most favorable terms with their vendors based on their actual needs and usage. I work for Flexera Software and we know firsthand that SAP licensing is especially taxing for many enterprises. It’s based on user roles, such as professional, limited professional, developer, and employee self-service and licenses are manually assigned by an SAP administrator (who typically has zero insight into actual usage data). Making a mistake like assigning a professional license when, in fact, the user only needed a limited-professional license, can cost thousands of dollars more than necessary. Optimizing an SAP license estate requires accurate insight into how each employee uses the system to ensure that the most accurate (and least expensive) license type is assigned to each user. All too often we see that an organization is “over-licensed,” providing an opportunity for a reduction in future purchases (cost avoidance). This is why it’s so important to leverage a software license optimization solution capable of combining multiple license optimization strategies that can provide recommendations to SAP administrators. These solutions can pinpoint the optimal license classification for each user, identify and remove duplicate users, and highlight stagnant users that should be retired. While organizations currently cannot control how SAP structures its licensing, they can gain control over their SAP license estate through software license optimization.

Randy Littleson
Flexera Software
Couldn't agree more. I am very down on SAP after they refused to let me 'park' two licenses that I didn't need any more. They are still charging me full support on them even though they aren't being used. My general impression is that they don't give a fig about customer service and we are lucky to have them.