SAP Indirect Access - Is it a Bad Business Move?

By now most of you have heard of the SAP indirect access case. And you know the result. In SAP and Diageo Great Brittan Limited, Diageo was found liable for indirect access through Salesforce. Our SAP Access customers are certainly concerned about this issue. Let’s take a look.

The court said in part, “The plain and obvious meaning of the above provisions is that only Named Users are authorised to use or access the mySAP ERP software.” And “Only Named Users are authorised to use or access the mySAP ERP software directly or indirectly.”

The key in that finding is the Courts interpretation of directly or indirectly. The Court agreed with SAPs assertion and declared in its findingd. "SAP is entitled to an account of the additional license and maintenance fees due from Diageo and an order for paymenmt of the sums found to be due on such an amount." As of the date of this writing the amount has not been set.

Why did SAP decide to enforce its indirect user clause now? Why would SAP lay it all out in the Diageo case? Can the answer be as simple as the cloud? And is this good business for SAP?

The Agreement

SAP has the right, as any business does, to enforce its contracts. One can shift the blame for this case squarely into Diageo’s lap. They should have read and understood the contract. Diageo should have an IT Department that knew the costs of indirect access and how to avoid it, or they could have simply paid for each indirect user as they were brought into the system. It is an easy argument to make. However, I believe we can discuss the business case and how SAP behaved as a corporate citizen without removing some blame from Diageo.

In a typical SAP contract, users who indirectly access SAP must have an SAP user license too. And, yes, all agreements are slightly different. A company can try to protect themselves by adding a more clear definition or adding something like, “indirect access will be classified as user type ESS.” If you don’t have a clause in your contract, perhaps this is the time to make an agreement with SAP on what constitutes indirect assess for your operations. The clean simple definition for you to keep in mind is:

If you have a non-SAP system and users that accesses SAP data through the non-SAP system –

the user of that external data must to be covered by an SAP license.

SAP and Selling You on Connections

SAP has made their mark by telling their customers to connect every system to SAP. This is the reason for having a massive SAP ERP system. Connect everything to it – the internet of everything! So, now this much-touted capability may be a pitfall for many businesses. If you are the CIO and you are five, ten, fifteen years into SAP – you can’t even fathom switching vendors. And if the point of SAP implementation was to connect every system to it, all your third-party applications, well it may just be time to do an indirect user audit. Has SAP put us in a no-win position?

Not SAP

One can argue that this move is going to be counterproductive to SAP in the long run. And as painful as the decision may be for the C-Suite, it may be time to move off SAP.  A movement in the modern IT operation is to embrace connectivity and SAP may make it cost prohibitive to do so. There is a trend to move to cloud technology and interfacing of best-of-breed cloud applications. SAP’s decision to push the indirect access contract hinders the aggressive move toward full company incorporation. And this could be a mistake for SAP.

Leave a comment below - How do you feel about this topic? Is this a bad move by SAP? Should connectivity trump the current business model of indirect access pricing?