Earlier this year a U.K. court ruled in favor of SAP in the case against Diageo, a British alcohol beverage company, resulting in a US$70 million payout. A week after the ruling, SAP started another dispute, this time against Anheuser-Busch InBev, one of the biggest brewing companies in the world. SAP is claiming use of software – both direct and indirect – that is not in accordance to the original contract. Anheuser-Busch InBev is denying the allegations but at the same time states how important SAP is for their operations.
In the light of these disputes, SAP customers who are yet to be audited, are left confused about their own future. SAP have not made any concrete statements or release any documents about indirect access audits. In this blogpost, we’ll attempt to shine some light on the most prominent aspects of concern caused by these events.
Do you own your data?
Prior to the court ruling in U.K. against Diageo, it was assumed by all that SAP owns all only the intellectual property, e.g., data models, data structures, configuration data, and metadata for all the business applications while the customers retain the ownership of their accumulated data. Now, not so much. Diageo used Salesforce software to access their own data in the SAP database, for which they now have to pay license fees. In other words, Diageo is forced to pay twice to use their own data.
If this is the new reality for SAP customers, and any indirect access of SAP data will be viewed as indirect access triggering more license fees, doing business will become much harder for many companies. Software integration is a normal part of running a business, and without it make business processes will not be performed optimally. It does not seem that SAP has an understanding of that, which brings us to the next point.
Is SAP ready for the future?
Technological progress is moving exponentially these days. Many of SAP’s clients are now using SAP beyond what could have been imagined when the contracts were signed 10 or even 5 years ago. Mobile, internet, virtualization and e-commerce are must rather that nice-to-have features, and integration with other smaller softwares happens more and more often. In order to stay competitive companies see the need to keep up with the technological innovation and implement softwares that their clients and suppliers are using. SAP’s way of doing business slows that down.
Their rigid and at times vague contracts slow down innovation and possible even harm the potential growth that their customers can achieve. Sure, SAP is working hard to move their clients to cloud but, as recent disputes have shown, it is done in a manipulative way, which can make you wonder…
Is everything just a revenue raising tactic?
Some question the increasing amount of indirect access audits to be a tactic to optimize revenue and retain support customers. The changes that SAP has made to their contracts has complicated the cancellation process and made introducing technological change risky and expensive. Even the most loyal customers of SAP seem to be at risk of non-compliance and triggering more license fee without intention.
SAP clients are dependent on SAP for conducting their business, as their most vital business processes are connected to a SAP software. That means there is little room for change without running into the risk of revenue loss, major additional costs, brand damage etc. This forces them to navigate the unpredictable contracts SAP is offering. Is SAP aware of this and using it to their advantage? Difficult to say without speculating.
Still, the reality remains the same. SAP clients are facing a new and uncertain landscape to navigate through, which brings on the almost inevitable question.
Can customers really trust SAP?
As mentioned before, SAP have not disclosed any useful information about the cost of indirect access licenses, or how audits are going to be conducted in the future. During SAP’s annual Sapphire Now conference, CEO Bill McDermott announced that “the ‘procure to pay’ and ‘order to cash’ scenarios will now be based on orders, which is a measurable business outcome for any business. Static read access in third-party systems is your data, and so SAP will not charge for that.”
However, it did not bring much clarity to the case. SAP still has no plans to disclose any documentation to make understanding the indirect access audits easier, and every customer will be evaluated based on a case-by-case basis.