The Danger in Underestimating SAP Indirect Access

Executive Summary

  • SAP would like its customers to underestimate the liability of indirect access.
  • This article covers why doing this is a problem.

Introduction

Indirect access tends to only be known companies that have not been subject to an indirect access claim when a major indirect access (IA) public event occurs, such as a court case documents being filed. Good examples of this are Diageo and InBev. However, what is the prevalence of indirect access?

In this article, we will discuss information that has been coming in from the field. But first, we will begin with what SAP would like their customers to believe about the prevalence of indirect access. 

What SAP and SAP Consulting Partners Would Like Customers to Believe

Generally, both SAP and the SAP consulting partners would prefer that their customers do not know anything about indirect access. It is amusing to see IBM, Deloitte or Accenture comment on how to manage indirect access, a consulting company that has a partner relationship with SAP may be able to run a SAM software project, but none can represent their client’s interests against SAP. Consulting companies to compete to see how to ingratiate themselves to SAP, they don’t dare risk offending them. As an example of a recent pursuit which the client was not told about indirect access and had to find out about it from a competing vendor. The customer asked the consulting company why they had not informed them of the indirect access liability.

How much does SAP want customers and prospects to lower their guard?

At SAPPHIRE SAP produced an announcement that was intended to assuage their customer’s concerns about indirect access.

I analyzed this announcement in the article How to Best Understand SAP’s Faux Policy Change on Indirect Access and concluded that it was really no change in policy aside from more specific charging of customers when SAP brings and indirect access claim. DSAG, which is the German SAP user group, and UpperEdge, were two of the only other media entities willing to call out SAP when they are wrong on indirect access, came to the same conclusion that I did on the announcement.

Since that article, I have learned that SAP will not even publish what it intends to charge per purchase order or sales order for indirect access, which was a major part of the announcement. Instead, SAP has stated that customers would be charged “on a case by case basis.” Of course, they will be. This increases the secrecy of the cost of indirect access. The announcement made it seem like SAP is opening up, but then when asked questions, SAP goes back into secrecy mode.

Listening to ASUG on the Frequency of Indirect Access?

ASUG, which is supposed to be a user group, but is actually a marketing arm of SAP, has been telling members that indirect access is rare and that it is merely the high-profile cases (such as Diageo and InBev) that push it to the forefront. This is covered in more detail in the article Is ASUG Lying About the Frequency of SAP Indirect Access? 

As ASUG is really just SAP in “sheep’s clothing” what we can take from ASUG’s stance, is that this is in fact what SAP wants customers to think about IA. I have never been in an SAP-ASUG meeting, but by the looks of it, they get together and SAP basically tells ASUG exactly what messages they want to relay, and ASUG relays those messages no questions asked.

All of this is curious, because ASUG members pay membership fees, and fly to ASUG conferences to be told information that is inaccurate, is 100% beneficial to SAP and to the customer’s disadvantage and is what SAP wants them to believe. ASUG cannot both represent the interests of SAP and of their members.

  • As I stated in the “Faux Policy Change Article,” SAP’s overall intent is to get its customers to lower their guard.
  • The less that their customers are prepared, the more SAP is able to use indirect access as a hammer against them.
  • Time is of the essence. SAP uses restricted timelines to get customers to acquiesce to their demands. The less preparatory work they have done before SAP drops an indirect access claim upon them, the more likely they will end up doing what SAP wants, and this is covered in the article The Time Issue Faced with Indirect Access.

The Reality of Indirect Access Frequency 

SAP has been quite effective with indirect access to drive license revenues, so they don’t have a very good reason to stop doing it. They are catching customers off guard and there is a very poor defense normally available to customers. And vendors that are affected by indirect access are uncoordinated. Essentially the issue is dealt with by individual account teams, that are in most cases not coordinated even within a single software vendor with respect to indirect access.

There are several other reasons for the success SAP is having against customers in indirect access.

  1. Source Issues and Finding Unbiased Representation: Many of the sources relied upon for information on indirect access have already aligned with or are in some way remotely controlled by SAP. This is covered in the article Taking a Multidimensional Approach to Indirect Access.
  2. Confusion with the Roll of Attorneys: Few attorneys know anything about indirect access. Unless the issue is going to court, and this is unlikely and unknown by anyone early in the process, unless the attorney already has a strong familiarity with indirect access, hiring an attorney is not going to help very much. There are several steps that do help. And keeping good notes is important whether an attorney is eventually contacted or whether they are not engaged. Secondly, bringing up attorneys that are unfamiliar with the topic is a lengthy process. If an indirect access claim is brought, time is of the essence in getting control over the situation.
  3. The Lack of SAM Software: Surprising as it may seem, most SAP customers still don’t use SAM software. So when SAP drops an indirect access claim on them, they aren’t even in a position to know what their overall license usage is or to know their specific indirect access exposure. SAM covers all usage measurement, indirect access being just one. Customers really don’t want to not have SAM software installed and then have to deal with both going through a SAM project, negotiating with the SAM vendor, then learning how SAM software reports look, all with SAP and an indirect access claim and their short timelines for response putting extra pressure on the company. SAM software and projects are measured in the hundreds of thousands and are good for more than just indirect access. Indirect access claims are measured in the millions, and sometimes tens of millions.

Indirect Access Frequency

The information I am getting from the field is that indirect access is actually increasing.

I have been tracking indirect access for around a year and a half. This is the point when vendors first started communicating to me that SAP would bring up the topic of indirect access charges as soon as it looked like the other vendor was about to get a contract from SAP.

And what is also interesting is that the indirect access issues brought up to me have been all over the spectrum of the different software categories. Although CRM does seem to be one of SAP’s favorite areas to bring indirect access claims. SAP seems to have an anger management issue when losing to Salesforce.

However, the outcome of these indirect access claims is normally the same. The customer is forced to purchase software from SAP it never wanted to purchase. When SAP reports sales to Wall Street it implies that 100% of them are voluntary. However, with SAP’s use of indirect access, and increasing percentage are sales motivated by indirect access claims.

The Size of Indirect Access Claims

The size of indirect access claims is also increasing. I am now learning of tens of millions of dollars in indirect access claims. I have individual case studies, but I do not want to publish the specific multiple of tens of millions. SAP benefits if these case studies are kept as secret as possible.

The size of these claims is changing behavior and is allowing SAP to win license sales that they had lost prior to bringing the claim.

I am working on research into indirect access which I will publish, and the announcement is described in this article. Vendors and customers that are impacted by indirect access have to share their story. The more that it is kept secret, the more SAP wins. If vendors fear reprisal by SAP, that is what anonymous sourcing is all about. I have yet to expose any source that I kept anonymously.

Conclusion

SAP is ramping up, not ramping down its indirect access claims against its customers, and the claim sizes are growing. One should not be lulled into a false sense of security by Bill McDermott’s happy face at SAPPHIRE on this topic. As I said previously, Bill McDermott was specifically chosen by Hasso Plattner, because he had a “happy face.” But McDermott’s pleasant demeanor is stark contrast to the hard edge I witness in SAP’s use of indirect access for many SAP customers.

SAP customers are receiving a large amount of inaccurate information from sources ranging from ASUG to Deloitte, to Diginomica and this is because so many entities in IT are in some way dependent upon SAP for their revenues. The money is very clearly on the side of agreeing with SAP. I was told by one reader recently to switch sides and to begin writing in favor of SAP, as the pay is much better.

Companies that are dependent on SAP for their revenues cannot be expected to write objectively or to provide objective advice about SAP. Other entities like JNC Consulting do not even seem to question (in their articles) whether the Type 2 indirect access employed by SAP is actually valid or its historical context.

All of this combined with the timelines imposed by SAP on indirect access claims means that the deck is firmly stacked in their favor. And one of the ways of keeping it this way is to underreport and de-emphasize what is really a widespread usage of indirect access.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

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How to Best Understand JNC Consulting on Indirect Access License Fees

 Executive Summary

  • JNC consulting wrote an article on JNC Consulting.
  • We cover the accuracy of this article.

Introduction

JNC Consulting has written some of the most popular articles on SAP indirect access. In this article, we will evaluate their top article on this topic.

Quotes from the ASUG Article

“SAP Indirect Access License Fees Can Be Significant and Unexpected.

Interfacing third-party applications to your SAP system could cost you dearly, due to what SAP refer to as Indirect Access usage. Indirect Access has been around for a long time, although in recent years it has emerged as a hot topic in the SAP licensing world. With claims for unlicensed Indirect Access usage by SAP reaching into the millions, even tens of millions, organizations can no longer afford to ignore the issue. This article addresses the key factors affecting Indirect Access licensing providing guidance on the best way to avoid significant and unexpected licensing fees.

All of this is very true.

Indirect Use

“Named users primarily use the SAP software. Users from upstream or interposed technical systems require licenses as named users if they exchange information with the software in dialog or prompt mode, regardless of whether the software is accessed directly or indirectly. If redundant functions that are also available in the software are used in upstream or interposed systems that access the software, the users of these redundant functions also count as named users, even if the data is transferred to the software in background processing (that is, not dialog related). Indirect access means that the user is communicating with a system upstream from the SAP software that transfers communication activities to the SAP software installation or otherwise accesses the SAP software or uses its functions. In particular, the following are examples of indirect use:

“Users in an upstream system enter or make data available that is transferred to, or interacts with, the SAP software – for example, order entry in a mobile system, or users of a portal to the extent that they use functions of the software.

Users operate non-SAP software to access data that is read, modified, or stored using SAP software and for which they use SAP programs such as the BAPI® programming interface, remote function calls (RFC), or transaction calls.”

Examples of Potential Indirect Access Usage

“Business customers using an eCommerce platform to place sales orders

Sales representatives capturing sales orders via mobile device to input into SAP ERP

A third-party CRM system accessing data in SAP ERP

Partners and suppliers accessing SAP to check inventory and stock levels

Partner or suppliers running and accessing reports on SAP system data via SAP BO

Engineers entering plant maintenance data into SAP via mobile devices

A third-party logistics provider using a handheld device in the warehouse and accessing SAP ERP to get data on materials or stock movements.

Using Salesforce to view customer master data that resides in SAP ERP”

To understand if any given interface or third-party system scenario constitutes Indirect Access you must first examine the nature of the usage, and how data is being exchanged to and from SAP. Primarily, the risk of indirect access resides in your contract, so your SAP contract will be the key in determining if that usage constitutes Indirect Access and if you could be liable to pay SAP additional licensing fees.

This is all accurate in that it reflects SAP’s view on indirect access, but it does not question whether SAP’s definition of indirect access is correct. Therefore, it does not get into the topic of what I call Type 1 Versus Type 2 indirect access. It also does not get into why SAP’s definition of indirect access is so different from every other software vendor on the planet. These are important things to bring up.”

Why is Indirect Access Such a Hot Topic Right Now?

“There is a notable correlation between the global financial crisis and the emergence of Indirect Access. Firms spending power shrunk, and growth shrinkage resulted in less re-occurring annual licensing demand. With spending power and growth slowing down SAP have had to resort to other revenue streams and where Indirect Access had historically been low on SAP’s radar it became a focus. This has also been supported by two key trends. Firstly, the move to interfacing best-of-breed non-SAP applications to SAP, and the emergence of cloud technology and web based platforms extending the use of SAP out beyond the usual boundaries.”

Now, this is inaccurate. The global financial crisis was 10 years ago and indirect access did not start being applied in any meaningful way until around 2013. Therefore it is difficult to see where JNC Consulting is seeing this connection. SAP is having slowed growth in ECC which is related to several factors. A number of SAP’s non-ERP applications have had serious implementation issues on projects, a topic which I cover in How SAP is Now Strip Mining its Customers. With SAP consulting companies recommending SAP applications no matter what the fit with business requirements, SAP sold many applications that should have never been sold. And finally, SAP has been telling Wall Street a growth story that is not really capable of happening. I covered this topic in How SAP Mislead Analysts in Thier Q1 2017 Call. So SAP has created really their own long-term revenue problem, and it is a bit compliant of JNC Consulting to try to pin this on the overall economy, and it also brings up questions of JNC’s objectivity, as it seems like a made up story by JNC to shield SAP from their own dysfunctional decision making.

Secondly, SAP’s cloud offerings are not particularly competitive. So they are getting beaten out in that area. But those boundaries have not “been pushed out.” SAP is losing in important markets. It takes a propagandist who can’t write what is really happening to come up with what JNC Consulting is proposing. But then again JNC Consulting is not a research entity, they are a consulting company, and they have no organizational dedication to communicating truthful information. They exist to maximize profits.

“According to a typical SAP contract, users who indirectly access SAP must have an SAP user license too. There are numerous contractual inclusions or exclusions that could give rise to indirect access risk or protect you from it, and yes, every customers contract is different and different clauses and wording can give rise to Indirect Access risk. Sophisticated organizations specifically define the correlation between indirect access usage and license types in their SAP contracts, either at the initial negotiation before purchase or during annual maintenance. For example, they might write something like, “All indirect access will be classified as user type ESS.” Typically, if a non-SAP system accesses SAP data, the user of that external data needs to be covered by an appropriate SAP license. If you don’t have a clause in your contract, you’d be wise to agree with SAP what constitutes Indirect Usage to avoid any nasty surprises.

Every customers contract is different and different clauses and wording can give rise to Indirect Acccess risk”

And why is that? Why Isn’t JNC Consulting asking the question of why SAP does not offer a standard indirect access set of rules to customers? Also, why is SAP taking a secretive approach to how it enforces indirect access?

Indirect Access FAQ’s

“From our experience these are the 5 most asked question about Indirect Access:”

2. My data passes through multiple connected systems. Would this be classed as Indirect Access?

“It depends on how those systems are connected to the SAP system and whether data is being created, manipulated, or viewed in the SAP system via the connected systems. It also depends on the activity of the users using the system. If they are operating in a way, in terms of their system usage activity that matches any contractual definition of a named-user then they will require the corresponding named-user license to cover that usage.”

Why JNC is drawing a distinction here is unclear. Any non-SAP application being connected to any SAP application is considered indirect access.

3. Is there a certain license type applicable to a named-user who is given the required permissions to access the SAP system indirectly?

“No, the normal rules behind the assignment of named-users apply. If it is small community of users are performing business critical activity they may all need a professional license. A large community of users viewing reports may need an ESS (Employee Self-service License), or indeed some form of specially negotiated blanket coverage usage license which provides a degree of flexibility across large external user populations or where user numbers frequently fluctuate.”

5. What about when SAP creates Indirect Access instances themselves when performing a systems integration or deployment

“SAP may well have been involved in or directly responsible for a third-party system and or performing the integration. Whilst contractually the usage can later be defined as indirect and therefor subject to indirect access licensing fees, any organisation would have a strong case in defending against having to pay these unexpected and un-illustrated fees at a later stage. If these costs had been explained at the time of purchase or implementation the customer may not have proceeded knowing the total licensing fees they would be faced with. JNC have successfully defended clients in this position on that basis.”

Right, JNC to the rescue. But it brings up a question which is unanswered, which is how legitimate can SAP’s claim be when they knew the other system was being connected to SAP the entire time and never alerted their customer? SAP has proposed that their consultants are not aware of the rules of indirect access, which is clearly misleading, as the SAP account manager would also have been aware of the integration to a non-SAP system. But SAP overall does not like non-SAP systems to be connected to SAP, as is covered in the article SAP’s Position on Connection Non-SAP Systems to SAP. 

6. Are Indirect Access claims from SAP negotiable?

“Yes they are! JNC offer a service called Indirect Access Defence, which supports customer facing a claim for Indirect Access from SAP.  We perform a detailed contract analysis and usage evaluation with a view to proving compliant usage. If there is a risk the usage in question could be non-compliant we help the customer by quantifying the risk, identifying target outcomes and developing a response and negotiation strategy.  Due to the complexities of the contract and differences in interpretations of usage SAP can sometimes get it wrong meaning their claim for Indiorect Access can either be proven to be excessive or completely unsubstanciable. So yes, its negotiable so give it a shot! If you need help, call JNC!”

They are negotiable because SAP actually wants to use the indirect access claim to simply get the customer to buy more SAP applications. And here we go with JNC pitching its services.

Map the interface environment

“The first step is to get a clear picture of the interface environment by mapping all SAP systems, and mapping interfaces both to, from, and between SAP systems. From a technical point of view, you need to map your RFC connections to the organization’s systems. A good starting point would be to map all of the connections in T-Code SM59 (RFC Destinations) and review all incoming RFC connections through T-Code ST03N (Workload and Performance Statistics). Architects, technical managers, systems owners, and integration experts can all collaborate to build this picture. The task to identify Indirect Usage becomes all the more difficult if you have multiple servers and applications spanning different geographies, operation verticals and service lines.”

This is all true.

Carry out a contract review

“A thorough and detailed contract review needs to be carried out to understand the terms and conditions that impact indirect access usage obligations. As mentioned earlier in the article there are clauses or a lack thereof that can give rise to Indirect Access or protect you from it. With an understanding of these terms and conditions it is possible then to perform an enterprise wide assessment of all interfaces to determine if that usage gives rise to any Indirect Access liability as defined in the contract.”

So this is leading to the reader contacting JNC consulting.

Perform an Indirect Access risk assessment

“With a detailed understanding of indirect systems usage and contractual entitlement an assessment of licensing risk can then be made on a system-by-system basis. Risk indicators (high, medium, and low for example) can be assigned to all third-party systems. High risk usage can be pro-actively addressed by seeking to procure entitlement from SAP, which will most certainly involve negotiation. It is highly beneficial to approach SAP to discuss your needs rather than be discovered by them, and to come prepared with a clearly defined position and target outcome. For all levels of risk, the risk should be quantified by looking at the potential cost of licensing that usage correctly.”

This is again leading to the reader contacting JNC consulting.

Define Your Risk Response and/or Negotiation Strategy

“The low or no risk usage can be dealt with by writing a business case demonstrating compliant usage referring both to the detailed technical and functional evaluation of the usage and the contract analysis. If SAP were to come knocking on your door regarding indirect access you will be prepared to present your business cases to SAP defending your indirect usage as compliant. Demonstrating to SAP that you are knowledgeable and prepared goes a long way to dispelling any further advances and contributes to Vendor Audit Readiness. Where high risk usage is identified, which is most likely non-compliant and the risk response is to present this to SAP to buy entitlement, the act of having the usage under question clearly defined will help your organisation perform better in the negotiations and most likely result in a better licensing deal. Leaving indirect access to be discovered and pursued by SAP could result in significant and unexpected licensing fees.”

This is all true, but it falls into the category of “be prepared,” rather than providing insights into indirect access.

Indirect Access Conclusion

“With the continued global uptake in SAP the issue of Indirect Access has most certainly not peeked. As a result of some high-profile cases and an increase in awareness within the SAP eco-system, far more organisations are taking action to deal with Indirect Access risk. Some in response to a claim that has been presented by SAP and some with the foresight to address it pro-actively to identify any risk, quantify potential license fee exposure, take appropriate steps to mitigate the risk and minimise their potential exposure. The key to successfully dealing with Indirect Access risk is to get informed, put in place an Indirect Access action plan, and be prepared for a licensing audit.”

“The key to successfully dealing with Indirect Access risk is to get informed, put in place an Indirect Access action plan, and be prepared for a licensing audit”

This is all true. However, this article seems to be mainly about getting people to contact JNC Consulting. That is the article is doing a good job of identifying the issue but is not providing much information outside of that.

Conclusion

This article is accurate, mostly. But it has several major problems:

  • But it is rather deliberately leaving out information that could help the reader.
  • It made up a fake narrative to explain why SAP has been increasing its enforcement of indirect access.
  • The article is entirely promotional on JNC and never once questions whether any of SAP’s claims are even legitimate.

Actually, the article could have been written by SAP rather than by an entity that is posing as independent of SAP. Will JNC Consulting behave as an independent entity that represents customers’ interests when they are hired, or will they show the same compliance to SAP that they have demonstrated in this article? No consulting company in IT is a fiduciary. This means that no consulting company in IT (that I have ever heard of) has signed a legal document which declares they have a duty to place their customer’s interests ahead of their own. Therefore, the independence or lack of independence of any advisory entity that is hired is of paramount importance.

Therefore while some of what is presented in the article is accurate, what it leaves out actually leaves the reader misinformed. For this reason, this article receives a Brightwork Accuracy Score of 6 out of 10. Overall, it seems strange that this would be the top article on the topic of indirect access on the web.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
    • If this type of accuracy interests you, tell us your question below.

References

SAP Indirect Access Explained

Is ASUG Lying About the Frequency of SAP Indirect Access?

Executive Summary

  • ASUG has been providing false information around the frequency of indirect access claims.
  • We describe why ASUG is doing this and the accuracy of information provided by ASUG on IA.

Introduction

I have critiqued ASUG in several previous articles such as ASUG’s Biased and Inaccurate Coverage of SAP Indirect Access. My observation of ASUG’s media output is that ASUG is uniformly repeating SAP’s marketing messaging, that it appears to have no independence from SAP whatsoever, and that it writes false information about SAP. This article will explain what has happened to ASUG. This article will cover what ASUG says about how frequently customers actually face an indirect access claim by SAP. But first, we need to get into what SAP would like customers to think about indirect access.

What SAP Would Like Customers to Think About IA

We don’t have to search very far to determine what SAP would like customers to think about indirect access. In the article How to Best Understand Faux Change on Indirect Access, I covered that SAP created their announcement as a way to make customers minimize their preparation regarding indirect access. I won’t go over the entire article, but in the conclusion, I stated the following:

SAP intends to mislead the SAP customer base into lowering their guard by making a few slight modifications to indirect access that may end up amounting to as close as possible to zero change in SAP’s enforcement of indirect access.

Therefore, it is clear that SAP does not want customers to worry their “pretty little head” about indirect access. And the reason for this is very simple. If customers do not prepare for indirect access, SAP can spring indirect access on their customers and receive less prepared pushback from customers. In fact, I concluded that the entire reason for the announcement on indirect access that occurred at SAPPHIRE was to make many customers that were concerned about it, become less concerned. The entire announcement did not do anything to reduce the concern that customers should have regarding indirect access but instead was worded in a way that it seemed like it did.

The Frequency of Indirect Access Claims

Apparently, when asked directly about indirect access, ASUG seems to have several answers.

  1. One is to state that few customers actually receive an indirect access claim, and the reason that customers have been hearing so much about it is that those scenarios tend to be “noisy.”
  2. Secondly, ASUG will offer their services as mediators if a customer faces an indirect access claim from SAP.

As for the second response, I cover that in the article on the “faux change to indirect access,” so I won’t repeat it here. But for the former answer, it is interesting how well this dovetails with what SAP would like customers to believe. This is a constant issue with ASUG that they state exactly what SAP wants to be stated. However, an independent entity would not perfectly match up with another entity on every single issue like this by chance. And it is well known that SAP uses ASUG as an outlet for publishing SAP marketing material. For example, if Brightwork were to suddenly begin to have talking points that are copied from the press releases of a software vendor on the website one would be right to question our independence. For this reason, we have ceased to see ASUG as having any independent voice from SAP.

Therefore, ASUG’s statements on any topic, can simply by seen as SAP’s statements on any topic, and there is no reason to assume that ASUG is filtering this message in any way.

Conclusion

We don’t know exactly how prevalent indirect access is. However, entities like ASUG and Deloitte or Accenture want indirect access to be as silent as possible. When Deloitte or Accenture are helping a company with a software selection, they do not inform their client of indirect access liabilities that come along with SAP. Why would they? It reduces the likelihood of the customer choosing SAP. And this is the problem with entities like ASUG and like Deloitte or Accenture. They pretend to represent the interests of their members or clients, but ultimately they are all simply tools of SAP.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
    • If this type of accuracy interests you, tell us your question below.

References

The statements by ASUG on indirect access were brought by several anonymous sources that attended ASUG meetings on indirect access and that corroborate the statements made by ASUG.

The Time Crunch When Faced with SAP’s Indirect Access

Executive Summary

  • SAP uses time constraints in a highly underhanded and effective way against their customers.
  • Learn how SAP does this and what SAP customers can expect.

Introduction

One is the interesting features of indirect access is that SAP does not actually want its customers to know about. And which of course all of the consulting companies help SAP hide from their clients. This is the feature of the time constraints that an indirect access claim by SAP will place on the customer.

Tactics Used by SAP to Maximize The Payment

SAP will analyze a company’s indirect access “liability” and will use several tactics in order to extract the most from the account. It uses several techniques. The first is a miscalculation of the indirect access “liability.” Whatever SAP estimates, one should be confident that the amount calculated by SAP is not actually the correct amount if the liability is calculated by an independent entity.

The Time Given by SAP to Respond to an Indirect Access Claim

The second tactic after lying to the customer about their liability, even under SAP’s extreme views of indirect access, is to put the customer under a time constraint. They give their customer a 2 to 3 weeks deadlines to respond. This, of course, puts the customer on the backfoot and really what is the relevance of this deadline. Clearly, this deadline is designed to pressure the customer. Customers that receive an indirect access claim will normally not be accustomed to dealing with such a claim. They will need to perform their own investigation and become educated on the indirect access issues in a very short time if they have not educated themselves on indirect access up to that point. And here is the point.

I often have companies reach out to me and ask if this or that is indirect access. Connecting any SAP system to any non-SAP system is indirect access. This means that every single SAP customer has indirect access liability. SAP does not bring indirect access claims against all of its customers. But the potential is always there. And what this means is that companies need to investigate the indirect access claim before they receive a claim, not afterward.

This is an issue that can cost a company millions, but if they are properly prepared for an indirect access claim, they can always reduce the claim. Remember the claim is designed to shock the customer into acquiescing as soon as possible. If possible, SAP would like to limit the client’s options to search for outside advice and will have a series of false assumptions that they would like the customer to accept regarding the validity of what I call Type 2 indirect access. Companies that they either control like ASUG or Diginomica have written articles that reinforce SAP’s proposals about indirect access. A previous article, ASUG’s Biased and Inaccurate Coverage on SAP Indirect Access covers one example of this. will then offer a menu of choices to their customer and an incentive to purchase quickly. In particular, they are interested in the customer purchasing either S/4HANA or HANA.

Conclusion

Actual implementation differs by account executive that the SAP customer has. However, SAP typically leverages of any knowledge gap in their customers in order to get the most money out of them. How SAP does this is substantially different from any other software vendor, because SAP has a vise like control over both the IT media entities as well as the large SAP consulting companies. This allows SAP to create a fictional reality that seems all encompassing. And SAP marketing is highly skilled in the distribution of misinformation in order to then later take advantage of that misinformation at great cost to its customers. In fact, SAP has the most sophisticated marketing department that we have ever analyzed in enterprise software. There is simply no other marketing department that is able to actually get customers to buy into its messaging, which is particularly impressive (or depressing depending upon whether you work for or compete against SAP) when one considers how poor in quality the information that SAP marketing provides, and how it can be discredited through historical research.

For example, in a recent announcement SAP specifically designed a release to make companies lower their guard. In the announcement, SAP gave nothing of substance to customers. But it was designed to appear as if they had. This is covered in the article the How to Best Understand SAP’s Faux Change on Indirect Access.

If you can convince people that something which is specifically designed to obscure a topic is actually designed to clarify it, that is message control of the highest order.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

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References

Analysis of ASUG’s Misleading Article on SAP’s Indirect Access Announcement

Executive Summary

  • ASUG frequently has false information to provide to SAP customers in order to maximally mislead them.
  • The reason for this is that ASUG is nothing more than SAP’s puppet.

Introduction

As a puppet of SAP, ASUG is perpetually putting out false information on SAP’s indirect access.

Most SAP customers have now become aware of the recent news involving indirect access claims and two prominent SAP customers.

Clearly, how software is licensed and actually used have become an increasingly important, yet complex topic. For too long, many ASUG members have operated with vague or confusing definitions of licensing, and the time is well overdue to clarify meaning and intent.

At ASUG, we see this point in time as an opportunity for clarification to common licensing questions with clear, concise communication so that all SAP customers can safely chart their futures.

And as ASUG likes to present, and to leave out, this is entirely SAP’s making.

SAP is Moving Towards Increased Transparency?

SAP says this about their pricing in their indirect access announcement.

Among the many topics that SAP has made progress on over the past year is one that we don’t talk too publicly about: Corporate Pricing and Licensing. We recognize that traditional approaches to business are being replaced by newer, more transparent, modern ways of thinking and acting. Which is why we are committed to modernizing our pricing approach.

SAP uses opaque pricing and they always have. SAP does this so it can trick customers and maximize profits. SAP will continue issuing statements like this, but then the pricing is kept secret. Not only the price list, which is incredibly complicated and usually requires a pricier separate from the account executive, but also in the discounts that it offers.

ASUG will always reinforce whatever says. So if SAP says something, ASUG is there to repeat it. This convergence of views is why it is entirely obvious that ASUG is SAP’s puppet.

We know that the vast majority of SAP customers believe they are appropriately licensed and in compliance with their software usage. They’re not out to cheat any of their software and service providers. Thusly, we have communicated to SAP that they should not penalize customers who have worked hard and consciously believe they are appropriately licensed.

This would imply that ASUG has the power of SAP rather than vice versa. ASUG needs to appear independent of SAP, which is why they put something like this out. Secondly, the indirect access enforced by SAP is not actually valid indirect access. It is completely out of line with industry standards. To understand SAP’s interpretation of indirect access and to understand how it differs from the traditional definition, see the article Type 1 Versus Type 2 Indirect Access.

ASUG Sets Up Meetings for a Free Exchange of Ideas?

In fact, on Monday at ASUG Annual Conference and SAPPHIRE NOW, more than 60 members of ASUG’s exclusive Executive Exchange group met to discuss general licensing trends and indirect access. The first discussion was with ASUG CEO Geoff Scott and Joe Galuszka, digital business transformation consultant at Information Services Group (ISG), who completed a study with ASUG members on SAP auditing and indirect licensing. (Read the previous article with Galuszka on indirect licensing.)

This two individuals, Geof Scott and Joe Galuszka wrote one of the most false and misleading articles on indirect access that exists. I critiqued it in the article ASUG’s Biased and Misleading Article on Indirect Access. I would trust either of these men to tell me the color of the sky, much less be interested in their views on indirect access. I actually do not think they have sufficient technical backgrounds to understand the topic of indirect access.

“SAP enjoys a vaunted position inside many customers’ businesses—as the core digital nervous system,” says ASUG’s Scott. “As such, SAP should encourage all enterprises to put as much data into the nervous system as possible. Attempts to charge for this access without just cause could jeopardize this position.”

This statement runs counter to what SAP is doing with indirect access. How can SAP expect to bring its indirect access claims against its customers, and expect customers to keep putting data into their “core digital nervous system?” Secondly, if you use the term “core digital nervous system” you are either a propagandist or a simpleton. People who understand IT or have any depth don’t speak that way.

ASUG is There to Help Provide Input to SAP??

With all this in mind, he adds, the ASUG community needs time to appropriately vet and provide input back to SAP on these changes.

“For sure, there’s much more work to do on this topic,” Scott says, “and we, at ASUG, will continue our influence activities and communication with SAP on behalf of our customer base.”

Right Scott. You do that. We know what good hands influencing indirect access will be with SAP…..err we mean ASUG.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
    • If this type of accuracy interests you, tell us your question below.

References

https://www.asug.com/news/asugs-view-on-saps-licensing-announcement

https://news.sap.com/sappire-now-modern-pricing-modern-times/

Misleading Next Steps from ASUG on Indirect Access

Executive Summary

  • An Analysis of ASUG’s Article on Next Steps for ASUG Members
  • Questions ASUG Does not Want to be Asked

Introduction

In a previous article, I analyzed false information provided by ASUG on indirect access. In this article ASUG so discredited themselves that it is interesting to see what else ASUG publishes on the topic. So we will be analyzing their quotes from this article here.

ASUG is Resolute on a Topic Where They Share SAP’s Interests Over the Customer

The Bottom Line

It is ASUG’s resolute view that if you are appropriately licensed today with SAP, you are fine and should resume the more important work of delivering technology innovations for your company.

If you believe you are appropriately licensed and you are hearing otherwise from your SAP account team, I want to hear about it directly from you. ASUG’s job is to advocate on behalf of you—the customer—and we remain steadfast in that commitment.

Wrong.

And ASUG is incredibly dishonest on this point and is not disclosing the control that SAP wields over ASUG. ASUG can’t even write an honest article about indirect access. ASUG allows customers to come in and tell obviously false stories about implementations, and when unflattering information comes out about implementations in presentations, they don’t post the powerpoints on the ASUG website. They are clearly SAP’s puppet on any number of issues related to SAP.

ASUG’s Board is Just Like SAP Customers?

The ASUG Board of Directors, who are made up of 14 SAP customers just like you, discussed this extensively during Annual Conference last week. I can assure you that there was not a single person on the board who felt otherwise. We are unified behind you. (Read more about the discussions at our Executive Exchange event on Monday here.)

This is simply a lie. In ASUG’s previous article on indirect access ASUG’s Biased and Inaccurate Coverage of SAP Indirect Access, illustrated numerous lies that supported SAP’s position 100%. In fact, it is difficult to see how ASUG’s view is different from SAP’s. ASUG is unified behind SAP. They owe their careers to SAP and they will follow SAP’s instructions and do whatever SAP says.

ASUG Answers What the Question is Appropriately Licensed?

What Does “Appropriately Licensed” Mean?

Appropriately licensed means that if you have been undergoing regular license audits without issue, and you are having regular conversations with SAP regarding your application architecture and you are in sync with SAP, then it’s time to move on and move forward.

False.

“Appropriately licensed” is a term of propaganda created by SAP. I covered this in the article How to Best Understand SAP’s Faux Change on Indirect Access, appropriately licenses is a term that seeks to provide validity to a concept which is false, which is SAP legally unsupportable enlarged definition of indirect access. What I call Type 2 indirect access which I covered in the article Type 1 Versus Type 2 Indirect Access. Just because a company does not comport with SAP’s enlarged definition does not mean it is “under licensed.” In fact, contrary to ASUG’s statement, all SAP customers are subject to an indirect access claim because SAP’s enlarged claim of indirect access means that any system connected to SAP would fall under indirect access. Unsurprisingly, ASUG is simply repeating SAP’s position on this topic.

Its All Just a Matter of Confusion?

Has SAP done enough to help customers understand this? No, which is the sentiment that we share with DSAG, our German user community partner. (You can read DSAG’s view on the topic here.)

Right.

However, ASUG is nothing like DSAG. DSAG writes articles that criticize SAP because they do represent their members. The most ASUG will do is stated that “SAP has not done enough to help customers understand this.” Which is not really an admission of anything. Secondly, ASUG is being deliberately obtuse and is gaslighting their readers and members. They know full well that SAP keeps indirect access deliberately opaque because they want to spring indirect access claims on customers without their customers having any idea how to respond. This is another example of a straight lie by the author. It would be impossible for this author to not know this.

The Issue Has SAP’s Full Attention?

I am confident, however, that this issue has SAP’s full attention, and that there is more concrete, actionable information to come from them.

The actionable step is very simple. Buy millions of dollars of SAP software, (preferably S/4HANA and HANA). Those are the concrete actionable steps ASUG has to offer.

Trusted Guidance from ASUG?

What Steps Should I Take Next?

If you have concerns and want clarification, talk to ASUG first.

Not only should you not talk to ASUG first, you should not apprise ASUG in any way of your indirect access concerns of claims brought by SAP. ASUG is under no obligation to its members and I would guess will report your conversation to SAP.

Take your pick of the following names and email addresses at ASUG. Each of us have been in extensive conversations with our members and key SAP leaders, and the group has published several articles on this topic:

  • Geoff Scott (geoffrey.scott@asug.com)
  • Chris Crone (chris.crone@asug.com)
  • Tom Wailgum (thomas.wailgum@asug.com)

Yes, take your pick of compliant SAP puppets who are pretending to be impartial to share your information with.

ASUG Licensing Experts (Who are Have Massive Conflicts of Interest) Are Waiting on Standby?

If necessary, we can also connect you with a licensing expert who has been working alongside us from the very beginning of this issue. Last week, I did speak with one member company (and I know there are others) who engaged an outside firm—at a sizeable expense—to study this issue. This pains me greatly because dollars spent with that outside firm are dollars that can’t be spent on innovating on behalf of your customers.

It makes little different how much of a licensing expert anyone at ASUG is if they have no independence from SAP. But SAP really wants you to contact ASUG. No doubt, ASUG would be your preferred mediation partner according to SAP. That way SAP can obtain information from ASUG that can be used against you in the indirect access claim that they bring against your company.

Conclusion

This issue warrants all SAP customers’ attention and eyeballs—it’s no time to bury your head in the sand and hope this all works itself out.

ASUG believes, and has expressed this to SAP, that the vast majority of customers are doing everything possible to play by the established rules and are great citizens of the ecosystem. Of course, there are outliers. But let’s not allow the outliers to cause disruption for the rest of us.

I want to hear your voice. Let me know if you are hearing things differently from SAP. As always, together we can and will continue to move forward.

Again, ASUG continually assumes that SAP’s indirect access claims are reasonable and legal. Notice their sentence regarding the “established rules.” This implicitly endorses SAP’s perspective on indirect access. However, if this is true..

  • Why are other software vendors not also enforcing these types of indirect access claims against customers?
  • Why, after non-SAP applications being connected to SAP systems without any topic of indirect access being brought up, is indirect access such a major issue now?

These are the questions that ASUG does not want its members to ask.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

Indirect Access Contact

  • Questions About This Area?

    The software space is controlled by vendors, consulting firms and IT analysts who often provide self-serving and incorrect advice at the top rates.

    • We have a better track record of being correct than any of the well-known brands.
    • If this type of accuracy interests you, tell us your question below.

References

https://www.asug.com/news/asugs-view-on-saps-licensing-announcement