Should Customers Charge Indirect Access Fees to SAP?

Executive Summary

  • SAP charges customers indirect access for connecting to their systems.
  • If SAP can charge customer’s indirect access, then can SAP be charged indirect access for connecting to the customer’s legacy?

Introduction

Indirect access is when a software vendor charges to access the data that is stored in their system. The concept is still relatively new and tends to only apply to very powerful software companies that have products already installed at companies. SAP customers do not typically find out about indirect access restrictions during the sales process.

Indirect access is presented as if it is copyright protection, but the way it is often treated by SAP, it is an enlargement of copyright protection. Moreover, almost undiscussed in a published form, indirect access is used by large vendors to block out smaller vendors. Indirect access is, therefore, a kind of account control. Moreover, like any technique of account, control, indirect access is designed to point as many IT expenditures as possible back to the large IT vendor.

SAP Charges for Access

I was recently sent this comment from someone that works for SAP.

“If I am connecting to the SAP ERP system and extracting data that the ERP system’s application logic has captured, manipulated and stored then am I not using the fruits of the IP that SAP have developed? I nice, ‘clean’, structured repository of customer data. That data would not exist if SAP IP was not there. If that is the case then I am still using the result of SAP’s IP. If that is the case then shouldn’t SAP be compensated for that use?”

This is from an employee of SAP who in no way sets policy. This is a very good representation of how SAP views the right to charge customer for accessing their data when it is managed by a SAP application.

SAP, the Zsa Zsa Gabor of Software Vendors!

SAP is the Zsa Zsa Gabor of software companies. Zsa Zsa Gabor was a Hollywood starlet and a highly accomplished gold digger.

Zsa Zsa Gabor was one to have famously remarked that.

I am a marvelous housekeeper. Every time I leave a man, I keep his house.
I never hated a man enough to give him his diamonds back.
A man in love is incomplete until he has married. Then he’s finished.

The reason I bring this up is understanding the mind of an entitled gold digger is excellent background to understanding the psychology of SAP. If you speak with many people that work for SAP, you get the distinct impression that they feel they are owed a certain amount of revenues from their customers. SAP is now in the legacy stage of its lifecycle. However, through one mechanism or another, SAP expects its customers to maintain them in the “lifestyle to which they have become accustomed.”

SAP is Successful Because of Good Software?

People who work for SAP tend to be quite confused as to nature or reasons for SAP’s financial success. SAP is in large part successful because of all the software vendors; it was the most successful in corrupting the advisement function of the large consulting companies. SAP figured out early on.

This insulates SAP from competition. This means that now matter how uncompetitive SAP’s applications, IBM, Deloitte, Accenture and many others will fall all over themselves to recommend SAP’s applications to customers. This is because SAP allows their consulting partners to do virtually all of the consulting. SAP’s consulting division represents only around 3% of the company’s revenues.

And it should be noted that no other software vendor is close in this regard.

Oracle is another mega-vendor.

But Oracle does not have anything near the lock in from the major consulting companies than does SAP. Each of the major consulting companies has Oracle practices. However, they are much smaller in revenues and headcount than the SAP divisions within these same companies. For consulting companies generally, there is no other software vendor that you can make as much money on as specializing in SAP.

Advice on Enjoying the SAP Indirect Access Quiz

To see the full screen just select the lower right-hand corner and expand. Trust us, expanding makes the experience a whole lot more fun.

 

How SAP Controls Accounts

SAP has a tried and tested way of taking control of its accounts. This is explained by the following graphic.

 

Charging SAP for Indirect Access

SAP increasingly believes that its customers owe it license revenue for only connecting another application to SAP’s applications. Sap does not pay its clients a fee for connecting to its legacy applications. This seems unfair. So what needs to be added to future SAP contracts is indirect access fees to client legacy applications.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

What We Do and Research Access

Using the Diagram

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Research Access

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What We Do and Research Access

Using the Diagram

Hover over each bullet or plus sign to see more explanation. To move to a different bullet point, just “hover off” and then hover over the new bullet.

 

Research Access

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References

https://www.constellationr.com/blog-news/insights/sap-wins-major-court-victory-over-indirect-access-customers-should-pay-attention

https://www.computerweekly.com/news/450413224/High-Court-rules-for-SAP-against-Diageo-in-indirect-licensing-case

*https://www.amazon.com/SAP-Nation-2-0-empire-disarray-ebook/dp/B013F5BKJQ