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.

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.

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

 

Software Selection Book

SELECTION

Enterprise Software Selection: How to Pinpoint the Perfect Software Solution Using Multiple Information Sources

Mastering Software Selection

Software selection is a form of forecasting, just as any another purchase decision is a forecast of how successfully the purchased item will meet expectations. Forecasting is necessary because it is not feasible to implement each application under consideration before it is purchased to see how it works in the business.

The Importance of Software Selection

Software selection is the most important part of any software implementation because it is the best opportunity to match the software with the business requirements, which is the most important factor in determining the success of the project. This book explains how to get the right information from the right sources to perform software selection correctly.

What You Can Expect from the Book

Essential reading for success in your next software selection and implementation. Software selection is the most important tasks in a software implementation project, as it is your best (if not only) opportunity to make sure that the right software the software that matches the business requirements is being implemented. Choosing the software that is the best fit clears the way for a successful implementation, yet software selection is often fraught with issues, and many companies do not end up with the best software for their needs. However, the process can be greatly simplified by addressing the information sources that influence software selection.

This book is a how-to guide for improving the software selection process and is formulated around the idea that much like purchasing decisions for consumer products the end user and those with the domain expertise must be included. In addition to providing hints for refining the software selection process, this book delves into the often-overlooked topic of how consulting and IT analyst firms influence the purchasing decision and gives the reader an insider’s understanding of the enterprise software market. By reading this book you will:

  • Learn how to apply a scientific approach to the software selection process.
  • Interpret vendor-supplied information to your best advantage.
  • Understand what motivates a software vendor.
  • Learn how the institutional structure and biases of consulting firms affect the advice they give you, and understand how to interpret information from consulting companies correctly.
  • Make vendor demos work to your benefit.
  • Know the right questions to ask on topics such as integration with existing software, cloud versus on-premise vendors, and client references.
  • Differentiate what is important to know about software for improved “implement-ability” versus what the vendor thinks is important for improved “sell-ability.”
  • Better manage your software selection projects to ensure smoother implementations.

Chapters

  • Chapter 1: Introduction to Software Selection
  • Chapter 2: Understanding the Enterprise Software Market
  • Chapter 3: Software Sell-ability versus Implement-ability
  • Chapter 4: How to Use Consulting Advice on Software Selection
  • Chapter 5: How to Use the Reports of Analyst Firms Like Gartner
  • Chapter 6: How to Use Information Provided by Vendors
  • Chapter¬†7: How to Manage the Software Selection Process
  • Chapter¬†8: Conclusion
  • Appendix a: How to Use Independent Consultants for Software Selection