- We cover how indirect access claims can be triggered by sharing information with SAP.
- The downsides to SAP knowing what you are doing with their software.
Brightwork Research & Analysis has covered indirect access extensively. It is one of our primary research areas. One of the things we have been researching lately is what tends to trigger indirect access claims. We will cover this topic, and then suggest a possible response to the trigger.
Sharing Information with SAP
And what we have come to learn is that SAP uses specific areas to trigger an indirect access audit. Gartner provided some coverage of indirect access, however, Gartner’s coverage of this topic is restricted by the fact that they probably receive around $100 million every year from SAP. Yet there are still some interesting things to learn from Gartner.
In reviewing the Gartner recommendations on indirect access I noted the following point:
“Proceed carefully. When audited by SAP (or any vendor), share the minimum amount of information required to comply with the audit terms in your contract, as SAP will use information provided regarding third-party interfaces to justify indirect access compliance fees.”
This got me thinking about the following tactics for reducing your risk of an indirect access claim.
- Use only internal or contract SAP resources to evaluate your indirect access exposure.
- Use a SAM vendor to evaluate your indirect access exposure.
But indirect access basically supports the idea that the less your SAP account executive knows about your use of SAP the better.
This gets into the topic of support. The more that a company uses SAP support, the more SAP knows about how their customers are using their software. However, SAP is the only software vendor that enforces Type 2 indirect access claims. And this is increasing on the part of SAP. SAP produced a misleading announcement on indirect access, which is covered in the article How to Best Understand SAP’s Faux Change on Indirect Access. SAP will continue to apply indirect access because it is driving license revenue. Secondly, because SAP is able to steer customers to buy specific applications based upon an indirect access claim.
SAP’s Support Quality
SAP’s support quality has continued to decline over the past 15 years. SAP takes over 22% of what the customer paid for all of their licenses (there are a number of areas of support that are not covered in the standard 22%, which is why 22% is the minimum that a customer can pay. However, with most of SAP support workers being based in countries like India, where the average pay is between $25 to $35 per day, the margin on the support is immense. This is covered in the article What to Do About SAP’s Declining Support.
There are really two reasons to keep SAP’s support. One is for the actual support, which as discussed has declined to such a point that it is a very poor value. The second reason is to obtain the newest versions of software. However, SAP is not coming out with very much new that is useful. SAP’s only really good application was its ERP system, and most of the non-ERP applications have proven to be quite uncompetitive. This is covered in the article How SAP is Now Strip Mining Customers.
For this reason, there is little reason to continue to pay SAP’s support with its 90% margin when there are entities that can support SAP better than SAP at around 1/2 the cost.
Privacy an Indirect Access
Another benefit to outsourcing support away from SAP is that you gain privacy from SAP. Now certainly, SAP can come in and audit you at any time. However, the less that SAP knows about how you use SAP, the better.
The Problem: A Lack of Discussion and Fact-Checking Around SAP and Oracle Support Costs and Value
Oracle, SAP and their consulting partners, as well as the IT media entities all, have something in common. They don’t want the total costs of support, the margin obtained from support by these vendors or the value of this support provided discussed.
The total costs of Oracle and SAP support are enormous, and they pull resources from IT departments with little commensurate value provided. This is why these entities don’t want these topics discussed.
Oracle and SAP benefit from the lack of quantification or the hidden nature of support costs. Upgrades, many of which cannot add value over their costs, are simply absorbed into the IT budget and considered “business as usual.”
Being Part of the Solution: What to Do About Oracle and SAP Support
The first step is to calculate the total costs of support — not just the 22% base level, but the extra costs with support additions as well as the cost of upgrades, etc. Then to quantify the value provided by ticket closure and determine which applications are actually planned to be upgraded. Paring support costs is not an all or nothing decision, even though SAP and Oracle sales reps make it sound like paring support costs is close to the end of the world.
If you need independent advice and fact-checking that is outside of the vendor and vendor consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.
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.
See Our Other SAP Support Content
Roberto Sacco, Alexa Bona, Derek Prior, Lori Samolsky, SAP Indirect Access License Fees Can Be Significant and Unexpected, 31 July 2014
Bill Ryan, Roberto Sacco, Derek Prior, Lori Samolsky, Customers Must Resolve SAP Indirect Access Risk When Investing in SAP Functionality, April 5, 2017