- The reality of the SAP Partnership Program is far different than what is usually presented.
- Vendor partnership agreements are anticompetitive ways that SAP controls competing vendors.
Video Introduction: SAP Partnership Program
Text Introduction (Skip if You Watched the Video)
SAP has the most extensive vendor partnership program of any software vendor worldwide. This program presents the following characteristics to SAP customers and the outside world. SAP has enormous control over its partners, and the arrangement is anticompetitive and corrupt. Once in a partnership with SAP, SAP has approval over the partner’s marketing, often restricting any language that would make a vendor partner from being competitive with an SAP product. You will learn how SAP has weaponized its partnership program against partners.
Lack of Financial Bias Notice: We have no financial ties to SAP or any other entity mentioned in this article.
Lack of Financial Bias Notice: We have no financial ties to SAP or any other entity mentioned in this article.
Restriction of Speech for Partnered Software Vendors
SAP has some of the tightest control over the information published on them by any software vendor. I would argue that SAP’s censorship of information is higher than any other software vendor worldwide.
Part of the control is exercised by providing income sources to those that publish, which I cover in other articles, and other forms of power are through the SAP partnership agreements.
This article will explain a disturbing feature of the SAP partnership system and its impact on the objectivity of information available generally on SAP. That is information both in a published form and communicated orally. We will cover some little-published issues regarding SAP’s vendor partnership program.
The Dreaded SAP Partnership Contract
When a software vendor engages in an SAP partnership, it signs a contract highly tilted in SAP’s favor. The software vendor does not have the option of adjusting the contract. The software vendor must sign SAP’s contract or not be part of the sap partnership ecosystem.
One of the significant concessions that a software vendor gives to SAP is messaging and marketing. As part of the partnership agreement, software vendors may not message or otherwise market their software competitively against SAP. This is a rather astounding concession. What other areas of business where this would be acceptable?
This is true regardless of how the software vendors’ application stacks up against SAP.
We have explained how SAP controls its software partners through its partnership program in various articles. This article will delve into the partnership documents to present the documented evidence. The text we will rely upon is the following:
- SAP PartnerEdge, General Terms, and Conditions for Distribution (Distribution GTSC)
Important Areas Related to SAP’s Ability to Control its Partner
This first clause appears to be bilateral but is, in reality, a way for SAP to control its software partner.
“Neither Party will use the name of the other Party in publicity, advertising, or similar activity, without the prior written consent of the other Party.”
It seems straightforward, right?
Well, watch what happens as the clause continues. The “SAP Group” is just SAP; each sentence lists SAP’s rights versus the partner.
“However, any member of the SAP Group may use Distributor’s name in customer and partner listings (including, without limitation, showing Distributor’s name, address, contact details, partner engagements, areas of expertise and/or offerings on SAP’s websites or online marketplaces) or, at times mutually agreeable to the Parties, as part of the SAP Group’s marketing efforts (including without limitation reference calls and stories, press testimonials, site visits, SAPPHIRE participation). The SAP Group will make reasonable efforts to avoid having the reference activities unreasonably interfere with Distributor’s business. Distributor agrees that SAP may share information on Distributor with any other member of the SAP Group for marketing and other business purposes and that Distributor has secured permission from its employees to allow SAP to share business contact information with any other member of the SAP Group.”
The use of the term SAP Group is misleading. The SAP Group is “SAP’s parent or any of its associated companies. So SAP.
The distributor is a partner of SAP.
Controlling the Information Published by SAP Software Partners
The vendor information on their website concerning SAP is false and incredibly deferential to SAP. Why does this vendor have to write in this way? This is because every word on this page had to be approved by SAP. When a vendor develops a partnership with SAP, freedom of speech is out the window. However, many vendors need certifications to put prospective clients at ease. Interestingly, all the SAP certifications mean very little on a project and are primarily marketing hyperbole. They don’t do much testing at all. SAP
Why is this “®” required every time the term SAP is mentioned? This is not part of copyright law; a company name does not need “®” associated. Can you imagine what this would look like if a company was mentioned every time necessary to add the “®”? It would be ludicrous. This quote is at the bottom of the page.
SAP® is a registered trademark of SAP AG, Germany
That is nice. Every company registered is a trademark; therefore, that SAP did so is not surprising or relevant. However, it does not follow that “®” has to be used.
This is again more slavish to SAP, and this is no doubt at the command of SAP. What is amazing is there are companies like Plan4Demand that have used material from this site without providing any reference of where they obtained it. But SAP gets unnecessary “®”‘s added in this way. But let us move to the content of the quotation.
How SAP Partnered Software Vendors Become Co-Opted by SAP into Changing Their Language
While before having a relationship with SAP, vendors could be directly critical of SAP. After they have a relationship with SAP, they cannot take this approach. They must pitch their products not as competitive but as “complementary.” This comes across very clearly in the marketing documentation that vendors produce. I have noticed this for some time among many inventory optimization multi-echelon vendors. I found it again on a company’s website that integrates with SAP. I have taken an example from a company’s website. I will leave the specific company out because I don’t mean to single them out, and SAP is to blame for creating an environment that requires companies to write in such a docile manner.
When organizations integrate SAP with non-SAP systems it typically happens because the non-SAP application requires data that is managed within SAP® in order to deliver the expected value. Integrating to SAP is unfortunately not an easy task for a couple of reasons:
SAP’s data structures are deeply normalized. While this is a great strength for SAP as an ERP system it also means that data most people would consider basic objects ends up being scattered over numerous tables. Retrieving the data required by the external application therefore requires deep knowledge of the SAP data-model. Many organizations and 3rd party system providers do not have that knowledge.
The problem with the statement is that this does not fully explain SAP has such a big data overhead. Normalization is the following.
“The process of organization data to minimize redundancy. The goal of normalization is to decompose relations in order to produce smaller, well structured relations. Normalization usually involves dividing large tables into smaller and less redundant tables.” – Wikipedia
This means that there are more tables, but each table is more efficient because it has fewer relationships within the table and more between various tables. This speeds searching through tables. However, many vendors normalize their application database. The real issue with SAP’s data layer is not that it is normalized, but that:
- It is poorly documented. SAP does not publish its database schema.
- SAP’s transactions for dealing with tables, such as SE16 and SE16n, are just single table views, making understanding the data related to other tables a major problem.
- Unlike most vendors, SAP’s tables and fields have unintelligible names. Several well-known tables are the MARC and VBAK. The fields are named in the same way.
- Any field in SAP can be interrogated by selecting technical help. However, the many fields point not to actual tables but to virtual tables or what SAP calls “structures.” Finding a field in a structure is essentially a dead-end.
- SAP cannot be connected to any standard relational database tool such as TOAD or Navicat. This means that only SAP transactions can be used to get to the SAP data. However, SAP’s tools are feeble and inefficient for even experienced data resources to use. All other vendors in the supply chain space do not require proprietary tools and therefore are much more efficient regarding data management.
How SAP Retaliates Against Vendor Partners that Tell SAP Customers the Truth
Vendors that message that their products are not merely complementary will typically result in SAP will threaten the software vendor with their partnership being revoked. SAP likes the partner software vendor to present their applications as complementary to SAP, even if the software directly replaces SAP’s functionality.
The partnership is the first step to adjusting and diluting the competing vendor’s messaging so that the software vendor is subordinated to SAP.
A vendor partnership with SAP is often interpreted as a slam dunk for the competing software vendor, and SAP sets about undermining its partner as soon as the partner contract is signed. SAP slowly encroaches on the software vendor, reducing its ability to market as it would typically see fit without SAP’s interference.
The Basic Inequality of the Partnership Agreement
Notice how unequal the status of SAP versus its partner is. The partner is forbidden from mentioning SAP in any marketing material without SAP’s approval. Here, the term “SAP Group ” has more power than SAP. However, the SAP Group is just SAP. The latter part of the clause fundamentally contradicts the implied equality of the first sentence of the clause.
With this single clause, I would immediately call into question the company’s ethics that would set forth such a clause.
We have repeatedly been told that SAP must approve all mentions of SAP by the partner. The partner is provided with strong negative reinforcement when they market in any way that positions their product as competitive to SAP’s products. And this is done to even the most prominent software vendors.
Observe that this clause and the next are used to enforce this control.
SAP Logo and Other Mentions of SAP
The following clause is very similar to the one just reviewed.
“SAP reserves the right to review the use of the SAP Logo in Distributor’s marketing, advertising and other promotional materials.”
This first part is delicate. But look how the following sentence takes a left turn, and it does not speak to the SAP logo but is as broad as possible.
“Distributor must make no representations regarding the SAP Products except as consistent with SAP’s Documentation or as SAP may otherwise approve in writing.”
This is the second clause, which changed right after the first sentence. In the first case, SAP introduces an entity called “SAP Group,” which changes the first sentence’s meaning. Now here, what begins with a statement about the SAP Logo’s approval, which seems innocuous enough, is followed by the broadest possible restriction. SAP’s documentation could be interpreted as either technical or marketing documentation, and it is entirely open-ended.
While this sounds like SAP is ensuring that the presentation of its products is consistent with its documentation, this clause can be used to enforce any conformity with SAP’s desires.
Termination for Good Cause
SAP has many clauses or provisions in its partnership agreement, covering a seemingly unending number of scenarios. And if any of them are not met, then SAP can terminate the partnership as described by this clause.
b) Breach of other provisions. A Party does not comply with any provision of any part of this Agreement other than those referred to in this Article 9 no. 1a) (Non-Payment), 2a) (Repeated Non-Payment) and 2b) (Breach of material provisions) unless the non-compliance is capable of remedy and is remedied within thirty days of the other Party giving notice.
There are so many provisions that meeting all of them would impose a significant overhead upon the software vendor. This is something that is very little discussed in any published form.
The Overhead of SAP Partnership
Remember that vendor frequently only become partners with SAP to gain the marketing/sales benefit. This partnership agreement imposes a significant overhead on the software vendor (the partner) to do this.
Unbalanced Rights and Liabilities
- Virtually all of the clauses lay out the responsibilities and liabilities of the software vendor. SAP seemingly has responsibilities. Almost any clause lays out what the partner must do. The rules the partner must follow, not laws that SAP must follow.
- Therefore, this partnership agreement can be seen as imposing a much higher degree of effort and cost on the partner vendor than it does on SAP.
It is extremely clear from reading the partnership agreement which has the power in the relationship.
Conclusion on the Partnership Agreement
SAP’s partnership agreements are created in bad faith. Companies’ internal legal department likely asked, “Is this something we want to do?” This is because the deal opens up many liabilities for the SAP partner.