Indirect use of SAP can be a significant licensing risk. Is SAP’s Digital Access model the best way to manage this and should you take advantage of the Digital Access Adoption Program (DAAP) while it’s still available?
The concepts of indirect use and indirect access in relation to SAP software were brought to prominence by the 2017 SAP v Diageo court case ruling. The financial consequences for Diageo, who were found to be under licensed, have caused concern for SAP customers ever since. With the introduction of the SAP Digital Access pricing model in 2018 SAP offered a new way for their customers to address licensing risk from indirect access usage. To incentivize uptake of the new model SAP’s Digital Access Adoption Program (DAAP) was launched in 2019, offering time-limited deals to exchange existing SAP licenses and convert to Digital Access with a guaranteed 90% discount. With SAP now having extended the DAAP into a fourth year we thought it a good time to recap the key concepts and highlight things to consider if you are contemplating the SAP Digital Access model for your organization.
What Is SAP Indirect Access?
Before we examine the SAP Digital Access pricing model in more detail it is important to have an understanding of what indirect access in relation to SAP software actually is. In SAP ERP Pricing for the Digital Age SAP provide the following definition:
“Indirect/Digital Access is when people or things use* the Digital Core without directly logging into the system. It occurs when humans, any device or system, indirectly use the Digital Core via non-SAP intermediary software, such as a non-SAP frontend, a custom-solution, or any other third-party application. It also occurs when non-human devices, bots, automated systems, etc. use the Digital Core in any way.
*SAP On Premise Contractual Definition of Use: ‘Use’ is defined as…to activate the processing capabilities of the Software, load, execute, access, employ the Software, or display information resulting from such capabilities. Use may occur by way of an interface delivered with or as a part of the Software, a Licensee or third-party interface, or another intermediary system. All ‘use’ of SAP software, regardless of the method of access, requires an appropriate license.”
In summary, all usage of the SAP system needs to be licensed, including where the system is being accessed indirectly.
Technically, indirect access occurs when data communication is executed remotely, for example when using SAP’s remote protocol RFC (Remote Function Call). If data is created, manipulated or viewed in the SAP systems indirectly via a third-party application, that usage needs to be licensed.
The terms indirect use, indirect access and digital access are used fairly interchangeably when referring to this type of usage. These should not be confused with SAP Digital Access which is the name of SAP’s pricing model for licensing indirect use and is based on the number of relevant digital documents that are created; we explore this in further detail below. Before SAP Digital Access, the only method for licensing indirect use was Named User and Order licenses. This model remains the legacy licensing approach and still exists within many organizations. SAP customers not on the SAP Digital Access license model are commonly described as Indirect Access customers.
In terms of access to the SAP Digital Core, Indirect/Digital Access differs from both Direct Human Access and SAP Application Access. In summary:
- Indirect Access – data is sent to or from SAP through Non-SAP Applications. This is licensed by SAP Named User licenses or SAP Sales & Service Order Processing/SAP Purchase Order Processing licenses.
- Digital Access – data is sent to or from SAP through Non-SAP Applications. This is licensed by SAP Digital Access, Documents.
- Direct Human Access – A licensed Named User is accessing SAP.
- SAP Application Access – Access is from a licensed SAP Application, not a third-party application.
What is SAP Digital Access?
The SAP Digital Access license grants humans, bots, sensors, chips, devices, etc. rights to use SAP ERP through Non-SAP Application(s) that are directly integrated to ERP without the need to be licensed as a Named User. SAP define 9 different types of documents that are relevant for licensing. Any document created that does not fit within these 9 types therefore does not require a license. Under the Digital Access model, all indirect access of ERP will be licensed based exclusively upon the number of documents created annually.
This means any Indirect Use of the SAP ERP/Digital Core must be licensed by SAP Digital Access if you move to this model. Where in the Indirect Access licensing model a licensed Named User does not require any additional licensing if accessing directly or indirectly, this is not the case with SAP Digital Access. A Named User license covers their Direct Human Access but then if there is any case of Indirect Access from this user, then this is licensed by SAP Digital Access as well. This is something to keep in mind when considering SAP Digital Access as an alternative licensing model – you may still require the same amount of Named User licenses.
Determining indirect usage under the legacy Named User based, indirect access license model often entails a lengthy and difficult measurement process. Having introduced SAP Digital Access as an alternative to license this functionality SAP have also created a far easier way to measure this software use. Given this, it is likely SAP will integrate a Digital Access review as part of the standard SAP annual audit to regularly measure the use of documents.
Is SAP Digital Access Relevant to Me?
In the age of digital transformation with constant change in the technology landscape it is likely most organizations will have instances of indirect access usage taking place. Therefore, SAP Digital Access would be relevant for all customers. However, it’s not mandatory to move to Digital Access. You can do nothing and use your Named User licenses to cover indirect functionality as well as Sales/Purchase Order licenses to cover any orders created by consumers or customers. In many cases relying on named users is a more expensive method to cover indirect software use when compared with the Digital Access license model via SAP’s Digital Access Adoption Program.
Some examples of common indirect access scenarios:
- Organizations who work with third party organizations
- Organizations who use portable devices for processing transactions or managing data
- Organizations who work with logistics organizations
SAP Digital Access and S/4HANA
SAP Digital Access licensing is also available with S/4HANA but will have its own unique material number and is unique to the S/4HANA platform.
From a measurement perspective there will be some differences on what tables are looked at for documents but this has very little impact on the licensing.
Digital Access Document Types
|Quality Management Document||1.0|
|Service and Maintenance Document||1.0|
|Time Management Document||0.2|
How is Digital Access Measured?
Digital Access can be measured through two methods
- Passport Tool
- Estimation Tool
Whichever tool is utilized, both tools can be independently implemented and utilized by the client to identify the license requirements for Digital Access. If the results satisfy SAP these measurements can be put towards calculating the number of licenses required for purchase. It is not mandatory for SAP to evaluate the number of Digital Access documents that are required, the customer can do this assessment independent of SAP. However, keep in mind that SAP will review these findings to ensure that the figures declared were measured correctly and accurately.
What is the SAP Passport Tool?
The measurement of Digital Access documents uses the SAP Passport technology. The Passport is already in place for end-to-end system tracing and monitoring in distributed system landscapes. This functionality is now also used for identifying digital access documents. The SAP Passport identifier is a data structure that is transported from the sender to the receiver system as additional header fields by the communication protocols (for example, RFC, HTTPS).
To put it simply, all documents, whether they come from a non-SAP or SAP application, arrive in the database tables of the digital core. With the help of the SAP Passport identifier, the tool can distinguish between documents that have been created directly and indirectly to determine the appropriate document count.
It’s important to note that the Passport Tool is still fairly new and has seen many updates as the tool isn’t still the most reliable and does still require additional analysis to ensure the document counts are accurate.
What is the Estimation Tool?
The Estimation Tool is delivered by SAP through SAP notes. ITAA have coined this as the Estimation Tool to easily distinguish between this and the Passport Tool. It is designed to provide an estimated count of the number of documents that have been created in SAP directly and indirectly. This is an alternative to the existing Passport tool and is used to help identify and measure the number of documents that are being created by SAP. The biggest difference between the Passport and Estimation Tool is that the Estimation Tool will measure documents that were created directly and indirectly, therefore requiring further independent analysis to identify the relevant indirect documents.
SAP Passport Tool vs Estimation Tool
|Passport Tool||Estimation Tool|
|Can provide figures of documents being created indirectly.||Easy to utilize and install.|
|Once implemented, the process can be turned over quite quickly to determine Digital Access license requirements.||Measures retroactively so can be used from the moment of installation|
|Passport tool still not reliable and requires some independent analysis upon receiving output from the tool. SAP will likely being releases several updates to improve this tool.||Tool is incapable of distinguishing between direct and indirect documents that are created. Therefore requires further assessment upon receiving output from the tool.|
|To be able to extrapolate accurate figures from the passport tool it typically requires 1 year for reliable output.||Can take up to 2-4 months to complete an assessment. Could be longer dependent on the size of the organization.|
|Can be difficult to implement for organizations depending on what versions other SAP systems are on.|
Counting Digital Access Documents
Digital Access documents are only relevant for the initial document that is created. Any subsequent documents are not relevant and are not required for counting when calculating Digital Access licenses. Commonly we find scenarios where several of the same documents are created for different purposes within a customer’s organization.
For example a Billing Invoice that is replicated into SAP would typically require a license under the Billing Document license type. However the customer also uses the same document under their financial accounting process which is being used for a different purpose. Therefore, determining how these documents were created is necessary to help understand and distinguish the document count.
To identify and confirm the subsequent document(s) requires further analysis of the customer’s use case to help determine the process of how these documents are actually being created within SAP.
A key aspect to consider when counting documents is the type of integration the customer has. By understanding the integration it will help determine where and how these documents are being created.
What is SAP’s Digital Access Adoption Program (DAAP)?
SAP’s Digital Access Adoption Program (DAAP) was introduced in April 2018. The program sought to encourage customers to migrate to the SAP Digital Access licensing model, incentivized by a persuasive financial incentive. Customers who opt into the program receive at least 90% discount on their total Digital Access license purchase. There are several different ways to use this program for both measuring the document count and purchasing the license.
Once you have investigated the actual number of licenses required for purchasing, SAP offers two financial incentives to purchase them which are both persuasive options.
Option A – License 115% of documents measured
This first option requires a commitment to license 15% more documents than required. SAP will then calculate a standard volume discount and tiered unit price based on the 115% volume of documents. The customer will then only have to pay for 15% of the documents yet gain 115% of the licenses.
Restrictions – must be purchased in a standalone order form and no further discounts can be negotiated.
Option B – 90% discount on at least 100% of documents measured
This option is much simpler and grants the customer a simple 90% discount on their purchase of SAP Digital Access
Restrictions – 90% discount applies to only this product in an order form and no further discounts can be negotiated.
Option A is often more expensive as you are buying more licenses, but it is usually cheaper than buying 115% of documents at the 90% discount. On average we see that Option A is 11% more expensive but grants 15% more licenses. We also see that if you purchase 115% of licenses but choose a option B, you will usually end up paying more than option A.
SAP’s DAAP also grants the ability to trade in now irrelevant licenses that were used to license Indirect Access. For example, this could be some Named User licenses or all of your Sales/Purchase Order licenses. Review your current license entitlement and utilization to see if you can gain credit and get close to a zero cost deal.
Based on our experience when working with clients, the DAAP process can vary as many customers will use DAAP as an opportunity to negotiate for other SAP licenses they may be interested in. It could also be used as part of a non-compliance engagement which would have its own unique variables to deal with. The common theme amongst process points for SAP’s DAAP is that your measurement results for Digital Access documents will be reviewed by SAP to help determine your document requirements. This does not mean SAP will be involved in the measurement process unless the customer specifically requests this of SAP.
An important point to remember for DAAP is that this is only relevant for the first purchase of the license. Subsequent purchases will be based on standard SAP negotiation and we note that without these discounts, some customers find this an expensive license.
SAP’s Strategy for Digital Access in 2022
Digital Access and License Audit Workbench
SAP’s annual license audit which is conducted via a mix of self-declaration and their in-house measurement tool the LAW (License Audit Workbench) does output Digital Access figures, but these figures are not reliable and should not be considered as an accurate measurement. However, as we are seeing more cases where the LAW has been outputting Digital Access documents this projects that either the Passport Tool will be incorporated within the annual measurement or will be utilized via a new iteration of the LAW measurement tool.
SAP’s Control for Indirect Access Scenarios
Prior to the Digital Access license model SAP indirect use case scenarios would commonly be very complex and exhaustive to measure. Digital Access helps simplify this process by making indirect use scenarios easier to measure and understand. This benefits the customer and SAP. The customer benefits as they can be more confident of their license compliance position and SAP are now able to more easily monetize and measure these types of risks through their annual license audit.
Leveraging SAP’s Digital Access Adoption Program to create more opportunities
The Digital Access Adoption Program is time-sensitive with a current deadline of end of 2022. SAP could use this as leverage to migrate their customers to the Digital Access model. This isn’t necessarily a bad thing, as already mentioned this license model can be more beneficial for customers. However, it is important to be aware that SAP have several other initiatives they are actively promoting and may use the DAAP as a small part of a much larger negotiation. It’s no secret that take up of S/4HANA and Cloud is being actively promoted so don’t be surprised if your account manager mentions programs such as RISE in an attempt to consolidate your agreements into a new Cloud contract. This isn’t something to be concerned about so long as you’re aware of what you want and need. Having a clear understanding of your SAP roadmap would be beneficial as you can dictate the type of solutions you want to maximize the deal alongside your DAAP negotiation. SAP are more open to negotiation and flexibility when you are willing to open the wallet so if there is genuine need and interest it could be worthwhile.
Our SAP licensing experts have helped clients manage indirect access risk and assess whether the DAAP is right for them. You can read more about our indirect access, Digital Access and DAAP services or please feel free to contact us directly about SAP or any other licensing matter.