SAP users frustrated over complex licensing and 'licence parking'

User group suggests 'favouritism' may exist, despite a firm company line from UK MD Tim Noble

SAP's UK and Ireland managing director, Tim Noble, failed to dispel increasing unrest among the firm's UK user base at the SAP User Conference 2012 in Manchester this afternoon, as group leaders came away dissatisfied on licensing issues and pricing metrics.

When asked by vice chairman of the SAP User Group, Philip Adams, how SAP is responding to survey findings that 95 per cent of users think SAP's licensing is too complicated, Noble replied that while SAP is trying "very hard to improve the simplicity of licensing", SAP is, by its very nature, "quite complicated".

Noble went on to say that an intention now exists to price future SAP licences among a single metric, adding that in the past two years, existing metrics have become "20 per cent less complex".

Speaking to Computing after Noble's session, Alan Bowling, the chairman of the SAP User Group, questioned this "funny metric", commenting that "it sounded like [Noble] said two different things. And we don't know what that means".

But one of the key issues was Noble's words on unused SAP licences – so-called "shelfware". Not only are users told not to expect their licence fees back if licences remain unused, they are also forced to pay support and maintenance on these licences.

In a time of economic uncertainty, and with mergers and acquisitions also pushing corporate resources and assets together, the need to discontinue SAP licences is becoming a big issue for many users.

"I'm sure all your users would like me to say that in some way [SAP] could assist with support and maintenance, but the fact is they can't," said Noble. "What I would strongly suggest to everybody in this room is that when you have issues like that, do talk to your local account team," Noble continued, inferring that individual deals could be struck.

"There are different ways to tackle it, but let me be straight: we do not park maintenance. Maybe that's not the answer you want to hear, but I've slowly got a reputation in the last two or three years to be working with our customers and being certainly very straight. But what I would say is work with the account teams, because you may be able to achieve what you're trying to do by doing it a different way."

Speaking later with Computing, Noble said that in the case of returning payment for unused licences, "we don't do it, as a rule".

However, Noble built on his earlier suggestions that, while maintenance would also never be given back on licences ("that's our business", said Noble), local account teams could assist by drawing up personalised deals, in a 'store credit' manner of agreement.

SAP users frustrated over complex licensing and 'licence parking'

User group suggests 'favouritism' may exist, despite a firm company line from UK MD Tim Noble

"If you wanted specific examples," said Noble, "say you wanted to do any further transaction with SAP, you could migrate to a separate set of services – get some different software or embrace some of our acquisitions – then in any transaction you did with SAP, we would absolutely work with any of the unused licences you had, and come to some kind of commercial arrangement."

Noble went so far as to say that such an agreement could equate to a like-for-like service licence transfer: "That could be the same value as an unused licence. That's what I'm trying to say."

But when Computing spoke with analyst Ray Wang of Constellation Research, he cited a licensing workshop held only yesterday in which 40 delegates, "about 15 per cent", had benefited from parking.

"When Tim Noble's up there saying ‘We don't park licences', I have to smile, because I know he does. He just doesn't want to talk about that. It's not the corporate line to say you park licences," Wang told Computing.

"Basically, he wants you to spend your money before you get store credit."

Bowling and Adams are disappointed with the apparently grey area between SAP's – and other organisations' – public line on licence parking, and what apparently goes on behind the scenes.

While Adams stressed that, as an independent organisation with all users' interests at heart, the SAP User Group "can't get involved in individual commercial agreements between partners", he stated that "there are customers out there that believe it happens".

"And if there is favouritism or not, and a policy or not, please make it public and let people know," Adams urged SAP.

Bowling added that going public with such a transparent policy could be an excellent opportunity for SAP to "make a game-changing play" in the field of licensing conventions.

"If SAP suddenly came out and said 'Yeah, we park licences,' that would shock the rest of the software world and, as the bigger player, if they really wanted to play the market place, they have that opportunity," said Bowling.

"So, I guess what we're doing is pushing a little bit harder, because now it's the time to do something. Particularly if SAP wants to maintain the loyalty of its customer base.

"People have been investing in SAP for 15 or 20 years, but times are difficult for a lot of organisations right now. It's a shrinking marketplace, I hesitate to guess how much shelfware there is out there, but there will always be a degree of that. And that's an opportunity to work with customers."