This could be mutually assured destruction in SAP world – Enterprise …

One of the most toxic contractual terms in SAP world is that of “indirect access” where users exchange information with the SAP software in dialog or prompt mode. The issue is not with licensed users who access the software using its UX, more with those in surround systems that have been custom built or licensed from other vendors. SAP wants to also be compensated for those users accessing data in the SAP system.

This has caused massive heartburn with SAP customers for years now. I have heard everything from “its OUR data, not that of the SAP system” to “SAP was invited to bid for the surround software, lost it fair and square and still wants to be compensated”  to “this is a time bomb – we are getting hit after years of paying SAP maintenance. If we had known this upfront, we likely would not have implemented SAP” to plenty of un-publishable rants. I know for a fact it has cost SAP plenty of new business because several CIOs and procurement folks have told users to freeze their SAP footprint.

A UK court has recently ruled in favor of SAP in and it sounds like Diageo had the time bomb scenario described above “According to the text of the judgment, the drinks company and SAP had begun their software licence and maintenance agreement in 2004, and came into dispute after Diageo deployed two new third-party systems in 2012.”

If this emboldens SAP to become more aggressive in going after more customers, I am fairly certain it is going to accelerate the “coping strategies” – diversification away from SAP and partners – I have described in SAP Nation. Except that this time, they will also extricate SAP from the core. The reality in many SAP customers is that for all the talk of “wall to wall” coverage, the functionality actually delivered by SAP is pretty small. Lots of surround systems deliver the industry specific and other impactful functionality. Customers have tolerated SAP at the core, but the financial and emotional pain from constant threats of audits is a bit too much to bear.

Yes, it will cost those customers to migrate away from that core so in that sense it is “mutually assured destruction” for both sides.

The only deterrent is – will SAP restrain itself? And how many customers are willing to wait to find out?


(Cross-posted @ Deal Architect)

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