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Internal document suggests SAP's goal of simplifying licensing will be a tall order

Chris Kanaracus | March 1, 2013
SAP still requires 131 pages of fine print to describe software licensing rules for its products

Snabe also cautioned, however, that users shouldn't expect a major announcement regarding license simplification "in the immediate future."

Overall, the sheer scope of SAP's licensing policies suggests Snabe was wise to set no great expectations, given how long it could take to fully unravel and simplify them, as well as retrain SAP's sales team and channel partners on a new model.

SAP has made further strides in the area of licensing simplification, and also seeks to effectively educate its customers on the topic, according to SAP spokesman James Dever.

The 131-page document is not meant for public consumption, aimed instead at "sales people who need to be knowledgeable chapter-and-verse in order to talk to customers," Dever said Thursday. SAP has provided another, public document meant for customers which is easier to grasp and runs about 25 pages including appendices, Dever noted.

Dever declined to comment on the contents of the longer document.

There's a rationale for the level of detail in SAP's licensing, Dever added. "The various types of use cases is a decision by SAP to define the value and the types of use with some precision," he said. "We're not taking a one-size-fits-all approach. That said, we're doing things that we can to make things simpler. We acknowledge it's an ongoing effort."

SAP is also getting deeper into the SaaS (software as a service) business, which tends to be sold in simpler terms via monthly subscription. "As our cloud business grows, we gain experience from that and find opportunities to simplify," Dever said.

Some significant progress has already been made in recent times, such as SAP's successfully creating a standardized set of contract templates for use worldwide, Dever added. "That's a pretty major victory for us."

There's also a fresh example of the bundling approach Snabe referred to, in the form of SAP's recently announced 360 Customer product, Dever said.

Some observers aren't seeing major change for the better just yet. "From our perspective, with some of the deals we've been working on, [licensing] hasn't been simplified at all," said David Blake , CEO of UpperEdge, an IT sourcing and consulting firm that deals frequently with SAP contract negotiations on behalf of customers.

But SAP is not the only offender in this regard among enterprise software vendors, according to Jeff Lazarto, principal at UpperEdge.

While UpperEdge's clients generally believe SAP rival Oracle's licensing policies are simpler and more transparent than SAP's, Lazarto cautioned against making a straight apples-to-apples comparison between the companies.

That because while Oracle has long provided public price lists for its products, in actual negotiations "what we typically see is that everything Oracle proposes is a custom bundle," Lazarto said. As a result, it can be difficult for customers to keep track of which product in the bundle is getting what level of discount off the list price. Oracle has also come under fire for a perception of licensing complexity, particularly with respect to its widely used database.

 

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