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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

Meanwhile, although "SAP guards the price book like the Holy Grail, they price off of it," Lazarto said. "Oracle discloses the price list but doesn't necessarily price off of it."

SAP also "does better job of managing the sales cycle and the sales relationship" with customers than Oracle, Lazarto said. This culture has a "lot to do with executive leadership" at SAP, namely co-CEOs Snabe and Bill McDermott, he said.

However, Snabe's discussion of SAP moving to a bundled license approach over time could mean customers face the same challenges as Oracle shops in determining whether they're getting the best deal.

Bundles will also require customers to be more flexible and a "little more vanilla" in their tastes, said IDC analyst Amy Konary. "A lot of times what happens on the customer side is they'll be presented with a bundle but it doesn't meet their needs." That makes the customer the one potentially introducing more complexity if they decide to make changes in the deal, Konary said.

It will likely take a long time for SAP to phase in major changes to its licensing model, but doing so is important for both customers as well as the company, Konary added.

For one thing, complex license arrangements could expose customers to a higher risk of failing a license audit by SAP, she said. While a customer may have a few employees working on deals who do understand the details, "there are a lot of other people that come into contact with [software] that have the opportunity to misuse it inadvertently," he said.

Even for internal people or partners, licensing "should not be overly complex" as it introduces friction and uncertainty in the sales process, Konary added. "What ends up happening is a customer goes to a sales rep or a partner and asks for a quote, and they'll get a different answer from every person."

 

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