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Reducing SAP Licensing Cost and Risk, Including Named Users, Packages, and Indirect Access

by Eric Feldman | insiderPROFILES, Volume 8, Issue 2

March 29, 2017

Reducing SAP Licensing Costs

License management for your enterprise software can be complex and, at times, expensive. It’s tempting to cut corners or allow indirect users to access the system. But doing so could open you up to liabilities and legal issues that can have a significant financial impact. Learn how you can efficiently and easily manage licenses for your SAP software, avoiding overpayments and reducing license management effort while still adhering to licensing rules.

Lawsuits between large software vendors and their customers often make the news. In 2015, Adobe took legal action against fashion apparel giant Forever 21 over alleged use of pirated software. And in 2016, a company called Bitmanagement Software filed a complaint that the United States Navy used $600 million worth of unlicensed software.

Enterprise software licensing agreements are complex documents. Companies license software products based on many different license metrics, including a specific quantity of named users or devices, a fixed count of processors in a server, or even the number of simultaneous users, to name a few. In most cases, the use of unlicensed copies of the software by enterprise customers is unintentional and is due to the complexity of the contracts, product use rights, and license models. However, intentional or not, the fact remains that non-compliance with software licenses is prevalent.

Identifying Named Users and Indirect Ones

In many software licensing models, once a business goes above the number of licensed users, devices, processors, and so on, it is out of compliance with its software license agreement. But what if there is uncertainty over what qualifies as a “named user?” This was a primary issue in the recent court decision of SAP UK v Diageo Great Britain. In this case, the High Court of England and Wales ruled in favor of SAP, which sought a claim of over £55 million against the beverage giant Diageo for “indirect users.” And the implications are huge for large companies that have integrated their customer-facing systems with their SAP database.

In this particular case, Diageo had created two customer-facing customer relationship management (CRM) applications on a third-party platform that accessed its SAP ERP system through a licensed SAP Process Integration interface. The dispute was whether the SAP Process Integration license fee allows Diageo’s 5,800 sales staff and customers to access SAP data through their CRM applications or whether all these people need to be “named users.” The High Court ruled that named user license fees apply to these indirect users.

The judge on the case rejected the defense’s argument that SAP Process Integration is a “gatekeeper” license for gaining access to the SAP suite of applications. And while she confirmed that license fees are due for “indirect access,” she did not determine the specific category of named user licenses for Diageo’s customers. As a result, the financial liability has yet to be determined.

This case essentially affirmed the SAP license model, meaning as an SAP customer, you could be liable for all indirect users, with an enormous potential financial impact. So how can you mitigate the financial risk of SAP indirect access? You can leverage the Software License Optimization solution for SAP applications from Flexera Software.

Flexera Helps Mitigate Indirect Access Risks

The FlexNet Manager solution for SAP applications will help you optimize your SAP named user licenses by detecting idle users, identifying duplicate users, and assigning the optimal license type for each user based on an analysis of real usage data — enabling you to avoid buying too many high-cost license types when lower-cost licenses will meet user needs. And just as important, the FlexNet Manager for SAP applications solution discovers instances of indirect access and enables organizations to manage and optimize the license requirements for users of non-SAP systems accessing the data in the SAP systems.

With the solution, companies can identify idle users on non-SAP (indirect access) systems who have not logged in for an extended period and may be able to be retired; identify users who have accounts on both SAP systems and non-SAP systems to avoid licensing these users multiple times; and determine the optimal SAP license type for each non-SAP user based on all available information, including his or her usage history.

Learn More

To learn more about managing SAP licenses, avoiding license overpayment, and reducing the risk of unknown indirect access users, be sure to read the white paper available for download ( that details the factors at the root of overpayment for SAP licenses as well as how a software license optimization solution can cut down overspending. For more details about Flexera Software, visit  

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Eric J Feldman
Eric Feldman

Eric J. Feldman is a Senior Product Marketing Manager for Flexera Software, working with Software License Optimization, Software Asset Management, and Cloud solutions. Previously, Eric was at CA Technologies where he held a number of marketing and enterprise customer facing architecture roles. Eric has an MBA from the LIU Post Campus of Long Island University.

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