The new SAP® Digital Access Licensing model.

 INTRODUCTION

o February 2017 SAP v. Diageo court judgment in the U.K favouring SAP.
o Introducing order-based pricing for order-to-cash (O2C) and procure-to-pay (P2P)
scenarios, and easing license requirements for certain read-only use cases in July
2017.
o On 10 April 2018, SAP introduced its document-based pricing model.
o The new pricing model is similar to the 2017 order-based method, which SAP has
now replaced with the document-based approach and extended to address a much
broader range of indirect and digital use cases.

 ACCESSING SAP.

o SAP now views "Use" of its ERP systems as occurring in three different ways, each with
different license requirements:
 Direct human access — This is the traditional use case, where employees and
business partners log into the SAP system directly. In this case, named user
licensing is typically required. There are no changes planned for this use case.
 SAP application access — This use case represents indirect use of the SAP ERP
system by way of SAP applications such as Ariba, Concur, Fieldglass, Hybris or
SuccessFactors. In this case, SAP states that the SAP application use rights also
include use of the ERP system and that no further licensing is required.
 Indirect and digital access
 Indirect access — Indirect human or nonhuman use of the ERP system
by way of non-SAP applications or interfaces, which include competitor
offerings, custom-built applications and applications created using the
SAP Cloud Platform. For example, a salesperson or customer placing an
order in a non-SAP CRM application that results in a sales order created
in the SAP ERP system.
 Digital access — Direct nonhuman use of the ERP system by devices,
bots, Internet of Things (IoT) sensors and other automated systems. For
example, an artificial intelligence (AI)-enabled software bot entering
financial data into the SAP ERP system, or an IoT sensor creating a
service request in SAP.
 SAP’s NEW DIGITAL ACCESS LICENSING.
o SAP now charges license fees for the creation of documents triggered by any non-
SAP application, device, bot or automated system. The Digital Access price list item
is the mechanism by which to license all of that activity, with pricing based on
documents created. Other activity, such as reading, updating or deleting documents,
is excluded from the document count. The document count is calculated based on
the annual volume of nine different document types.
 According to SAP, all indirect and digital access is accounted for once the customer has
licensed for the full document count, even if other indirect or digital access use cases exist
that trigger other activity in the SAP system. For example, SAP has stated to Gartner that
indirect or digital use to create customer, vendor or asset records will not result in license
fees, as these documents/records do not fall within one of the nine document types.

 For the purposes of indirect and digital access licensing, SAP only counts new documents
created by way of a non-SAP system. For example, if an e-commerce customer places an order
in a third-party application, which then creates a sales document in SAP ERP, that document
is counted for indirect and digital access licensing purposes. However, subsequent documents
created in SAP ERP to complete that process (e.g., invoices, shipment information, financial
transactions) are not part of the document count.)

 SAP weights the document count for some document types differently than others. SAP has
chosen to weight the document count for material documents and financial documents at
only 20% of the total number of documents created. Presumably, this is due to their greater
volume.

 For measurement, SAP is using a trust-based model that depends on self-reporting (for now),
which puts the onus on the customer to get it right. SAP states that it is "planning to provide
customers with tools to monitor and measure ERP use" later in 2018.

 SAP has only stated that the document-based pricing model has volume discounts, and that
the marginal cost per document declines as document volume grows (economies of scale).

 The SAP note contains no logic to differentiate between documents created by SAP or by a
third-party app, so to get meaningful data the note must be run on each system for each
technical user.

 IMPACT
o SAP Customers Can Now Fully Account for Indirect and Digital Access, but Pricing Is
Unknown and Costs Are Difficult to Predict.