Software licensing structures reflect complexity and rapid change in the technical and business environment. Virtualization, on-demand, on premise, hosting, outsourcing, new product development – to only name a few – all add to the challenges in tracking software entitlements and deployment.
The management of SAP licenses is particularly challenging:
- Complex SAP license metrics (more than 100 special licensing types)
- Industry-specific systems
- Expensive licensing models (up to 22% maintenance per year)
- Non-transparent license control (automated measurement systems by SAP)
- Difficult license management (Software Identification (SWID) Tags recording unique information about an installed software application are not supported)
Due to this complexity, companies using SAP software may find it hard to achieve and maintain a clear overview of SAP licensing rules and usage rights. In its turn, this may lead to a not optimal usage of licenses and potentially unexpected and unnecessarily high costs.
SAP-Clients are obliged to install the License Administration Workbench (LAW) tool, which reports the clients’ respective license usage statement to SAP. Based on this statement SAP invoices their clients annually. It is, however, important to know that LAW only takes into account the license type set up at account creation – not the actual use of the solution. Furthermore, SAP contracts are set up so that the annual fees cannot be decreased during the contract duration. Therefore, user accounts clean-up needs to be performed prior to the annual measurement by LAW to avoid a permanent increase of fees.
In my experience, many customers pay for licenses that they are not even using. However, due to the complex configuration process, licensees are not always able to identify and optimize license requirements. Over the last decade, these challenges have led many SAP customers to experience double-digit increases in maintenance and license fee costs.