Mobile devices and enterprise apps: how to license them if they access the SAP® back-end

Does "user-based" or "outcome-based" licensing pay off?

Mobility is transforming business sharply and substantially: we are seeing, in recent years, a massive introduction of tablet and smartphone applications into the enterprise. Through the so-called "rugged devices" and enterprise apps, companies are improving their processes and gaining in effectiveness.

Mobile technology was first adopted by companies with a large field workforce, such as the utility and oil and gas sectors. Large players (recall the historic partnership between IBM and Apple in 2014) are investing with the aim of conquering the mobile enterprise with hundreds of dedicated enterprise apps.

Every day, more and more SAP® customers (large manufacturing, service and even SMB industries) are seeing the appeal of mobile for their operations and asset management.

These third-party mobile solutions can be integrated with SAP® directly or indirectly, synchronously or asynchronously, through BAPI or a batch process. They can be designed for use by subcontractors/suppliers or internal teams. The "open" nature of the SAP® system (see the Open Data Initiative promoted by Microsoft, Adobe and SAP) facilitates the exchange of information-reading, updating, deleting data-with these external applications.

This facilitates processes because access to the SAP® Core by these mobile applications allows other elements such as service requests or sales orders to be created in an automated manner within the tool. Without time-consuming and redundant paper or e-mail steps.

SAP® licensing in an app-driven economy

In the traditional SAP® licensing model, customers need a user license for each user ("Named User") accessing the SAP® back-end system. This arrangement applies to both internal and external employees (suppliers, subcontractors, etc.).

In the "Named User" definition we also read, "Named users are also technical systems that exchange information with the SAP system, and their users".

However, while user-based pricing works well for direct human access because it is predictable and well understood, it is not easy to apply when the ERP system is used indirectly (e.g., by a user accessing a mobile application that then uses the power of SAP® Digital Core to execute the business process) or digitally (e.g., an RPA bot using the system). Indirect access occurs when people or bots/automations use the Digital Core, without directly accessing the system.

According to SAP®, use should be licensed regardless of the method of access. Thus we read in the contractual definition of "use":

''Use' is defined as to activate the processing capabilities of the software, load, execute, access, employ the software, or display information resulting from such capabilities. Use may occur by way of an interface delivered with or as a part of the software, a licensee or third-party interface, or another intermediary system. All 'use' of SAP software, regardless of the method of access, requires an appropriate license."

If you create service requests or transactions in SAP®, that is a use. This is how SAP® protects its intellectual property. An article on news.sap.com states that "ambiguity related to usage (ed: should every access to the 'core' by mobile applications be licensed?) has led to inconsistent licensing and auditing practices (ed: some even ended up in court, recall the Diageo UK case) that ended up shaking customer confidence."

A new licensing model

n 2017, SAP introduced the concept of "Indirect Static Read" to qualify cases where access to the "core" by mobile applications does not require a license.