Wednesday, 3 February, 2010

SAP Software Licensing Model

On its web site, SAP has made available easy-to-read 16-page document that helps develop basic understanding of SAP Software Licensing Model. You can find the link at This guide is applicable only to SAP Business Suite, SAP BusinessObjects software, and SAP NetWeaver. Let me share my notes here.
  • SAP offers perpetual software licenses for which up-front payment is needed at the time of purchase. Additionally, SAP offers maintenance and support services for a recurring fee. Typically the annual fee for maintenance is calculated as a percentage of the software contract value (maintenance base). The annual fee is due from the first month after delivery and must be paid in advance.
  • SAP licenses its software through a combination of package licenses and named user licenses. Package licenses entitle a licensee to deploy and use the specified software functionality provided that the appropriate users accessing the functionality are licensed as well. Named user licenses are generally not tied to a specific package license but are valid across all package licenses.
  • Package licenses are priced based on key business metrics such as orders processed, contracts, gross written premium, number of patients treated, and so on. In some cases, package licenses are priced by technology metrics, like the number of CPUs in a server environment. In the case of CPUs as a license metric, the first core of a processor is counted as a full CPU while every additional core is counted only half. The licensed software product can only be used up to the licensed amount of the respective business metric.
  • SAP offers two user types: "SAP application users" and "SAP platform users." The latter are users that access SAP software exclusively through non-SAP applications that have certified integration with SAP applications. For each user type, SAP offers a number of user categories that are suited for different user roles. The default user category is the professional user. All other user categories, such as employee or limited professional, are suitable for specific usage scenarios only.
  • SAP uses different licensing principles when SAP software is accessed by a technical interface or a non-SAP application. License requirements are based on the utilization of the software functionality independent of the technical interface that is used to access functions and data.
  • Any package license includes unlimited rights for nonproductive use of the licensed software, such as development, testing, training, or creating backups. However, all users accessing the software for such purposes (for example, developers, system administrators, and trainees) need to be licensed as named users.
  • SAP software may be delivered with detailed customizing settings and master data that have been preconfigured to meet the requirements of a specific industry sector or country (SAP Best Practices packages). The right to use SAP Best   Practices is included in the respective package license. Maintenance does not include delivery of new versions of SAP Best Practices. 


Abhinav said...

Hi Shrikant,

This made up for an excellent read. Congratulations for putting together all these concepts which prove mind boggling to a lot of management as well as system administration folks.

In my organization, I have been trying to get a stronghold over the license management aspect to SAP implementation. I have asked my IT Team to come up with actual license usage trend so that my team can analyze if we have the correct number of SAP licenses or are we overspending. Unfortunately this area is so vague that I am not able to get a comprehensive idea from my IT Team.

Could you please suggest some of the industry standard SAP License Management Procedures for more effective License Administration as well as some of the industry best practices on License Management.

Anticipating your valuable thoughts on this.



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