How SAP’s Partnership Agreement Blocks Vendors from Fighting Indirect Access
Executive Summary
- Understanding the SAP partnership system is necessary to how SAP controls both partners and their customers.
- This story of the partnership is hidden from view in media.
Introduction to How SAP Controls its Partner Network
At Brightwork, we have written quite a few articles on SAP implementation of Type 2 indirect access.
In this article, we will cover how constrained software vendors are both official SAP partners and victims of SAP’s indirect access campaign due to their partnership agreement with SAP.
Our References for This Article
If you want to see our references for this article and other related Brightwork articles, see this link.
Notice of Lack of Financial Bias: We have no financial ties to SAP or any other entity mentioned in this article.
- This is published by a research entity, not some lowbrow entity that is part of the SAP ecosystem.
- Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department. As you are reading this article, consider how rare this is. The vast majority of information on the Internet on SAP is provided by SAP, which is filled with false claims and sleazy consulting companies and SAP consultants who will tell any lie for personal benefit. Furthermore, SAP pays off all IT analysts -- who have the same concern for accuracy as SAP. Not one of these entities will disclose their pro-SAP financial bias to their readers.
Understanding the Partnership System
We are the only entity to have published on how the SAP partnership program works in reality versus the standard explanation of how it works.
The SAP partnership program is presented as a happy co-agreement between other software vendors and SAP designed to help best serve customers. This is an entirely inaccurate explanation of what the partnership agreement is. But before we get into that topic, let us point out an important point of distinction to not lump in consulting partners with software partners.
Consulting Partners Versus Software Partners
Consulting partners have very different incentives and relationships with SAP than software partners. For this article, we will be focusing on SAP’s software partners. SAP does not treat its consulting partners how they treat their software partners, and the consulting partner relationship is far more mutually beneficial. (although it is bad for customers — which is a different topic area) Software partnership with SAP is a particular subcategory of being an SAP partner.
The Real Story on SAP and Software Partnership
Sometimes the partnerships are called the “SAP community.” The one question never asked is why the SAP software community even exists. If we think it through, in a regular competitive software market, there would be no necessity for a system where vendors receive approval and certification from SAP. Remember, any system can be connected to any other system.
There is no need for the larger vendor to approve integration to its applications from other vendors.
Indeed, SAP is not a normal or ecosystem.
SAP’s Partnership Strategy
A primary strategy of SAP has been to tell its customers that integration to SAP is complicated. (this is something that SAP’s consulting partners also repeat) This means that many customers who already own SAP will often not purchase software from another vendor unless they are certified. This is the trick that gives SAP so much power over its vendors.
The requirement for certification is a racket. A racket is the pre-meditated creation of a problem from which the entity creating the scenario then offers the solution. The conundrum is the problems integrating to SAP. The solution is SAP’s “certification.”
This certification is meaningless technically but very meaningful to corporate buyers as it gives them false peace of mind that systems will integrate to SAP.
SAP’s blessing or certification does not mean that the adapter between SAP and the other vendor’s application does much more than pass a single field between the systems. The entire software certification offered by SAP is a formality into which SAP invests minimal effort.
The vital component of partnership for SAP is to get the partner to sign its partnership agreement.
The Partnership Contract
SAP offers a partnership contract to its prospective software partner. This contract limits what the partner software vendor can say about SAP. SAP enforces the control of the partnership contract through the threat of removing the vendor’s partnership status.
The details are covered in the article the How to Best Understand the Pitfalls of SAP’s Partnership Agreement.
Vendors are silent, even as SAP victimizes them on indirect access (see the section on indirect access in this document). There are other topics related to how SAP can get vendors to alter their marketing vis-a-vis SAP through partnership. SAP demands that the partner vendors describe their applications as complementary to SAP’s applications rather than competitive (even though the applications are competitive and not complimentary). SAP effectively gets SAP partner vendors to market against their strengths. To administer this program, SAP has a partnership management group. This group effectively manipulates software vendors to work in their worst interests.
Silencing Software Vendors
As I have pointed out on several previous occasions, the US has been backsliding on much of the regulation that it had at one time. Over the past several decades, companies have concentrated power as elite institutions like the University of Chicago and Harvard have aggressively undermined antitrust laws.
SAP’s Vendor Partnership Agreements as a Highly Effective Anti-Competitive Tool
The SAP partnership program is highly deceptive. It allows SAP to control software vendors that it should have to compete against. The program also deceives customers into believing they receive value in return for vendor certification. Again, SAP invests minimal effort into validating any adapters created by vendors. It creates another problem: SAP is not required to certify any particular vendor or vendor’s product. For example, Oracle’s database had a long history of being quickly certified for R/3 or ECC. As soon as SAP developed a competitive database in HANA, Oracle could no longer get its database certified for the new version of SAP’s ERP system S/4HANA. This is quite curious, as, in our research, we have found no evidence that HANA is superior to Oracle 12c or IBM Blu, as is covered in the article What is SAP HANA’s Actual Performance?
The most likely explanation is that SAP refuses to certify Oracle, IBM, or Microsoft for entirely commercial reasons, as is covered in the article SAP HANA Used to Block Out Other DB Vendors.
How the Partnership Program Limits the Speech of the Software Vendors
- Thus, I question whether the SAP partnership agreement is primarily an anticompetitive mechanism and a speech-limiting device.
- The outcome is that concerning SAP, the software partner gives up its 1st amendment rights (on the topic of SAP) as an independent entity.
These are serious claims indeed. But a question might arise do we see vendors who are SAP partners unwilling to publish information that shows them being better than the SAP applications and databases they are competing against?
Indeed this is what we find.
Either on vendor websites or in the IT media, SAP software partners are conscientious not to challenge SAP. SAP makes partners do ridiculous things, like including the trademark symbol when mentioning SAP.
Is SAP Only Able to Control Smaller Software Vendors?
It is not simply smaller software vendors that SAP has this power over. For example, SAP has released false information on its HANA database for years. Brightwork Research & Analysis was one of the only critics of the information SAP and SAP partners provided about HANA for years. I extensively analyzed every item promoted by SAP regarding HANA. I eventually found all of their claims except for one (which is that HANA can perform better for analytics, but what is untrue is that it can outperform competitive databases even in this area) to be inaccurate.
And IBM and Oracle, two giant vendors making the primary databases competing with HANA, have also been throttled from saying much that would contradict SAP’s false claims. However, IBM’s consulting practice makes a great deal of money on SAP consulting. Oracle has other financial benefits from partnering with SAP, so leaving the SAP partnership is not feasible, restricting their critique of HANA.
However, SAP’s claims were known to be false within both IBM and Oracle. I know this because I interacted with specialists within both companies and discussed this topic in depth. Things that I was able to publish at Brightwork Research & Analysis, IBM, Oracle, and others knew, but could not publish. Within a restricted area of criticism in the article, IBM Finally Begins to Fight Back.
That is the power of SAP’s and SAP’s partnership agreement. That is how far down the rabbit hole goes.
Loss of Freedom of Speech on SAP and Indirect Access
Very few software vendors have said much publicly on indirect access. However, recently one software vendor has done this. This is only one vendor out of hundreds negatively impacted by SAP.
The vendor that is doing this is taking a chance by doing it. Still, this vendor has been careful to focus only on indirect access while praising SAP and the overall SAP community. The vendor’s story about SAP (outside of indirect access) is a fairytale. SAP never behaved in a manner abusive of its power before it began enforcing indirect access against SAP customers. It leaves out SAP’s overall history and focuses only on the abuse area that affects this vendor individually: indirect access.
This vendor even stated.
“where would we be without SAP?”
After a careful examination of this vendor’s media output on indirect access, it appears this is because the vendor has the partnership with SAP as a limitation on their criticism. Plus, the other areas of SAP’s abuse don’t affect them, so why point them out?
They are restricted from freedom of speech by SAP but are acting as if they aren’t.
Praising Stalin?
While often cursing SAP in private one-on-one conversations with me, SAP partners’ vendors perform a quick about-face when discussing anything publicly.
In public, they demonstrate fealty to SAP; they support incorrect assertions made by SAP. This shows the degree of control that SAP marketing exerts over these vendors. They, in essence, have a type of Stockholm Syndrome, at least in public statements.
It is difficult to forget this photo with Saddam Hussian from the first Gulf War. This is similar to how vendors react when faced with being put in a position to contradict SAP.
It is important to keep up appearances.
We have correlated some statements made by SAP consultants and vendors that show a pattern to another historical antecedent through recent research.
“Everybody had to praise Stalin, all the time. Newspapers credited him with every success. Poets thanked him for bringing the harvest. People leaped to their feet to applaud every time his name was mentioned. His picture was everywhere parents taught their children to love Stalin more than themselves. They dared not do anything else.” – BBC
This should sound familiar to anyone who has listened to declarations of how “innovative” SAP is.
SAP is credited with many things it has never done and values it never embodied, not only by its marketing department but also by outside entities.
This is not because it is true but because of the following reasons:
- The entity is either paid by SAP (as in ComputerWeekly, Forbes, etc..)
- Because the entity made a great deal of money from SAP (Deloitte, Accenture, independent SAP consultants)
- Because the entity fears SAP (or has some partnership agreement with SAP).
I could provide many examples, but many platitudes commonly offered about SAP are false. They are regularly repeated by people who have never researched them and repeat things they heard from someplace. If we look at SAP consultancies, they not only repeat false platitudes about SAP to their clients but also actively try to keep indirect access as quiet as possible.
Why?
Hiding Indirect Access Issues from Customers
Talking about indirect access is bad for their business, and their business is billing hours for SAP consultants at the highest possible margins.
On several companies where SAP was not yet installed but SAP was being analyzed as a new purchase, I learned that the prospect found out about the indirect access and SAP from the competing vendor. That is not from the consulting company advising them (and that wanted them to select SAP). This is a concerted effort by SAP consulting companies to do this and another reason why SAP consulting companies act more as sales arms of SAP than as independent advisors to their “clients.”
The entire system acts as a giant echo chamber as SAP consulting companies repeat pro-SAP statements, paid-off IT media, and IT analysts repeat pro-SAP statements. Now through partnership agreements, even competing vendors repeat pro-SAP statements.
People who do not have the time to engage in research projects and do not study these statements in detail are likely to assume that these statements must be true since there appears to be a consensus. And that, of course, is the point.
Occasionally a point is made in a different subject matter area that applies perfectly to the present subject area and it would be a loss to leave it out.
The following is a quotation from the progressive economist Richard Wolff.
“We are a country that questions the systems of our society. We debate our school system, we debate our transportation system, why we even got off the last couple of years debating things like health insurance and what marriage is.
But when it comes to capitalism there is no debate. Look at the records of the US Congress for 50 years. Try to find a debate about the strengths and weaknesses of capitalism. You won’t find it. We treat capitalism as beyond debate. You can’t ask the obvious questions like what are its strengths and what are its weaknesses.
And like any system sprared debate, it becomes possible for it to indulge its worst tendencies. We strengthen a society by debating its systems. We don’t do ourselves any favor by exempting capitalism.” – Richard Wolff
It would seem that if the term “capitalism” were removed and replaced with “SAP” in each instance in the quotation above, the paragraphs would be equally true.
Who Creates Fake Histories?
We know that Stalin would create fake history, where Stalin was exalted somehow and his accomplishments exaggerated. SAP does the same thing. SAP is the only vendor that created a wholly fabricated explanation for how a product was developed to exaggerate its co-founder’s accomplishments. That is the false storyline that Hasso Plattner invented, HANA. This is covered in the article Did Hasso Plattner and PhDs Invent HANA?
Media entities paid by SAP repeated this story ad nauseam without ever checking if it was true. This story is important because it shows that SAP’s statements about Hasso and HANA are impossible and a premeditated attempt to create a false history. Furthermore, this worked.
Conclusion
Let us review what has been laid out in this article.
- Nearly all software vendors are silent on SAP’s indirect access. This helps SAP normalize type 2 indirect access by controlling IT media and consulting companies and false fronts like ASUG (the SAP User Group).
- A software vendor fighting back publicly against SAP is a good thing, but one cannot drive to a truthful conclusion by hiding details about SAP because they do not happen to serve your particular cause. When an entity challenges SAP but then hides details or alters other details to keep from fully challenging them (because they have a pre-existing partnership agreement), this is self-censoring.
Keeping the Criticism Narrow!
The IT media entity paid by SAP (which is nearly all of IT media) is much more willing to pick up quotations from another entity that restricts criticism to a very narrow range because they are looking not to offend their sponsor.
In this case, the IT media entity and the software vendor hide their bias from the reader. In contrast, in most cases, the reader believes they are getting information from unbiased sources.
Interestingly, almost every entity that serves as an information source on SAP has some identifiable financial bias or partnership agreement with SAP. When I articulated this connection, I am often told that
“Everyone has a bias, “
and that
“Informed readers can discern the difference.”
This is quite curious because this does not seem to be the case. These supposedly “informed readers” are routinely tricked by financially biased stories by SAP. How is Forbes’s reader to know that most of the articles that Forbes writes about SAP are paid placements? That is, the article was paid for SAP but is not declared as an advertisement. How should the reader figure that out exactly?
These responses are merely excuses used to defend against bias and the dishonest presentation of information. This should be indefensible and used by a person or entity with this easily traceable bias. In fact, every single person who has used this argument has turned out to have their financial connection back to SAP.
People that don’t have such a connection do not use this argument with me.
Ordinary Bias — as in a Preference-Based on Experience or a Financial Bias?
The use of the phrase.
“Everyone has a bias.”
It attempts to conflate the normal biases that a person or entity has regarding life experience, professional experience, or generalized views with specific, traceable financial bias. No one is saying that people do not have a right to like chocolate ice cream. That is not a bias. That is a preference. If someone is being paid to promote chocolate ice cream, they have a financial bias. The question is whether people promote chocolate ice cream and promote it so aggressively if they were not paid to do so.
I don’t even waste time analyzing people’s other biases.
Why?
Because economic bias already provides all the information that necessary to understand why people misrepresent and self-censor.
This is the problem with what the partnership agreements and what they do to software vendors’ ability to fight back against SAP or even tell the truth about SAP’s history.
The Bottom Line With SAP Partnerships
SAP partnership agreements are anti-competitive tools, and it means the competing vendor loses freedom of speech concerning SAP and indirect access.
The Problem: Secrecy Around Indirect Access
Oracle, SAP, and their consulting partners, ASUG, and the IT media entities all have something in common. They don’t want indirect access understood. Media outlets like Diginomica are paid to distribute PR releases as articles, as we covered in the article SAP’s Recycled Indirect Access Damage Control for 2018. The intent is to lower SAP customers’ concern around indirect access so that indirect access is underestimated, as we covered in the article The Danger in Underestimating SAP Indirect Access.
The primary information providers in the SAP space are all financially linked to SAP. SAP does not want indirect access understood, so these entities do as SAP tells them.