Should Customers Charge Indirect Access Fees to SAP?

ByPrimary Researcher

Executive Summary

  • SAP charges customers indirect access for connecting to their systems.
  • If SAP can charge customer’s indirect access, can SAP be charged indirect access to connect to the customer’s legacy?

Introduction

Indirect access is when a software vendor charges to access the data that is stored in their system. The concept is still relatively new and tends to only apply to powerful software companies that have products already installed at companies. SAP customers do not typically find out about indirect access restrictions during the sales process. Indirect access is presented as copyright protection, but the way it is often treated by SAP is an enlargement of copyright protection. Moreover, almost undiscussed in a published form, large vendors use indirect access to block out smaller vendors. Indirect access is, therefore, a kind of account control. Moreover, like any account control technique, indirect access is designed to point as many IT expenditures as possible back to the large IT vendor.

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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. 

SAP Charges for Access

I was recently sent this comment from someone that works for SAP.

“If I am connecting to the SAP ERP system and extracting data that the ERP system’s application logic has captured, manipulated and stored then am I not using the fruits of the IP that SAP have developed? I nice, ‘clean’, structured repository of customer data. That data would not exist if SAP IP was not there. If that is the case then I am still using the result of SAP’s IP. If that is the case then shouldn’t SAP be compensated for that use?”

This is from an employee of SAP who in no way sets policy. This is a good representation of how SAP views the right to charge customers to access their data when an SAP application manages it.

SAP, the Zsa Zsa Gabor of Software Vendors

SAP is the Zsa Zsa Gabor of software companies. Zsa Zsa Gabor was a Hollywood starlet and a highly accomplished gold digger.

Zsa Zsa Gabor was one to have famously remarked that.

I am a marvelous housekeeper. Every time I leave a man, I keep his house.

I never hated a man enough to give him his diamonds back.

A man in love is incomplete until he has married. Then he’s finished.

I bring this up because understanding the mind of an entitled gold digger is an excellent background to understanding the psychology of SAP. If you speak with many people who work for SAP, you get the distinct impression that they feel they are owed a certain amount of revenue from their customers. SAP is now in the legacy stage of its lifecycle. However, through one mechanism or another, SAP expects its customers to maintain them in the “lifestyle to which they have become accustomed.”

SAP is Successful Because of Good Software?

People who work for SAP tend to be quite confused about the nature or reasons for SAP’s financial success. SAP is successful because of all the software vendors; it was the most successful in corrupting the advisement function of the large consulting companies. SAP figured out early on.

This insulates SAP from the competition. This means that no matter how uncompetitive SAP’s applications, IBM, Deloitte, Accenture, and many others will fall all over themselves to recommend SAP’s applications to customers. This is because SAP allows their consulting partners to do virtually all of the consulting. SAP’s consulting division represents only around 3% of the company’s revenues.

And it should be noted that no other software vendor is close in this regard.

Oracle is another mega-vendor.

But Oracle does not have anything near the lock-in from the major consulting companies than does SAP. Each of the major consulting companies has Oracle practices. However, they are much smaller in revenues and headcount than the SAP divisions within these same companies. For consulting companies generally, there is no other software vendor that you can make as much money on as specializing in SAP.

Charging SAP for Indirect Access

SAP increasingly believes that its customers owe it license revenue for only connecting another application to SAP’s applications. Sap does not pay its clients a fee for connecting to its legacy applications. This seems unfair. So what needs to be added to future SAP contracts is indirect access fees to client legacy applications.