Cost, complexity and value

A full 95% of SAP ERP users believe that the software giant's licensing policy is too complicated. Hardly surprising, but that's chief among the findings of a survey released by the UK & Ireland SAP User Group. Its study also suggests that users want to see greater transparency of licensing costs. Indeed, 88% believe that SAP should make its price list public. If asked, it's likely that users of others' ERP systems might say much the same. Both points are inextricably interlinked. In the end, manufacturers want to know they're getting what they pay for, and that the price is reasonable, given the changing nature of IT deployments. In SAP's case, the issue is essentially twofold: SAP, as by far the most prolific software developer, has a very large catalogue, with multiple licensing models and different usage limits; but also some modules can be installed automatically. Both mean that users can find themselves paying for software they aren't using. As Philip Adams, vice chairman of the UK & Ireland SAP User Group, says: "This is an issue facing a lot of software vendors and their customers, as many licence terms were agreed at a time when workforces were larger and the vast majority of deployments were on-premise." But times have changed and, given today's straitened and less predictable times, IT users of all stripes need a clearer and a more granular approach to ensuring software licence value. And there's more. The SAP User Group study also finds that IT managers want greater licensing flexibility. As staff numbers rise or reduce, or usage patterns change, they want to be able to reflect these changes in their support costs – again, so they only pay for what they use. Similarly, they want reasonable charges for entry-level access to extra modules. If you're deploying specific functionality to a small group, you don't expect to be clobbered by the organisation that calls itself your software partner. Further, as organisations choose to work with external services providers, while more of their own users are necessarily touched by ERP, there is a case for asking SAP and others to get away from the old 'named use' licensing approach and offer a concurrent use pricing model. Time to start asking some questions and demanding answers.