Category Archives for "ASUG"

The Danger in Underestimating SAP Indirect Access

 What This Article Covers

  • What SAP Would Like Customers to Believe
  • The Real Use of Indirect Access
  • Listening to ASUG on the Frequency of Indirect Access Frequency
  • The Frequency of Indirect Access
  • The Size of Indirect Access Claims

Introduction

Indirect access tends to only be known companies that have not been subject to an indirect access claim when a major indirect access (IA) public event occurs, such as a court case documents being filed. Good examples of this are Diageo and InBev. However, what is the prevalence of indirect access?

In this article, we will discuss information that has been coming in from the field. But first, we will begin with what SAP would like their customers to believe about the prevalence of indirect access. 

What SAP and SAP Consulting Partners Would Like Customers to Believe

Generally, both SAP and the SAP consulting partners would prefer that their customers do not know anything about indirect access. It is amusing to see IBM, Deloitte or Accenture comment on how to manage indirect access, a consulting company that has a partner relationship with SAP may be able to run a SAM software project, but none can represent their client’s interests against SAP. Consulting companies to compete to see how to ingratiate themselves to SAP, they don’t dare risk offending them. As an example of a recent pursuit which the client was not told about indirect access and had to find out about it from a competing vendor. The customer asked the consulting company why they had not informed them of the indirect access liability.

How much does SAP want customers and prospects to lower their guard?

At SAPPHIRE SAP produced an announcement that was intended to assuage their customer’s concerns about indirect access.

I analyzed this announcement in the article How to Best Understand SAP’s Faux Policy Change on Indirect Access and concluded that it was really no change in policy aside from more specific charging of customers when SAP brings and indirect access claim. DSAG, which is the German SAP user group, and UpperEdge, were two of the only other media entities willing to call out SAP when they are wrong on indirect access, came to the same conclusion that I did on the announcement.

Since that article, I have learned that SAP will not even publish what it intends to charge per purchase order or sales order for indirect access, which was a major part of the announcement. Instead, SAP has stated that customers would be charged “on a case by case basis.” Of course, they will be. This increases the secrecy of the cost of indirect access. The announcement made it seem like SAP is opening up, but then when asked questions, SAP goes back into secrecy mode.

Listening to ASUG on the Frequency of Indirect Access?

ASUG, which is supposed to be a user group, but is actually a marketing arm of SAP, has been telling members that indirect access is rare and that it is merely the high-profile cases (such as Diageo and InBev) that push it to the forefront. This is covered in more detail in the article Is ASUG Lying About the Frequency of SAP Indirect Access? 

As ASUG is really just SAP in “sheep’s clothing” what we can take from ASUG’s stance, is that this is in fact what SAP wants customers to think about IA. I have never been in an SAP-ASUG meeting, but by the looks of it, they get together and SAP basically tells ASUG exactly what messages they want to relay, and ASUG relays those messages no questions asked.

All of this is curious, because ASUG members pay membership fees, and fly to ASUG conferences to be told information that is inaccurate, is 100% beneficial to SAP and to the customer’s disadvantage and is what SAP wants them to believe. ASUG cannot both represent the interests of SAP and of their members.

  • As I stated in the “Faux Policy Change Article,” SAP’s overall intent is to get its customers to lower their guard.
  • The less that their customers are prepared, the more SAP is able to use indirect access as a hammer against them.
  • Time is of the essence. SAP uses restricted timelines to get customers to acquiesce to their demands. The less preparatory work they have done before SAP drops an indirect access claim upon them, the more likely they will end up doing what SAP wants, and this is covered in the article The Time Issue Faced with Indirect Access.

The Reality of Indirect Access Frequency 

SAP has been quite effective with indirect access to drive license revenues, so they don’t have a very good reason to stop doing it. They are catching customers off guard and there is a very poor defense normally available to customers. And vendors that are affected by indirect access are uncoordinated. Essentially the issue is dealt with by individual account teams, that are in most cases not coordinated even within a single software vendor with respect to indirect access.

There are several other reasons for the success SAP is having against customers in indirect access.

  1. Source Issues and Finding Unbiased Representation: Many of the sources relied upon for information on indirect access have already aligned with or are in some way remotely controlled by SAP. This is covered in the article Taking a Multidimensional Approach to Indirect Access.
  2. Confusion with the Roll of Attorneys: Few attorneys know anything about indirect access. Unless the issue is going to court, and this is unlikely and unknown by anyone early in the process, unless the attorney already has a strong familiarity with indirect access, hiring an attorney is not going to help very much. There are several steps that do help. And keeping good notes is important whether an attorney is eventually contacted or whether they are not engaged. Secondly, bringing up attorneys that are unfamiliar with the topic is a lengthy process. If an indirect access claim is brought, time is of the essence in getting control over the situation.
  3. The Lack of SAM Software: Surprising as it may seem, most SAP customers still don’t use SAM software. So when SAP drops an indirect access claim on them, they aren’t even in a position to know what their overall license usage is or to know their specific indirect access exposure. SAM covers all usage measurement, indirect access being just one. Customers really don’t want to not have SAM software installed and then have to deal with both going through a SAM project, negotiating with the SAM vendor, then learning how SAM software reports look, all with SAP and an indirect access claim and their short timelines for response putting extra pressure on the company. SAM software and projects are measured in the hundreds of thousands and are good for more than just indirect access. Indirect access claims are measured in the millions, and sometimes tens of millions.

Indirect Access Frequency

The information I am getting from the field is that indirect access is actually increasing.

I have been tracking indirect access for around a year and a half. This is the point when vendors first started communicating to me that SAP would bring up the topic of indirect access charges as soon as it looked like the other vendor was about to get a contract from SAP.

And what is also interesting is that the indirect access issues brought up to me have been all over the spectrum of the different software categories. Although CRM does seem to be one of SAP’s favorite areas to bring indirect access claims. SAP seems to have an anger management issue when losing to Salesforce.

However, the outcome of these indirect access claims is normally the same. The customer is forced to purchase software from SAP it never wanted to purchase. When SAP reports sales to Wall Street it implies that 100% of them are voluntary. However, with SAP’s use of indirect access, and increasing percentage are sales motivated by indirect access claims.

The Size of Indirect Access Claims

The size of indirect access claims is also increasing. I am now learning of tens of millions of dollars in indirect access claims. I have individual case studies, but I do not want to publish the specific multiple of tens of millions. SAP benefits if these case studies are kept as secret as possible.

The size of these claims is changing behavior and is allowing SAP to win license sales that they had lost prior to bringing the claim.

I am working on research into indirect access which I will publish, and the announcement is described in this article. Vendors and customers that are impacted by indirect access have to share their story. The more that it is kept secret, the more SAP wins. If vendors fear reprisal by SAP, that is what anonymous sourcing is all about. I have yet to expose any source that I kept anonymously.

Conclusion

SAP is ramping up, not ramping down its indirect access claims against its customers, and the claim sizes are growing. One should not be lulled into a false sense of security by Bill McDermott’s happy face at SAPPHIRE on this topic. As I said previously, Bill McDermott was specifically chosen by Hasso Plattner, because he had a “happy face.” But McDermott’s pleasant demeanor is stark contrast to the hard edge I witness in SAP’s use of indirect access for many SAP customers.

SAP customers are receiving a large amount of inaccurate information from sources ranging from ASUG to Deloitte, to Diginomica and this is because so many entities in IT are in some way dependent upon SAP for their revenues. The money is very clearly on the side of agreeing with SAP. I was told by one reader recently to switch sides and to begin writing in favor of SAP, as the pay is much better.

Companies that are dependent on SAP for their revenues cannot be expected to write objectively or to provide objective advice about SAP. Other entities like JNC Consulting do not even seem to question (in their articles) whether the Type 2 indirect access employed by SAP is actually valid or its historical context.

All of this combined with the timelines imposed by SAP on indirect access claims means that the deck is firmly stacked in their favor. And one of the ways of keeping it this way is to underreport and de-emphasize what is really a widespread usage of indirect access.

Is ASUG Lying About the Frequency of SAP Indirect Access?

What This Article Covers

  • What SAP Would Like Customers to Think About AI
  • What is Indirect Access Frequency?
  • What are ASUG’s Incentives?

Introduction

I have critiqued ASUG in several previous articles such as ASUG’s Biased and Inaccurate Coverage of SAP Indirect Access. My observation of ASUG’s media output is that ASUG is uniformly repeating SAP’s marketing messaging, that it appears to have no independence from SAP whatsoever, and that it writes false information about SAP. This article will explain what has happened to ASUG. This article will cover what ASUG says about how frequently customers actually face an indirect access claim by SAP. But first, we need to get into what SAP would like customers to think about indirect access.

What SAP Would Like Customers to Think About IA

We don’t have to search very far to determine what SAP would like customers to think about indirect access. In the article How to Best Understand Faux Change on Indirect Access, I covered that SAP created their announcement as a way to make customers minimize their preparation regarding indirect access. I won’t go over the entire article, but in the conclusion, I stated the following:

SAP intends to mislead the SAP customer base into lowering their guard by making a few slight modifications to indirect access that may end up amounting to as close as possible to zero change in SAP’s enforcement of indirect access.

Therefore, it is clear that SAP does not want customers to worry their “pretty little head” about indirect access. And the reason for this is very simple. If customers do not prepare for indirect access, SAP can spring indirect access on their customers and receive less prepared pushback from customers. In fact, I concluded that the entire reason for the announcement on indirect access that occurred at SAPPHIRE was to make many customers that were concerned about it, become less concerned. The entire announcement did not do anything to reduce the concern that customers should have regarding indirect access but instead was worded in a way that it seemed like it did.

The Frequency of Indirect Access Claims

Apparently, when asked directly about indirect access, ASUG seems to have several answers.

  1. One is to state that few customers actually receive an indirect access claim, and the reason that customers have been hearing so much about it is that those scenarios tend to be “noisy.”
  2. Secondly, ASUG will offer their services as mediators if a customer faces an indirect access claim from SAP.

As for the second response, I cover that in the article on the “faux change to indirect access,” so I won’t repeat it here. But for the former answer, it is interesting how well this dovetails with what SAP would like customers to believe. This is a constant issue with ASUG that they state exactly what SAP wants to be stated. However, an independent entity would not perfectly match up with another entity on every single issue like this by chance. And it is well known that SAP uses ASUG as an outlet for publishing SAP marketing material. For example, if Brightwork were to suddenly begin to have talking points that are copied from the press releases of a software vendor on the website one would be right to question our independence. For this reason, we have ceased to see ASUG as having any independent voice from SAP.

Therefore, ASUG’s statements on any topic, can simply by seen as SAP’s statements on any topic, and there is no reason to assume that ASUG is filtering this message in any way.

Conclusion

We don’t know exactly how prevalent indirect access is. However, entities like ASUG and Deloitte or Accenture want indirect access to be as silent as possible. When Deloitte or Accenture are helping a company with a software selection, they do not inform their client of indirect access liabilities that come along with SAP. Why would they? It reduces the likelihood of the customer choosing SAP. And this is the problem with entities like ASUG and like Deloitte or Accenture. They pretend to represent the interests of their members or clients, but ultimately they are all simply tools of SAP.

References

The statements by ASUG on indirect access were brought by several anonymous sources that attended ASUG meetings on indirect access and that corroborate the statements made by ASUG.

The Time Issue When Faced with Indirect Access

What This Article Covers

  • ASUG Biase and Indirect Access
  • Tactics Used by SAP to Maximize The Payment
  • The Time Given by SAP to Respond to an Indirect Access Claim

Introduction

One is the interesting features of indirect access is that SAP does not actually want its customers to know about. And which of course all of the consulting companies help SAP hide from their clients. This is the feature of the time constraints that an indirect access claim by SAP will place on the customer.

Tactics Used by SAP to Maximize The Payment

SAP will analyze a company’s indirect access “liability” and will use several tactics in order to extract the most from the account. It uses several techniques. The first is a miscalculation of the indirect access “liability.” Whatever SAP estimates, one should be confident that the amount calculated by SAP is not actually the correct amount if the liability is calculated by an independent entity.

The Time Given by SAP to Respond to an Indirect Access Claim

The second tactic after lying to the customer about their liability, even under SAP’s extreme views of indirect access, is to put the customer under a time constraint. They give their customer a 2 to 3 weeks deadlines to respond. This, of course, puts the customer on the backfoot and really what is the relevance of this deadline. Clearly, this deadline is designed to pressure the customer. Customers that receive an indirect access claim will normally not be accustomed to dealing with such a claim. They will need to perform their own investigation and become educated on the indirect access issues in a very short time if they have not educated themselves on indirect access up to that point. And here is the point.

I often have companies reach out to me and ask if this or that is indirect access. Connecting any SAP system to any non-SAP system is indirect access. This means that every single SAP customer has indirect access liability. SAP does not bring indirect access claims against all of its customers. But the potential is always there. And what this means is that companies need to investigate the indirect access claim before they receive a claim, not afterward.

This is an issue that can cost a company millions, but if they are properly prepared for an indirect access claim, they can always reduce the claim. Remember the claim is designed to shock the customer into acquiescing as soon as possible. If possible, SAP would like to limit the client’s options to search for outside advice and will have a series of false assumptions that they would like the customer to accept regarding the validity of what I call Type 2 indirect access. Companies that they either control like ASUG or Diginomica have written articles that reinforce SAP’s proposals about indirect access. A previous article, ASUG’s Biased and Inaccurate Coverage on SAP Indirect Access covers one example of this. will then offer a menu of choices to their customer and an incentive to purchase quickly. In particular, they are interested in the customer purchasing either S/4HANA or HANA.

Conclusion

Actual implementation differs by account executive that the SAP customer has. However, SAP typically leverages of any knowledge gap in their customers in order to get the most money out of them. How SAP does this is substantially different from any other software vendor, because SAP has a vise like control over both the IT media entities as well as the large SAP consulting companies. This allows SAP to create a fictional reality that seems all encompassing. And SAP marketing is highly skilled in the distribution of misinformation in order to then later take advantage of that misinformation at great cost to its customers. In fact, SAP has the most sophisticated marketing department that we have ever analyzed in enterprise software. There is simply no other marketing department that is able to actually get customers to buy into its messaging, which is particularly impressive (or depressing depending upon whether you work for or compete against SAP) when one considers how poor in quality the information that SAP marketing provides, and how it can be discredited through historical research.

For example, in a recent announcement SAP specifically designed a release to make companies lower their guard. In the announcement, SAP gave nothing of substance to customers. But it was designed to appear as if they had. This is covered in the article the How to Best Understand SAP’s Faux Change on Indirect Access.

If you can convince people that something which is specifically designed to obscure a topic is actually designed to clarify it, that is message control of the highest order.