THE VARIOUS TYPES OF SAP LICENSES

The SAP Licensing model is considered to be among the most complex and confusing in the generally bewildering area of software licensing. While many software vendors typically calculate their license fees by counting the number of active and inactive users, or by considering the number of servers and CPUs, SAP defines licenses according to usage — without really examining usage — an omission that may well be the root cause of the confusion. Adding to the lack of clarity are the issues related to “named users” – the basic unit of the SAP licensing model. For example, there are no real names behind named users — and, a named user can have multiple usernames in different systems. This article will describe the basic SAP licensing model, its difficulties, and how SAP customers typically handle the issue of licensing. In order to keep it simple, we will not include a discussion of “engines” (e.g., payroll, etc.), which are additional components that are charged separately, on top of the basic licensing fees.

• 1. The Various Types of SAP Licenses SAP® is a registered trademark of SAP AG in Germany and in several other countries Created by Xpandion Educational Presentation
• 2. Moshe Panzer CEO, Xpandion Author
• 3. Ask the average SAP customer or novice SAP licensing consultant what SAP license types they know of, and they’ll probably answer “Professional,” “Limited Professional,” “Employee” and maybe “ESS” (Employee Self Service). But these aren’t all, thus this their negotiating power with SAP is limited. SAP® is a registered trademark of SAP AG in Germany and in several other countries
• 4. From our experience over the years with numerous licensing projects, we have seen many, many types of licenses. SAP® is a registered trademark of SAP AG in Germany and in several other countries
• 5. SAP license types are divided into three main categories: • Licenses for combined SAP applications • Licenses for individual, or separated, applications • External licenses for applications that were bought by SAP, but the license types remain as they were beforehand The Various SAP License Types SAP® is a registered trademark of SAP AG in Germany and in several other countries
• 6. “Classic” SAP customers fall under this category. User licenses such as “Professional,” “Limited Professional” and “Employee” are defined as global licenses for a suite of products like SAP ERP, SAP CRM, SAP BI, SAP APO. These are employee-based licenses, meaning the organization buys them for an employee and this employee can freely use multiple SAP products as long as the license type covers them. SAP® is a registered trademark of SAP AG in Germany and in several other countries Licenses for Combined SAP Applications
• 7. Licenses for Individual or Separated Applications Some SAP customers need additional licenses to use a specific application. For example, if many external employees use a portal, it would be a waste to buy global licenses for them. Instead, the organization would buy a license for the portal itself and give it to each employee. SAP® is a registered trademark of SAP AG in Germany and in several other countries
• 8. This category belongs to customers who migrated to SAP after SAP had bought the company or application that they were using. This often happens with BusinessObjects customers. In some cases, current customers who want to buy applications that were recently purchased by SAP are also required to obey the migrated licenses until SAP includes them in regular license types. SAP® is a registered trademark of SAP AG in Germany and in several other countries External Licenses for Applications That Were Bought by SAP, But The License Types Remain as They Were Beforehand
• 9. For a complete overview of the different SAP license types, refer to SAP’s official guide and Xpandion’s SAP Licensing Quick Guide. SAP Licensing Quick Guide click here SAP Official Guide click here SAP® is a registered trademark of SAP AG in Germany and in several other countries
• 10. Some use specially created license types like “Manager,” “Top-User” and “Safety.” These license types were “invented” by the local SAP office and aren’t official SAP license types. You can’t find definitions for them in SAP documentation and if you have them in your organization, check that they are clearly defined. An example of a good definition is something like: ““Top-User will be the license type of an employee who uses one of all the SAP systems above 10,000 dialog steps per month.” When the definition of a specially created license type is clear, nobody can argue with it and you can even buy more if your company is expanding and needs extra licenses. SAP® is a registered trademark of SAP AG in Germany and in several other countries “Specially Tailored” License Types
• 11. From the SAP System Measurement Guide, Version 7.0: “Named users are also upstream and intermediary technical systems that exchange information with the SAP software system, as well as the users of those systems, if the users exchange information with the SAP software in dialog or prompt mode. It makes no difference whether the software is accessed directly or indirectly.” Since 2013, SAP has been much more sensitive about indirect use and looks for it more thoroughly during the annual audit. You must identify indirect use and count it in your licensing quota. SAP® is a registered trademark of SAP AG in Germany and in several other countries Beware of Indirect Use
• 12. In October of 2013, German court ruled that SAP cannot restrict software resale citing that their terms and conditions are anti-competitive. This will make big changes in the way people use their SAP licensing and overall licensing budget for obvious reasons. SAP® is a registered trademark of SAP AG in Germany and in several other countries Are You Allowed to Re-sell Unused Licenses?
• 13. If you need to buy licenses from SAP, know that there are more license types beyond the common ones. Furthermore, remember that in certain cases your local SAP representative can tailor a special license for your situation. Don’t make the mistake of thinking that everything’s set beforehand or that you are locked into only buying brand new. Negotiate Better SAP® is a registered trademark of SAP AG in Germany and in several other countries
• 14. SAP® is a registered trademark of SAP AG in Germany and in several other countries Re-inspect & Optimize If you are currently in, or close to, an SAP licensing audit, you might want to re-inspect your inventory to find unsuitable license types. Remember that an unused license is a total waste, and unsuitable license types can result in extra expenses. Your licensing schema should fit your needs perfectly and support your business requirements and future plans.
• 15. SAP® is a registered trademark of SAP AG in Germany and in several other countries Xpandion is the leading provider of license optimization software solutions for SAP. 

Source: The Various Types of SAP Licenses

Source: Licensing SAP Software: A Guide for Buyers