HANA has been subject to one of the most expensive media campaigns in the history of any enterprise software vendor. More evidence is coming to light as to why SAP wants its customers to purchase HANA so badly. This is because HANA puts SAP in the catbird seat for account control of its clients. Therefore, SAP will do anything to get HANA into accounts. This includes misrepresenting HANA’s costs. For instance, SAP has doctored the information the database sizing (HANA is priced per GB), exaggerating performance benefits, etc.
Now let us get into the why SAP wants HANA in accounts so badly and how it fits into SAP’s strategy of account control.
Information From Actual Accounts on Strange SAP Indirect Access Charges
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 very 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 if it is copyright protection, but the way it is often treated by SAP, it is an enlargement of copyright protection. Moreover, almost undiscussed in a published form, indirect access is used by large vendors to block out smaller vendors. Indirect access is, therefore, a kind of account control. Moreover, like any technique of account, control, indirect access is designed to point as many IT expenditures as possible back to the large IT vendor.
I do not know any of the smaller vendors that try to pull indirect access over on their customers. SAP is setting precedents that other vendors on the same client begin to ponder.
Once a customer buys HANA, the other database vendor learns of what SAP’s indirect access position. The other database vendor starts to think.
“What if I can get away with pulling indirect access on all the databases that I have already sold to the account!”
The Basis for Indirect Access in Law
It is important to understand that SAP places indirect access rules that are not necessarily legally enforceable. SAP is enlarging the definition to indirect access to suit its purposes and hoping the indirect access cases are not taken to court, so they do not become part of the public record. Once part of the public record, they can be looked up by other companies and then the cat is out of the bag.
Therefore, SAP essentially has a “bluffing position” when it comes to the law overall (on many topics actually), and indirect access is just another example of this. This legal boundary pushing has become a consistent viewpoint shared among the largest multinationals. For instance.
1. Apple keeps its profits money from manufacturing overseas, so it does not have to pay tax.
2. Starbucks paid less than 1% in taxes in Europe.
3. Infosys inserts a clause in its employment contract that requires cases against Infosys to be taken to a hand picked Infosys arbitration firm instead of using US courts.
Thus In addition to being able to raise capital far more efficiently than smaller entities, the largest entities increasingly claim the right to operate under a different standard of laws than everyone else.
Therefore, the size of companies always presents a problem for the natural things that are supposed to constrain them. This was the very basis of anti-trust legislation in the US. That concept has been watered down and mostly lost since 1890.
SAP’s Constant Legal Boundary Pushing
In the example of SAP, if you want to push the issue beyond negotiation, you have to litigate their legal terms. Moreover, SAP has a way of making litigation quite expensive. However, litigating against a powerful entity can also be performed with something called a class action lawsuit in the US. A class action lawsuit allows many entities to dispute as a group against much more powerful opponents. The movie Erin Brockovich does an excellent job of explaining how this works.
However, how SAP customers would find out about other aggrieved parties would be tricky. The American SAP user group or ASUG would be in a good position to do this. However, ASUG lacks independence from SAP. Therefore they will not do this. One commenter on this post included some articles from ASUG on indirect access, but ASUG waters down concerns from users. I will give ASUG credit for at least publishing on the topic of indirect access, but the review of material on ASUG’s website demonstrates a clear bias towards SAP. ASUG will not touch issues like the decline of SAP’s support. Moreover, ASUG events have degenerated from true user conferences to just another place that SAP’s products are pitched.
If SAP can convince some companies into thinking that its clauses are consistent with US law, then the evidence shows that they will do this. If the customer knows more about indirect access, then they are always in a better position to get a better deal and to be treated better.
SAP is mostly looking for soft targets. Companies that have not done their research on indirect access, and where SAP can trick them into accepting SAP’s interpretation of the law. The customer’s internal council can be queried, but they should be expected to have much expertise in indirect access.
Remember that in some cases the information about indirect access is coming from SAP account executives, who are briefed by SAP. They are merely repeating what they have been told in the SAP sales training material. They would not have any idea as to its legality and are not trained or incentivized to question any information they are provided by SAP. Therefore, it is more likely than not that the account executive will present details on indirect access with high confidence, But this does not necessarily relate to the actual legal support for SAP’s claims.
The Timing of Receiving Indirect Access Information
SAP wants to push the awareness regarding indirect access to as late as possible in the process. This is reinforced by a quote from back in 2012.
The survey results are now in, and Blake recently shared some data points with ASUGNews.com. In general, the results demonstrate that.
“SAP is not doing a good job of educating their customers on this concept and what it means,”
“It reinforces why customers who have this issue — those customers who have had it brought to their attention — are completely caught off guard.”
However, of course. You do not want to “educate” people if you can have them buy under one set of assumptions, and then come to them later with a bunch of SAP indirect access charges. A typical time to do this is during a SAP software license audit.
SAP’s Inconsistency on Indirect Access
The inconsistency of SAP’s position on SAP indirect access is shown further in the scenario we are about to cover.
SAP is enforcing very strict and strange restrictions on what companies can do with the data in a HANA database. Do pay special attention to these terms laid out by SAP regarding extracting data from HANA.
- SAP’s position is that that the client must use SAP Data Services.
- However, the use of SAP Data Services can be waived if the second instance of HANA is used, and the data is replicated to the second instance of HANA.
A few questions naturally arise.
- Why is the second instance of HANA required?
- If HANA cannot be technically or from a license perspective have data extracted from it, why does a purchase of a second HANA database change that fact?
- What are the cost implications of all of this?
- What about the database that may be on the receiving end of this data? As it is assumed SAP would allow the data to be moved to another HANA instance, does this also serve to box out the other database vendor that is receiving the data?
The Great Limitations on HANA’s Flexibility and Usage
If a company buys HANA, it will be a big surprise to them that they cannot access it as a normal database. This means that customers need clarity on what the restrictions are on HANA before they purchase HANA.
A copy of HANA will, unless the database is very small, be quite expensive. SAP offers that the client can use SAP Data Services, but what if the customer does like want to buy SAP Data Services? SAP has a poor history providing integration tools. SAP’s primary integration product is SAP XI/PI. It is rare even to see SAP XI/PI on projects now, and the application not considered competitive with other ETL tools.
Now, I have not used SAP Data Service, but in this regards, I am in good company. Based upon this history, it is very unlikely that it will be of good enough quality to justify purchasing it. Moreover, SAP should not dictate which integration products SAP customers to purchase, based upon looney rules with little legal merit on removing data from SAP’s database.
More HANA Means More Restrictions
This much is clear.
SAP wants to use restrictions to push everything over to more SAP products.
- By tying S/4 to HANA, they current restrict S/4 to HANA.
- Once they have HANA at a customer, they want to dictate the integration product of SAP Data Services because HANA is used.
SAP is clearly showing what its real intent is with HANA. The talk may be all about benefits, TCO (which is a ridiculous proposal), and future directions, but what is undiscussed is how HANA allows SAP to apply more SAP indirect access rules to the data layer.
This means that the costs of HANA are far more than simply the cost of purchasing, implementing and maintaining HANA. There is all manner of SAP indirect access cost implications.
A Company’s Options
Buying SAP Data Services is probably not on a very good option for companies. However, if companies do not buy SAP Data Services, will they want to go the expensive route of buying another HANA instance? Understand, if the company keeps the SAP application on a non-HANA database, it does not have to replicate the data to another database or buy SAP Data Services. Therefore, but moving to HANA, the company’s options narrow and the costs dramatically increase. This is interesting because SAP has made so much about HANA reducing TCO. In this scenario, it seems like the TCO can only go up.
The fact that the second license of HANA renders a purchase of SAP Data Services unnecessary completely undermines any SAP indirect access argument. Let us think this through.
How can SAP indirect access apply, but if a second HANA database is obtained, then SAP indirect access does not apply?
Say what SAP?
HANA is part of an overarching strategy to infiltrate the database layer with all kinds of SAP products. It all starts with the lie that no other database on the planet can match HANA’s performance. This lie is repeated most vociferously by people who know the least about databases. I find it amazing how many people who have never touched a database in their life and who work in a sales capacity like to repeat statements from SAP marketing literature to me on how revolutionary HANA’s database is. The message seems to be that I need to accept, and we all need to accept, the proposals by SAP Marketing, a group of people who have no earthly idea what they are talking about.
The argument to be made is that only SAP database products work with SAP. This scenario is just an extension of this strategy, which is to put in some extra license restrictions (potentially) that again drive more money to SAP products.
This is so obviously anti-competitive, I view with suspicion people that try to defend it. Some people that do support it do an excellent job of bringing up different scenarios that can effectively cloud the issue.
The sort of a textbook case of SAP indirect access is where a front end is used to access data sitting that was generated by a SAP application. Since users are now accessing the data, but not through SAP, SAP is “being cheated out” of license revenues.
However, companies normally do not do this. They typically don’t create full applications to connect to SAP data. That is they do not often engage in what is called two-way communication with the data. Instead, they with far higher frequency pull data from SAP (that is one-way communication). They create reports that use SAP data. However, it is hard to say that creating a report using SAP data that can be shared outside of the named user licenses is “using” the application.
Furthermore, people have been exporting data from SAP for time immemorial. The reason being that SAP has never had good reporting tools within their applications, and it is tough to compete with a spreadsheet. Even with Tableau on the scene, which has very good report building capability, it is rare to see Tableau up on people’s computers. Instead of Tableau, I see good old fashioned Excel. For all of its press, Tableau often becomes a toy for IT which allows them to build up their resume, but which often ends up being little used by the actual business.
Under the SAP indirect access logic, every single export into a spreadsheet is also cheating SAP out of revenues. Alternatively, for Microsoft, if I create a spreadsheet in Excel, and then export the data to a CSV file, which I then send to someone who opens it in a text editor, I am performing indirect access to Excel.
Moreover, this logic brings up an even weirder foundational assumption — — which is that SAP owns your data and that you need to pay a toll every time you access it through a non-SAP system. Who would buy an application or database under those conditions?
Secondly, as this is a relatively recent concept, companies bought their SAP systems under one set of assumptions, only to have SAP introduce indirect access after the fact, changing the rules of systems that have already been purchased.
SAP relies upon compliant entities like the big consulting companies and compliant media that are in some shape or form on SAP’s payroll to keep other customers from finding out about these types of things. IBM Accenture and others will keep this hidden as long as possible because they want the implementation business. They will tell you how great HANA is but are contractually obligated to need messaging to SAP. While IBM as no fiduciary responsibility to its customers, it does have a partnership responsibility to SAP. It is curious, but in all the projects I have worked with IBM, Accenture, and others, the only interests aside from their own I have ever seen them respect is SAP’s. But never their actual customers.
Since major consulting companies or media outlets can be relied upon to be silent (called being a good or compliant SAP partner), and SAP will spring this on customers at the time of their choosing. But if this has happened to you or your client, please do comment.
If you have information to share, reach out to me to discuss, and any information shared with me is protected and is confidential.
Also, I have started up a Patreon supported entity called Reasonableness in Indirect Access
That fights against enlarged indirect access rules supported by the largest vendors. If you are a vendor that faces block out due to indirect access, you should consider supporting the newly formed entity. The benefits include supporting efforts in the area, which means more coverage as well as information sharing.
Shaun Snapp is the author of many books on technology and SAP. He is the Managing Editor of Brightwork Research & Analysis. Brightwork is focused on publishing storylines that do not have a way of getting out through the traditional mediums in enterprise software.
I cover indirect access specifically in this article.