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SAP licensing – reassuringly expensive?

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SAP’s recent settlement with AB InBev has again put audits and licensing under the spotlight. We look at how to get the best value and avoid fines

As someone who follows the software licensing market and who is also partial to the odd pint of Stella Artois, I have been following the AB InBev versus SAP case with considerable interest.

Anheuser-Busch InBev is the world’s biggest brewer, with more than 500 brands including Budweiser, Corona, Stella Artois and Becks, plus more modern tipples such as Camden Town Brewery.

We learnt last week that AB InBev settled out of court with SAP in their $600m indirect licensing dispute. Six hundred million is such an enormous figure, what does it really mean to a brewer like AB InBev?

It’s not uncommon for IT projects to be cut and IT heads to roll after a painful audit fine, but will $600m register on the radar of an international lager monster? I would say so, yes.

To put it into context, $600m on AB InBev’s 2017 revenue of $56.4bn is the equivalent of an IT manager on £40,000 a year getting a speeding fine for £8,000. Ouch!

Assuming AB InBev makes a profit margin of 20%, $600m would wipe off one-fifth of its annual pre-tax profit. That would hit share price, jobs, the IT department and, gulp, the price of a pint of Stella!

So what can be done in the face of such risk? There are six steps I would recommend organisations take to address the risk of SAP indirect licensing.

First, this risk is too important to wait for SAP or SAP user groups to act. SAP says “we’re listening” and SAP user groups say “we’re working on it”. This issue takes leadership. Grab it by the scruff of the neck and drive a resolution. Getting a handle on SAP will reap dividends way beyond SAP licensing, as discussed below.

Next, appreciate that audits and licence disputes are not about compliance – they are about market share. Every minute you spend squabbling with Microsoft, SAP, IBM, Oracle, Micro Focus and other software dinosaurs, you are not spending your valuable time innovating, pushing your business forward and exploring more suitable competitors.

Complex licensing and audits have many negatives, but the main one is a great big time suck. Software audits are foreplay – they ensure your time is spent with them rather than exploring more suitable competitors.

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Article Credit: CW

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