SAP introduces 'partial termination' of unwanted licences, cutting SAP user costs

Company still unwilling to allow 'licence parking', however

Software giant SAP has announced that users of its on-premise software solutions can now apply to "abandon usage rights" of "certain existing software licenses", and in doing so enjoy "corresponding maintenance termination" without having to purchase new on-premise replacement services.

As part of SAP's efforts to shift its customers to the cloud, the company announced back in July 2013 that users could start re-allocating licences to corresponding cloud solutions, but until now made no mention of allowing on-premise customers simply to terminate licences, despite user groups persistently campaigning for such a right.

SAP said that a request to part-terminate a licence "will lead to a re-discounting of the customer's individual maintenance base for the product family in which the reduction is requested. This will span across all contracts in which the product family is included.

"This re-discounting will be done based on volume list price discounts only."

However, SAP admitted that it "cannot predict the economic attractiveness of this model, as original contract terms may vary substantially. Customers will need to work directly with their SAP account team to assess this option."

SAP UK and Ireland User Group chairman Philip Adams was pleased with the move made by SAP.

"This is yet another step in the right direction from SAP and shows that the company is listening to our calls for flexibility. Along with making it easier and more attractive for existing customers to move to cloud solutions, we've also been pushing SAP for a couple of years to enable the parking or partial termination of licences."

He continued: "Until now, if a customer had one contract from SAP covering all their licences, they could not choose to turn off some of those licences and the associated maintenance costs.

"With the changes SAP has made this week, customers will be allowed to terminate parts of their estate and, therefore, potentially gain reductions in their maintenance charges."

Adams reminded users, however, to take care not to confuse the proposed maintenance charge cuts with true "licence parking", which is still not on SAP's agenda.

"Customers need to be careful and consider whether they are likely to need licences they are not using at the moment [at some point] in the future. Once licences have been terminated they cannot be switched back on."

That is the reason why many users want the right to "park" their licences, re-activating them later should they need them.

Overall, Adams believes, "the changes this week, combined with the recently announced cloud extension policy, really demonstrates the value that can be created through constructive discussions between user groups and SAP."