French Retailer Resolves Indirect Usage Exposure in SAP Licensing for Integrated Salesforce Workflows
Industry: Retail | Country: France | Employees: 35,000
Background
This case involves a French retail company with around 35,000 employees and hundreds of European stores. The retailer uses SAP ECC as its central ERP for critical business functions like inventory management, order fulfillment, and finance.
The company also implemented Salesforce as its CRM and e-commerce platform to enhance customer engagement and sales processes. Salesforce was integrated with SAP to create seamless workflows. For example, online orders captured in Salesforce would automatically be entered into SAP for fulfillment.
SAP’s real-time inventory data would be queried to display product availability on the Salesforce-powered web store. Additionally, the retailer’s sales and customer service teams used Salesforce interfaces that indirectly pulled customer and order information from SAP to give a 360° customer view.
These integrations improved business agility and customer experience. However, they also introduced a hidden licensing concern. In SAP’s terminology, the Salesforce systems and users were “indirectly” accessing SAP.
Historically, SAP’s license model required that any user or system that triggers SAP transactions, even via a third-party front-end like Salesforce, be properly licensed.
The retailer’s IT management realized that while they had thousands of named-user licenses for their direct SAP users, they hadn’t accounted for the additional indirect usage from Salesforce-driven processes.
For instance, a customer placing an order on the website or a sales rep viewing SAP data through Salesforce were not logging into SAP directly, but SAP was processing their actions behind the scenes. This raised a red flag: such indirect usage could fall outside the retailer’s existing SAP license agreement, potentially constituting unlicensed SAP access.
The issue came to the forefront when SAP announced in 2017–2018 a series of high-profile license audits and legal actions highlighting indirect access.
Notably, companies like Diageo and Anheuser-Busch InBev faced massive claims from SAP for unlicensed indirect usage via systems like Salesforce. In one public case, a UK court ruled that using Salesforce to input orders into SAP required proper SAP licenses for all those Salesforce users; the customer (Diageo) was found liable for around £54 million in license and maintenance fees for indirect access. This sent shockwaves through the SAP user community.
Upon learning of these cases, the French retailer’s executives and CIO grew concerned that their Salesforce-SAP integration might expose them to similar compliance risk. An internal review was commissioned to quantify the extent of indirect use and assess licensing gaps.
The finding: the integrated workflows (online store orders, Salesforce clienteling apps in stores, etc.) indeed meant thousands of interactions with SAP that were not covered under the traditional named-user licenses the retailer owned.
In the worst-case scenario, an SAP license audit could deem these interactions unlicensed and demand back fees or penalties, which, given the volume of transactions, could reach millions of euros.
Challenge: Indirect Usage License Exposure
The retailer faced a dual challenge: compliance risk and cost uncertainty. The existing SAP contract was older and primarily based on named users and SAP module usage.
It did not explicitly account for modern multi-application environments, in which non-SAP front-end users indirectly trigger SAP processes. This ambiguity is where indirect usage lives as a “gray area.”
Key facets of the challenge included:
- Lack of Visibility and Measurement: Initially, the retailer lacked a clear way to measure the number of SAP business documents (orders, deliveries, invoices, etc.) created or accessed via Salesforce integration. Indirect usage doesn’t show up in standard user counts.
- SAP’s traditional audit tools (USMM/LAW) didn’t explicitly flag indirect usage under the old model. The company had to assemble logs and integration records to estimate the scope. This made it hard to know just how big the compliance exposure was – was it a minor issue or a massive licensing gap? Uncertainty made it difficult to plan a solution or negotiate with SAP, because the potential cost impact ranged widely.
- Compliance and Legal Risk: The Diageo case proved that SAP was willing to enforce contract clauses about “indirect access” strictly. The retailer’s legal team reviewed their SAP contract and found the standard language: use of SAP software “directly or indirectly” must be licensed. If audited, SAP could make a case that every Salesforce user who caused an SAP transaction (like placing an order) was an “indirect user” requiring a license. Thousands of customers and employees interacted with Salesforce interfaces that touched SAP. The retailer could not practically buy a traditional SAP named user license for each individual (especially customers). If calculated in the old way (license per user), the exposure could be business-threatening, exactly as in the public cases where SAP’s claims were astronomical. This hung like a sword over the IT department – they needed to eliminate this risk proactively rather than wait for an audit or, worse, a lawsuit.
- Evolving SAP Licensing Models: In 2018, SAP introduced a new licensing approach called Digital Access (often dubbed “Indirect/Digital Access licensing”) to address this very issue. Instead of charging by user for third-party access, SAP would charge by the number of documents (business transactions) created in SAP by an external system. SAP even launched a Digital Access Adoption Program, promising customers a simplified path to compliance, with incentives like waiving back-maintenance fees for those who converted to the new model in good faith. This was encouraging, but it introduced complexity: the retailer had to decide whether to stick with the old model (and somehow cover indirect users, perhaps by buying more user licenses) or switch to the new document-based model. Each option had cost implications and uncertainties – e.g., how many documents do we generate via Salesforce per year? Would a document-based license be cheaper than a hypothetical tens of thousands of named users? The challenge was analytical (understanding usage) and strategic (negotiating the right deal with SAP).
- Operational Continuity: Any remedial action needed to avoid disrupting the integrated systems. The Salesforce-SAP interfaces were mission-critical (online sales channels, customer service workflows). The company couldn’t afford to shut them off or radically redesign them simply for licensing reasons. The solution had to allow those integrations to continue smoothly, meaning the licensing fix should legitimize the status quo (or an enhanced version) rather than requiring a rollback of functionality. In other words, the retailer sought a licensing solution, not a technical one, to the indirect usage problem.
Solution: Proactive License Negotiation and Digital Access Adoption
Facing the issue head-on, the French retailer decided to proactively engage with SAP and resolve the indirect usage licensing gap by negotiating and adopting SAP’s newer licensing model.
The steps they took included:
- Internal Audit & Measurement: First, the retailer’s SAP team, with help from an external licensing advisor, conducted an internal audit of all interfaces between Salesforce and SAP. They utilized SAP’s Digital Access estimation tools, which had become available. SAP offers a “Digital Access Evaluation Service”, essentially a program or notes that can be run in the ERP system to count how many document entries are created by external systems over a period. The retailer ran this analysis for several months to gather data. The results gave a concrete measure: for example, they discovered that in the past year, the Salesforce integrations had created, say, 120,000 sales orders, 300,000 line items, and so on, which corresponded to specific document types in SAP’s model. They also noted which documents were most voluminous (customer order and invoice documents were at the top, in their case). This exercise transformed the problem from a vague fear into a quantifiable usage profile, which was crucial for the next steps.
- Choosing the Digital Access Model: Based on the usage data, the retailer determined that SAP’s Digital Access licensing would likely be more cost-effective and future-proof than trying to license every possible user. Under Digital Access, SAP defined 9 document types (Sales Order, Invoice, Delivery, etc.), and you pay per document created by external access. Importantly, pure read access (just querying data without creating new records) is free under this model, a relief for scenarios where Salesforce only displayed information from SAP. The retailer’s analysis showed that most of the Salesforce -> SAP interactions resulted in a manageable number of documents annually (the order volumes were significant but not tens of millions). Furthermore, many read-only inquiries (like checking inventory availability) wouldn’t incur charges. They contrasted this with the old named-user model: potentially thousands of users (including end customers) would need licenses, which was utterly unrealistic. The Digital Access approach aligned with how they used SAP – essentially paying for outcomes (business documents) rather than people. It also meant costs would scale with actual business activity, which felt more rational. Thus, the team decided to pursue a conversion of their SAP contract to the digital access model for indirect usage.
- Negotiation with SAP: The retailer opened discussions with SAP’s account management, presenting their findings and expressing intent to migrate to the digital access license model. SAP was receptive – by this time (around 2019-2020), SAP was actively encouraging customers to adopt digital access and move past the negative atmosphere caused by the Diageo-type incidents. SAP had publicly promised not to penalize customers who proactively come forward. In negotiations, the retailer leveraged that commitment. They negotiated a contract amendment that would: (a) officially adopt Digital Access licensing for their SAP ECC system, and (b) retroactively cover past indirect usage without back fees. In essence, SAP agreed to waive any claims on previous indirect usage (no surprise bills for prior years), in exchange for the retailer purchasing a forward-looking package of Digital Access rights. The retailer purchased a block of digital access documents sufficient for their needs. For instance, they might buy the rights for up to 200,000 document creations per year (across the defined types), with an option to true-up if they exceeded that in the future. They negotiated volume discounts based on the totals, ensuring the price per document was reasonable. The final deal also included some conversion credit: the retailer had invested heavily in SAP licenses historically, so SAP applied some credit from their existing license estate value to offset the cost of the new documents (a common practice so that customers feel their prior investment isn’t lost).
- Ensuring Contract Clarity: The new agreement explicitly documented which Salesforce-integrated processes were covered. The language in the contract was updated to reflect the Digital Access model terms, replacing or superseding the old indirect usage clause. This removed ambiguity; in the future, both parties clearly understood that X number of documents were licensed for digital access, and what constituted a document event. The retailer’s legal team also took the opportunity to embed protective clauses. For instance, if SAP’s licensing metrics or definitions change in the future (a common worry), the retailer would not be worse off for the agreed usage levels. Additionally, they secured the right to reduce the digital access entitlement at renewal if their integration usage dropped (e.g., if they retired a system or moved to a different architecture), providing flexibility to not over-pay long-term. SAP also granted a short dual-model period during the transition: essentially a few months where the old and new licensing models overlapped to ensure all indirect use was captured and compliant as they made the switch, with no compliance gaps.
- Process Adjustments and Monitoring: The retailer implemented internal processes to govern and monitor indirect usage, with the licensing squared away. They set up periodic reviews of the Salesforce-SAP integration logs to track document counts against their licensed volume. This was facilitated by tools SAP provided post-negotiation – e.g., an automated report for digital document consumption. They also educated their architects: any new integration or system that might interact with SAP (for example, if they later connected a new mobile app or a marketing platform) would be evaluated for licensing impact upfront. Essentially, the company embedded indirect access awareness into their IT governance, so they wouldn’t inadvertently expose themselves again. This was less a technical solution and more a policy: ensuring they stay within the bounds of their entitlements and plan for expansions by buying additional blocks if needed.
Outcome: Compliance Secured and Business Continues Uninterrupted
By proactively tackling the issue, the French retailer turned a potential compliance crisis into a win-win outcome:
- Elimination of Audit Risk: The company effectively neutralized a major licensing risk that had been looming. The Salesforce-to-SAP workflows are now fully licensed and compliant with the new digital access licenses. They no longer fear an SAP audit’s findings in this area – any auditor would see that these previously “gray” usages are covered under the document-based model. This has saved the company from a worst-case scenario of owing hefty penalties or purchasing panic licenses. For context, they avoided a Diageo-like situation where tens of millions in fees could have been claimed. One executive remarked that resolving this exposure lifted a “heavy weight off the shoulders” of the IT department, allowing them to focus on innovation rather than legal worries.
- Cost-Effective Licensing: The switch to Digital Access proved economically beneficial. After a year on the new model, the retailer found that the number of documents consumed was in line with estimates and the costs were reasonable relative to their SAP budget. When comparing costs, they discovered that had they tried to remain under the old model, they might have needed to license potentially thousands of new named users (many of them being end customers or occasional users via Salesforce), which would have been prohibitively expensive and impractical. Instead, they might be paying a few hundred thousand euros annually for digital access – a fraction of the imagined cost of old-style compliance, and a predictable amount that scales with business growth. SAP’s promise that conversion could be “little to no net-new cost” held in their case. They reallocated some of the budget from unused areas (they optimized some other license usage during the process) to cover the digital documents, keeping the overall spending nearly flat. This predictability in licensing cost is important for a retailer operating on thin margins.
- Preserved and Improved Business Processes: The retailer did not have to cut back on functionality. All the convenient integrations between Salesforce and SAP continued to operate, now on a sound legal footing. Store employees, e-commerce customers, and sales reps likely never noticed anything except perhaps slight improvements, because as part of the initiative, the IT team optimized some of the interfaces, knowing how they were counted. For example, they eliminated a redundant step that created an extra document in SAP, streamlining the process and reducing the unnecessary document count. This optimization was minor but had the dual benefit of efficiency and license efficiency. The result: the business enjoys a 360-degree integrated CRM-ERP solution (e.g., a customer can place an order online and see the status from SAP in real-time, a support agent can trigger a return in SAP via Salesforce interface, etc.) without interruption or fear. The solution was completely behind-the-scenes from an operational perspective – exactly what the company needed.
- Better Vendor Relationship: By addressing the issue proactively with SAP, the retailer turned what could be a conflict into a more positive partnership scenario. For its part, SAP appreciated the customer’s proactive stance (the account team avoided a contentious audit scenario). The negotiation and its outcome demonstrated transparency and good faith on both sides. SAP often cites customers who successfully navigated to the new model; the retailer even agreed (privately) to serve as a reference for the Digital Access program. This goodwill has translated into more openness from SAP in other areas – for instance, SAP provided some complimentary training to the retailer’s staff on the new S/4HANA “Rise” offerings (even though the retailer has not yet moved to S/4, they are exploring it, and SAP is treating them as a valued customer to retain). Internally, the retailer’s procurement team was also lauded for turning a potential compliance fine into a negotiated solution with no penalties. It set a precedent within the company for active license management.
- Future-Proofing for Integration: The retailer’s IT landscape continues to evolve – they are piloting new digital initiatives like mobile clienteling apps and IoT devices for inventory tracking. Thanks to the lessons learned, they now incorporate license impact analysis into every new integration. The Digital Access model in place can accommodate new digital channels relatively easily: if any new system creates SAP documents, they just count towards the existing license tally. If volumes grow beyond the current allotment, the retailer can negotiate additional blocks from SAP, likely at a better unit rate due to volume. The company’s SAP licensing is now aligned with a modern IT architecture where multiple systems connect to SAP. This alignment means fewer worries that unexpected licensing snares will hamstring innovation. As SAP eventually pushes the company towards an S/4HANA upgrade, the groundwork on indirect usage is already laid – the digital access licensing can carry over, and the company can transition without the indirect use baggage.
In summary, the French retailer turned a potentially dangerous indirect usage exposure into a story of proactive risk management. By embracing SAP’s digital access model, they secured compliance and gained a transparent, usage-based licensing regime that supports their integrated Salesforce workflows.
The case illustrates the importance of avoiding software license issues in an era of interconnected applications. With early action and open negotiation, even tricky issues like indirect SAP access can be resolved in a way that protects the business and maintains harmony with the vendor.
This retailer’s experience has since been shared (anonymously) in SAP user group forums as an example of how to successfully navigate the indirect access challenge, especially for those leveraging Salesforce with SAP.
