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As I was looking for the Terms of Services and Conditions (ToS) for SAP’s Cloud offerings for my last blog – I had assumed that there was some site where they would all be located-  I made another interesting discovery.   The license agreements for SAP’s Cloud offerings are publically available.

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You can search by country / region – based on the fact that different countries have different laws.

Note: All these agreements are labeled at “SAP confidential” but are all available via a public web site.

What you find are Direct Software License Agreements

This agreement includes the contractual terms for licensing SAP software for use in an On-demand environment. Your SAP software license agreement is governed by an order form which references these General Terms and Conditions (GTC) and the SAP Product Supplement.

Regarding the cloud, there are two types of agreements.

  • A general agreement that applies for all OnDemand offerings:
  • A supplemental agreement (“Supplemental Terms and Conditions”)  for each offering that contains information specific to a particular offering. For example, here is the agreement for Sales OnDemand or Business ByDesign.

Note: I’m not a lawyer, so I’m looking at these agreements based on my layman’s understanding of enterprise software.

First of all, these documents are not easy to digest. SAP is very aware of the importance of water-tight legal documents and the complexity of these documents reflects this experience.

Note: It would also be interesting to compare these documents with those used for OnPremise applications.

I’m including the whole paragraph of interesting aspects from the respective agreements in italics so that the entire context is provided. I’m following the quote with a short analysis.

General License Agreement

Quote:

2.10

If Customer is granted access under this Agreement to a free (no fee) version of the Service, to the extent permitted by applicable law, Customer agrees that  SAP has no obligation to provide any particular service level or support services; and (ii) SAP may cease providing the Service at any time without notice. This Article 2.10 supersedes any conflicting term of this Agreement.


Analysis: Hmm – this looks like for the free versions of OnDemand offerings (StreamWork, BI OnDemand, etc) – there is no obligation for any SLA and the service can be closed at any time. Good to know.

Quote:

3.3

SAP warrants at least ninety-nine percent (99%) System Availability over any calendar month. Should SAP fail to achieve ninety-nine percent (99%) System Availability over a calendar month, Customer shall have the right to receive a credit equal to two percent (2%) of its subscription fees for the Service for that month, for each one percent (1%) (or portion thereof) by which SAP fails to achieve such level, up to one hundred percent (100%) of the fees for such month. This is Customer’s sole and exclusive remedy for any breach of this service level warranty; provided however, that should SAP fail to achieve ninety-nine percent (99%) System Availability in each of two (2) consecutive calendar months, Customer shall have the right to terminate the Order Form for cause, in which case SAP will refund to Customer any prepaid fees for the remainder of its subscription term after the date of termination. Claims under this service level warranty must be made in good faith and by submitting a support case within ten (10) business days after the end of the relevant period.

Analysis: 99% is good – a quick search for Salesforce’s SLA wasn’t successful and some say it doesn’t even offer a SLA – some other OnDemand players offer more (Rackspace just announced that it will provide 100% SLA for some customers ). The customer credit for SLA violations is also important.  BI OnDemand has a SLA of 99,5% but many of the other services provide no additional details to that provided in the General Agreement. .

Supplemental License Agreements

These documents contain the real intriguing details.  Those interested in purchasing these offerings would be wise to examine these documents, because they help clear up misunderstandings that might occur based on marketing materials or other sources.

Sales OnDemand

Quote:

1. To the extent Customer has a current valid perpetual license for SAP Business Suite software, Named Users of the Service licensed pursuant to the Order Form are permitted to access the SAP Business Suite software through the Service only for the limited purposes of synching master data in the following data areas: Accounts, Contacts and access to pricing. If SAP Business Suite integration is required for any functions not specified above, then appropriate named user licenses that allow access to the SAP Business Suite / SAP ERP are required at an incremental cost (i.e., costs on top of the pricing for the Service under this Order Form). Services to enable the integration with SAP Business Suite on-premise software are not included under the Order Form.

Analysis: I don’t know if the “Named Users” of Sales OnDemand (SOD) must also be licensed in the appropriate Business Suite software – my assumption is that this is a requirement. The restriction to “Accounts, Contacts and access to pricing” synchronizations is curious – I don’t understand why other functionality might be necessary, except when partner add-ins for SOD (whenever they appear) access other Business Suite data.   The fact that the costs associated with Business Suite integration aren’t included in the SOD is another consideration that customers shouldn’t forget when calculating the costs of the offering.

Quote:

3. The Service may be accessed by Named Users through a mobile application obtained by Named Users via third-party websites. Customer acknowledges that the use of such mobile applications is governed by the terms and conditions presented to the Named User upon download/access to the mobile application and not by the terms of this Agreement. Customer acknowledges that the third party that operates the website through which the mobile application is distributed may stop distributing the mobile application at any time, and SAP is not responsible for the unavailability of the mobile application due to the actions of the third party distributor.

Analysis: Although SAP has its own mobile store, SOD can also be accessed by mobile apps obtained elsewhere.  What is unclear here is whether the apps referred to in this quoted paragraph are mobile apps that originate from SAP but are available elsewhere or are mobile apps that are created by someone other than SAP.

Travel OnDemand

Quote:

1. Customer may have as many Named Users access the Service as are necessary to utilize the Service as permitted in the Order Form. Fees for the Service are based upon the number of expense reports processed per year by Customer (“Expense Reports”). An Expense Report is the business object created within the Service to account for the various expenses that a Named User incurs as a result of a business operation, during a certain period of time. This includes both expenses manually entered by the Named User, as well as expenses received by the Service automatically.

Analysis: Interesting here is that fees are based on the number of expense reports created rather than a flat monthly fee. I like this pricing model, because it is usage-based and reflects how much a customer really uses the service.   I wonder how the Service receives expenses automatically – via an API?

SAP SuccessFactors Business Execution Suite

Quote:

1.3 SAP may use the Customer Data for the purpose of generally improving the look and feel of the Service as well as for developing and distributing benchmarks and similar reports and databases there from so long as SAP, for the latter,  first removes all references to Customer and any personal information of a Named User included in the Customer Data; (ii) presents such Customer Data in the form of aggregate benchmarks; and (iii) generates and publishes benchmarks only when such benchmarks include data from at least seven (7) other organizations.

Analysis: It appears that SAP may use customer data to improve the service as long as it is anonymized. This shouldn’t be a problem but I assume that customers must be aware of the appropriate clause in the Terms of Use. 

Quote:

1. CALCULATION OF FEES. Subscription fees for the Workforce Analytics and/or Workforce Planning Service are based on the number of Employees in Customer’s and its participating Customer Affiliates’ organization. The subscription fees for the core Workforce Analytics and/or Workforce Planning Service include data extraction from one (1) data system unless otherwise set forth in the applicable statement of work. Customer may allow an unlimited number of authorized Named Users access to the Workforce Analytics and/or Workforce Planning Service.

Analysis: This pricing for this particular offering is similar to that of Travel OnDemand in that it is not based on the number of users or a fix monthly cost but rather on business objects used in the application – in this case, the number of employees. 

Product Safety OnDemand

Quote:

(b) Customer acknowledges that the Service will not provide full functionality if not integrated with Customer’s SAP ERP on premise software, which must be licensed separately from SAP for an additional fee. The services required for integration of the Service with Customer’s SAP ERP on premise software are subject to execution of a separate services agreement at SAP’s applicable professional consulting services rates. Customer may only integrate the productive Service client provided under the Order Form with not more than one single SAP ERP on premise productive client. Customer is not entitled to obtain a copy of the EHS Software or any other software included in the Service.

Analysis: I like the inclusion of this paragraph, because it is an example of SAP’s hybrid cloud strategy. Other offerings may work without integration with OnPremise assets but this offering requires this integration. It is curious, however, that the use of SAP’s professional services to perform this integration is mandated by the agreement.  I have no idea why other Sis wouldn’t be able to perform this task.

Quote:

4. End of Term Data Transfer

1.  Customer-owned data and documents (substance data and EHS reports, excluding EHS Content): SAP will transfer any and all Customer Data currently stored for the purposes of the Agreement on readable data media. The related efforts of SAP in this context will be charged as time & material consulting services under a mutually agreeable statement of work under SAP’s then current terms and conditions.

Analysis: Many SaaS applications are unable or unwilling to provide customer data when a customer leaves the service. I am pleased to see that this offering deals with this concern. It was one of the only SAP Cloud offerings that dealt with this issue.

NetWeaver Cloud

Quote:

(c) By submitting, posting or displaying any Customer Application on or throughthe Service, Customer hereby grants SAP a worldwide, non-sublicensable, non transferable, non-exclusive, terminable, limited license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Customer Application for the sole purpose of enabling SAP to provide Customer with the Service in accordance with the Agreement.

Analysis: Can SAP show my application to others, can it duplicate my application for its own purposes?  The description “for the sole purpose of enabling SAP to provide Customer with the Service in accordance with the Agreement” is pretty vague and could cover a lot of activities.

Quote:

(d) Customer will protect the privacy and legal rights of its End Users under all applicable laws and regulations, which includes a legally adequate privacy notice communicated from Customer. Customer may have the ability to access, monitor, use, or disclose content, data and materials submitted by End Users through the Service. Customer will obtain and maintain any required consents from End Users to allow Customer’s access, monitoring, use or disclosure of such content, data and materials. Further, Customer will notify its End Users that any information provided as part of the Customer Application will be made available to SAP as part of SAP providing the Service.

Analysis: Once again, here is the clause that the data of a customer-created application will be made available to SAP. What data will be provided and for what reason is not mentioned.  This is a little bit frightening since the data sources of applications are hosted by SAP.

Quote:

(f) Each Compute Unit includes the following cores and memory.

Lite Edition

Professional Edition

Premium Edition

Premium Plus Edition

CPU

(cores)

1

2

4

8

Memory

(MB)

2,048

4,096

8,192

16,384

Analysis: This is the first time that I have seen this level of details regarding the configuration for the NetWeaver Cloud. No idea regarding the costs associated with these different editions.

Business ByDesign

Quote:

4.3 SAP will activate or de-activate a partner Add-on upon notification by the respective authorized SAP partner. SAP is not responsible for uploading a Customer-specific Add-on into Customer´s SAP BYD environment.

4.4 SAP reserves the right to refuse to incorporate an Add-On into Customer´s SAP BYD system, or to temporarily or permanently deactivate an Add-On at any time if  SAP reasonably believes such Add-On may have a negative impact on Customer´s SAP BYD system (ii), such Add-On fails to meet SAP quality standards for Addons made available by SAP, or (iii) Customer is in breach of any term or conditionof its Agreement with SAP.

Analysis: What was interesting here was the comparison with the agreement for the NetWeaver Cloud where such paragraphs are not present.  The absence there reflects the difference between a SaaS (ByDesign) and a PaaS (NetWeaver Cloud).  In the SaaS environment, SAP’s responsibilities are different and it must be much more aware of the impact of changes (in this case, Add-ons) on a customer’s environment.

Conclusion

Obviously, I didn’t describe the complete contents of all available SAP Cloud license agreements – my goal was to select interesting paragraphs and surface them.  Those interested in the topic should read the documents themselves – there are still important discoveries to be made.

These agreements provide an additional perspective on SAP’s cloud offerings and I’m pleased that SAP has made them publically available. They assist customers make more educated decisions.

Salesforce has also provided similar agreements to the public.

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A comparison between the agreements of both companies would be fascinating and may be the subject of a future blog.

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4 Comments

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  1. Luke Marson

    Hi Richard,

    This is a highly impressive and interesting analysis and it certainly sheds some very interesting insights into how SAP offers it’s cloud solutions. I wonder if SAP are acutely aware of the differences in their different licenses, or if these are individually tailored to suit the service/platform that they are offering.

    Best regards,

    Luke

    (0) 
  2. Martin Krings

    Dear Richard,

    are the sources that you are quoting also saying something about the fees SAP demands? I’m currently looking especially for facts and fugures about cloud solutions SAP EHS Regulatory Content (SAP ERC) and SAP EHS Regulatory Documentation (SAP ERD).

    Your input – maybe providing some link – is highly appreciated.

    Thanks

    M.K.

    (0) 

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