The New SAP License Model

Digital Business and Digital Transformation have continuously been on the rise since the introduction of the intelligent ERP, SAP S/4HANA. Therefore, SAP recently revamped its existing licensing model with a new SAP license model.

They introduced more transparency for customers to help them consume and use SAP applications optimally and also to reduce the anxiety levels around the issue of SAP indirect access. 

SAP License Model - ERP Pricing Model

The SAP license model majorly classifies itself as Direct Access and Indirect Access. 

Direct (Named User / Package / Database) License

This has been the traditional licensing model. However, with the shift from SAP ECC to SAP S/4HANA, there has been an impact on functionality wise purchase of licenses (Packaged License – priced by business metrics). The functionalities which were directly available in SAP ERP system (some post activation) are not completely accessible in SAP S/4HANA. Hence, we now must understand in detail the implications and options of purchasing different SAP licenses required for Business. 

KTern’s Impact Analysis and SAP S/4HANA Readiness Assessment give you aunderstanding of license impact. For eg – SAP S/4HANA leverages MDG-S for supplier distribution. However, MDG-S license is not part of SAP S/4HANA license. 

Indirect License

SAP systems data accessed via IoT, 3rd party applications, or other digital access are based on transactions/documents processed by the system itself. SAP identifies nine document types to represent system-generated records of commonly valued business outcomes. These are a part of the license. Therefore, for any other document types, there shall be no additional charge.

SAP License Model Options for existing SAP ERP Customers 

SAP License Model Options for existing SAP ERP Customers

According to the new SAP License Model, Document Licenses are required when indirect access triggers the creation of certain sales or invoicing related documents. You can learn more at  SAP ERP Pricing for the Digital Age: Addressing Indirect/Digital Access.  In addition, you can read up on more information regarding the SAP software licenses at Licensing SAP Software – A Guide for Buyers.

SAP License Model Picture 1

SAP License model Picture 2

SAP separated License Sales from Audit and Compliance. Therefore, customers can separate their ongoing SAP usage commercials from their new requirements (i.e new software package purchase). 

If you need assistance in understanding your licenses and choosing the right set of licenses to optimize your SAP Application Consumption, send me an email at or send us a message. We’ll get the assessment completed within a few hours with KTern.

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Aspiring digital marketer with a specialization in Content Marketing, SEO, and Social Media Marketing, working towards the proud title of CMO while also strategizing and working with SAP architects to guide enterprises on the optimal path towards SAP S/4HANA and digital transformation with tailor-made enterprise-specific tools and accelerators to reduce capital expenditures and maximize business value in a risk-free manner.Ping me on LinkedIn or mail me at if you would like talk regarding the ideal paths to SAP S/4HANA.

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