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SAP license fees are due even for indirect users, court says

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Beverage firm Diageo could be on the hook for an additional £55 million in license fees because it gave Salesforce users access to data held in an SAP system.

SAP’s named-user licensing fees apply even to related applications that only offer users indirect visibility of SAP data, a U.K. judge ruled Thursday in a case pitting SAP against Diageo, the alcoholic beverage giant behind Smirnoff vodka and Guinness beer.

The consequences could be far-reaching for businesses that have integrated their customer-facing systems with an SAP database, potentially leaving them liable for license fees for every customer that accesses their online store.

“If any SAP systems are being indirectly triggered, even if incidentally, and from anywhere in the world, then there are uncategorized and unpriced costs stacking up in the background,” warned Robin Fry, a director at software licensing consultancy Cerno Professional Services, who has been following the case.

London-headquartered Diageo, who has been a client since 2004, pays annual license and maintenance fees for use of mySAP Business Suite based on the number of named users. From around 2011 or 2012, according to court documents, Diageo introduced two new systems, “Gen2” and “Connect,” built on Salesforce.com’s software platform. Gen2 lets Diageo sales staff track customer visits and calls, while Connect allows Diageo customers to make and track orders directly.

Both parties agree that those systems access Diageo’s mySAP installation through SAP Exchange Infrastructure (SAP_PI), for which the company pays an additional license fee.

What’s in dispute was whether the SAP_PI license fee alone is sufficient to allow Diageo’s sales staff and customers to access the data store via the Salesforce apps, or whether those staff and customers had to be named as users and a corresponding license fee paid.

On Thursday, the judge sided with SAP on that question.

That could spell bad news for a lot of companies according Fry, the licensing consultant.