Posts Tagged ‘secondary market’

Tuesday’s Tip: The SAP Optimization List – Key Ecosystem Vendors You Should Know

High Cost Of Ownership And Changing Requirements Drive SAP Users To Seek Optimization Solutions

As users await SAP to regain its mojo (see Dennis Howlett’s post) and implement it’s “Voice of the Customer” strategy in 2010, users must continue to reduce their cost of ownership and complexity (see Figure 1).  In addition, rapidly changing business requirements require some users to seek SaaS alternatives, additional point solutions, and extensions.

Figure 1.  Cost Reduction Top of Mind for SAP users

What SAP users want from SAP

Consequently, vendors providing SAP optimization and extension solutions represent one of the fastest growing parts of the $78.7B (2009 Altimeter Group estimate), 850,000 person strong SAP service partner and developer ecosystem.   SAP users already embrace many of the solutions from vendors on this inaugural SAP Optimization List as part of their business value oriented apps strategy. The living list covers seven areas including:

  1. application extension and usability;
  2. application life cycle management;
  3. archiving, storage, and data management;
  4. license management and optimization;
  5. Microsoft Office integration;
  6. third party maintenance; and
  7. virtualization

1. Application Extension and Usability

Users often complain about the poor usability of SAP solutions.  These solutions allow users to change their user experience with SAP.  In some cases, the solutions provide composite app creation capabilities in other tool sets to inter-operate with SAP.

  • Adobeprovides interactive forms for the SAP environment in both an off-line and on-line deployment.  Submitted forms are then entered into SAP.  Forms can include validations and other secure features.
  • ERP-Linkallows users to extend the SAP environment for business intelligence, document management, content management, and composite application creation using Microsoft tools.  The i_Net platform creates SAP-Microsoft interoperability.
  • GuiXTprovides users with the ability to deliver customized user interfaces in SAP applications.  GuiXT is often used by clients to simplify screens and user flows without impacting SAP code.

2. Application Life Cycle Management

Whether it may be instance consolidation, upgrades, test data management, or performance planning, these vendors ease the process of managing the SAP application life cycle.

  • Hayes Technologyassists customers with replicating production application data for dev, testing, and training environments.  Gold Client allows organizations to replicate the data sets they need in SAP configuration, master data, and transcational data.
  • Hyperformix - builds on SAP internal monitoring capability.   Organizations gain a performance monitoring tool that identifies hardware, infrastructure, and architecture optimization opportunities.
  • Intellicorpprovides an artificial intelligence based optimization solution called Live Compare that compares version of SAP for use in testing, upgrade planning, and other life cycle activities. The solution helps clients understand their pre and post environment.
  • Panayadelivers a SaaS based optimization tool for SAP upgrades, enhancement packages, and ABAP code cleansing.  Customers generate a code analysis to determine differentials between versions.  The tool proactively tells user what will break, how to fix it, and where to test.
  • Tidal Softwareoptimizes the allocation of SAP support resources through a root cause analysis methodology.  Performance, IT Process, and Workload automation solutions address both day to day and upgrade scenarios such as a system refresh.
  • West Trax – uses a benchmark tool based on over 300 clients in 13 industries to determine system optimization opportunities for upgrades and  consolidations.  KPI Scan, KPI Optimizer, and KPI QA help organizations identify opportunities, make suggestions, and assist with compliance.

3. Archiving, Storage, and Data Management

  • EMC – provides content management and archiving solutions to support compliance requirements.  Other capabilities include cloning, backup, and recovery, and information protection.
  • IBM Optimdelivers a suite of integrated data management solutions that includes data privacy, test data management, archiving, retention and E-discovery, and upgrade consolidations.

4. License Management and Optimization

Solutions in this category focus on helping clients manage their license usage.  Many large enterprises lack the understanding of how much shelfware may be in production.  In addition, the used software market provides users with opportunities to unload or acquire older releases of software.

  • Flexera (formerly Acresso, Macrovision) - helps clients with a software solution to understand usage, ensure compliance, centralize updates, predict future demand, and improve contract negotiation leverage.
  • SUSEN Softwareprovides a market place to buy and sell used software or shelfware.
  • UsedSoft - supports a market place to buy and sell used software or shelfware.

5. Microsoft Office Integration

Organizations require easy ways to leverage Microsoft Office as an interface into SAP.  Common scenarios include Outlook, Excel, Access, and Word integration.

  • SAP Duetrepresents a solution in joint partnership between Microsoft and SAP to provide interoperability.  Current users complain about the slow pace of innovation and high cost.  A new version addressing these issues will be out in 2010.
  • Winshuttlefacilitates data exchange between SAP and Microsoft Excel or Access.   Winshuttle’s data management tools automate data entry, data download, and reporting tasks for the entire SAP BusinessSuite 7.

6. Third party maintenance

Customers seeking relief from maintenance choose solutions that provide maintenance, tax updates, and regulatory changes for often half the cost of existing SAP maintenance prices.  The clear leader in the market is Rimini Street though some other system integrators have been quietly providing such services.

  • Rimini Street- delivers maintenance options for SAP customers who do not seek to upgrade but would like to keep their existing systems up to date with tax, compliance, and other break-fix issues.  Rimini Street’s charter program has met significant success with over 100 client cases for SAP customers.
  • Your System Integrator of Choice – The recent Siemens SAP maintenance contract negotiations revealed that other vendors such as IBM and HCL were bidding for the maintenance business.   Many SoftwareInsider readers have shared with us that many system integrators, especially those in Europe provide such services.

7. Virtualization

Virtualization allows organizations to consolidate server infrastructure costs for development, testing, training, and production environments.

  • EMC – provides virtualization solutions that include high availability (HA), backup and recovery (BR), and cloning.
  • VMWare -  reduces an organizations physical infrastructure footprint with its solutions.  VMWare provides additional solutions that deliver high availability (HA) and disaster recovery (DR).  In addition to cost savings, many Software Insider readers report performance improvements.

The Bottom Line – Lots Of Proven Solutions, Expect More Details In Future Friday’s Features

Over the course of the next 6 months, we will be profiling many of these vendors.  Key questions that will be answered:

  1. What’s the appropriate use case?
  2. What other customers have used these solutions?
  3. What are sample ROI’s achieved?

Meanwhile, let’s see what news, programs, and innovations develop at SAP’s Field Kickoff Meeting (FKOM 2010) the third week of January.

Your POV.

Have you worked with any of these vendors?  Feel free to share your experiences.  Am I missing anyone?  This list will be continuously updated so please share with us your thoughts.  Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 201o R Wang and Insider Associates, LLC. All rights reserved.

News Analysis: Used Software Rights Upheld In SusenSoftware Win Over SAP

A new secondary market for used software has emerged

Some time back in December 2006, we wondered why enterprises could not resell unused and used software and transfer related services to a willing buyer under a perpetual license.  Enterprises could resell hardware, telecom equipment, and other services contracts.  So why couldn’t a licensee retain the right to sell their software in the secondary market?  In addition to licenses, this could include maintenance agreements, support contracts, training, and consulting services to either an unrelated third party, joint venture, partnership, or subsidiary.  In fact, we even put this in as the 36th right in the landmark Enterprise Software Licensee’s Bill of Rights.  Well, since that time, several German vendors such as Preo Software, SusenSoftware and UsedSoft in EMEA have pioneered such a capability in the German market.

Recent lawsuit with SAP highlights some tactics vendors have tried to mislead customers

German copyright law (UrhG) upholds the principle of the “Exhaustion Rule”, which means that the developer’s copyright expires at the time of sale.  This legal foundation was upheld in the German Federal Court of Justice (BGH) on July 6th, 2000.  In summary, a developer can only make money on the initial sale and any attempt to restrict trade of used software through specific trade terms conflicts with the exhaustion rule.  Experts cite that this rule applies throughout the EU and Switzerland based on recent case law.

In the most recent case against SAP, apparently an SAP employee told a customer that they must seek permission from the software vendor to purchase used software. Based on a previous ruling between UsedSoft and Microsoft in the Hamburg courts on June 29, 2006, vendors can not mislead customers on the legality of used software.  In specific, “It is forbidden (416 O 103/08) to the software producer to spread misleading statements for the legal standard of the using software trade”.  The provisional order won by SusenSoft over SAP also reinforces the previous legal challenges.

Ruling also applies to the U.S.

To date, the “Exhaustion Rule” also known as the “First-Sale” doctrine has been upheld most recently in the June 2nd 2008 case of Timothy S. Vernor v. Autodesk Inc.  In fact the specific ruling cites, “This doctrine is stated in the following statutory provisions: “Notwithstanding the provisions of section 106(3) [17 USCS § 106(3)], the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” 17 U.S.C. § 109(a).  Because a first sale exhausts the copyright holder’s distribution right, future distributions of the copy do not implicate the Copyright Act. Opinion, p.7, citing United States v. Wise, 550 F.2d 1180, 1187 (9th Cir. 1977).  A first sale does not, however, exhaust other rights, such as the copyright holder’s right to prohibit copying of the copy he sells. Id. For example, the first sale doctrine permits a consumer who buys a lawfully made DVD copy of “Gone With the Wind” to resell the copy, but not to duplicate the copy. Id.

The bottom line -  consider the secondary market as part of your long term apps strategy

Enterprises seeking to optimize enterprise software costs may want to consider the used software or secondary market as an option.  It appears that the legal precedents have been set in EMEA (we’re hearing mixed things in the US (revised 6/22/2009 8:05 am PT).  Now may be the time to pick up additional SAP R/3 4.7, Oracle 11i EBS, or Infor Baan 4CIV licenses!  Resellers, VARs, and distributors should take the opportunity to create this new market.  Pressure from vendors will most likely be limited as the sentiment in the courts now side with the customer.

Your POV

Wondering when you can unload your used software licenses?  Are you looking to unload an acquired entities assets to use?  Would you want to benefit from the secondary enterprise software market? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

Related research and links

June 12, 2009, Channel Partner, “Used software – SAP suffers defeat”

June 9, 2009 Channel Partner, “UsedSoft obtains a provisional order against Microsoft”

December 22, 2008, Forrester Research – Peter O’Neill  “The Spread Of Remarketed Software Could Be A European Response To The Economic Crisis”

June 2, 2008, Law Updates – “Federal Judge Approves eBay Auction of Copyrighted Autodesk AutoCAD Design Software”

December 18, 2006, Forrester Research – R “Ray” Wang “An Enterprise Software Licensee’s Bill of Rights”

Copyright © 2009 R Wang. All rights reserved.

* This post provides an alternative that must be vetted by proper legal professionals.  Please consult your own legal counsel for specific advice on legalities.