Navigating the complexities of SAP licensing can feel like decoding an intricate puzzle—especially when SAP shifts the model. Whether you're a seasoned IT professional or a business leader looking to optimize your budgets, understanding the nuances of SAP’s new Full Use Equivalent (FUE) licensing is crucial for maximizing the value of your investment while managing compliance.
Under the new FUE licensing structure, users’ authorizations take on even greater importance. Every role granting authorizations to users within your SAP estate will factor into your license fees. This approach aims to simplify the license review process, but could lead to higher licensing costs if roles and authorizations aren’t optimized.
In this blog, we'll break down what the new FUE licensing structure is and what it means for your organization, explain how it differs from previous models, and most importantly, show you how to turn this change into an opportunity. You'll learn how a strategic license review can not only help you optimize costs but also enhance your system security and support your migration decisions. Whether you're planning a cloud S/4HANA or RISE migration or are already using SAP cloud solutions, you'll gain practical insights into managing this transition effectively while avoiding unexpected costs.
What is the new SAP licensing structure?
The biggest change to this SAP license fee model is that there is less room for negotiation without changing access users have. Instead, it will be fixed around the roles and authorizations assigned to users—whether they use them or not. It's not what users did do, but what they can do that will be taken into consideration.
The FUE structure is broken into four user types: Advanced, Core, Self-Serve, and Developer, and costs are based on how many users it takes to get to a "Full Use Equivalent" license. Those utilizing complex and core SAP functionality will be considered Advanced users and will need a full license. Alternatively, those who use SAP less frequently, or only use non-core functionality, will only account for a fraction of one license. The exact ratios are:
-
Advanced: 1 user to 1 FUE
-
Core: 5 users to 1 FUE
-
Self-Serve: 30 users to 1 FUE
-
Developer: 1 user to 2 FUEs
This new system adds clarity and objectivity to licensing and pricing, making forecasting much easier. However, it also means that how users are categorized based on their authorizations will have a significant impact on your total fees.
How do organizations calculate their FUEs?
Under the old system, organizations could manually categorize users into lower license tiers by providing evidence that users were not using some of the functionality they had access to. While this method certainly helped organizations bring licensing costs down, it is not recommended from a security, risk, compliance, and efficiency standpoint.
Under the new FUE model, organizations will need to utilize the STAR report to review and understand their current license position (for more information on the STAR report, see SAP Note: 3113382). This report applies SAP's predefined license Rule Set and categorizes users accordingly. To avoid common pitfalls, ensure your organization reviews this report and remediates any over-provisioned roles and authorizations internally before submitting it to SAP. Doing so allows you to re-categorize users by adjusting their authorizations to better align with their actual job functions, optimizing both license usage and compliance.
When will FUEs apply and what impact will they have?
Every organization operating SAP should stay informed about the FUE license model, particularly in certain scenarios. SAP customers moving to S/4HANA on either the public (GROW) or private cloud via RISE will automatically be moved over to the FUE model.
If you're considering your migration options, understanding the licensing implications of a brownfield (lift and shift) migration should be a critical part of your decision-making process. Many organizations are taking advantage of this opportunity to review and update their antiquated role designs and optimize their SAP security to fit not only the growing complexities of their business needs but also reduce the cost of SAP FUE licensing for years to come.
SAP will also naturally move organizations already on a cloud migration journey over to the new licensing structure. So, if you're well along your migration journey, understanding the new model could help you identify and correct for substantial and unexpected extra license costs before they impact your organization.
In summary: why license reviews are key to cost optimization and efficiency
As we've explored throughout this blog, SAP's new FUE licensing structure represents both a challenge and an opportunity for organizations. While the shift to authorization-based licensing might initially seem daunting, it provides a perfect catalyst for reviewing and optimizing your SAP environment. By taking a proactive approach and reviewing licenses periodically, organizations can not only adapt to these changes but actually leverage them to create lasting improvements.
Done properly, a good license review can help you:
- Reduce licensing costs through correctly structured roles and authorizations.
- Get a clear view of the current landscape to inform S/4HANA or RISE migration decisions.
- Ensure smooth operations and transitions, even during times of major business change.
- Maximize organizational efficiency by right-sizing roles and authorizations to individual user needs.
- Improve security against internal and external threats by putting the right checks and balances in place.
The license fee savings generated from this kind of review can also help build a strong business case for migration and improvement projects, especially as the savings can help fund the project itself. It will also save you time, money, and stress in the long term by avoiding the need to redefine roles and authorizations reactively.
If navigating these changes seems overwhelming, Turnkey can assist with your license review, ensuring that each user has the appropriate roles and authorizations in place before your migration or upcoming audit. This can help you protect your SAP estate and data from insider risks while avoiding unnecessary license costs. Get in touch with us today to find out more.
