European Energy Company

Transparency into real usage allows for 2,000 licenses to be revoked within the first year.

Company Background

The Company is a leading European utility with tens of thousands of employees working across a sprawl of different businesses, generating and distributing energy to millions of customers in Continental Europe and the UK. The complexity and cost of its IT landscape is such that the Company has discrete software asset managers in place for each of the big-ticket vendors – most notably Microsoft, Oracle, IBM and SAP.

Challenge

The Company has a very large SAP footprint. For compliance purposes, it collects user records every weekend from tens of thousands of employees across hundreds of SAP systems. Annual spend on new SAP licenses can vary considerably each year, depending on what projects the Company is running, but it is maintenance, at 22% of already costly licenses, which puts the largest strain on the budget. In 2010, the Company decided it needed greater transparency into its SAP estate to bear down on this multimillion-euro maintenance bill. In 2013, after a false start with another third-party tool, the Company invested in Snow’s license optimization solution: Snow Optimizer for SAP® Software.

Snow’s Contribution

With Snow, the Company could finally gain full insight into its vast and dynamic SAP landscape, enabling it to revoke 2,000 named user licenses in the first 12 months alone. The full impact of this will not be apparent until the Company’s contracts with SAP are renewed, but in terms of ROI, the company estimates that the initial savings pay for on the cost of Snow Optimizer for SAP Software seven times over.

Business Benefits and ROI

  • Compliance across 200 separate SAP contracts
  • Seven-fold ROI
  • Optimization slashes thousands of licenses each year
  • Transparency gives the Company control of its relationship with SAP   

License Optimization Hero

The Company’s SAP Licensing supremo gives Snow 10/10 for value for money and customer service. When asked how likely he would be to recommend Snow Optimizer for SAP Software, he replied: “To be honest, I am always recommending Snow Optimizer for SAP Software because from my point of view, it's the best solution on the market, so I give Snow the full 10, it really does give you full transparency in every aspect.

Optimizing engine and named user licenses

“From my point of view,” says the Company’s SAP Administrator, “the most important thing is [Snow’s] system measurement feature, because more than 50% of our maintenance costs belong to the engine licences. Which means that it’s crucial for us to have an overview of who is using which engines, and how many of them.”

For all the Company’s 250 systems, data is loaded on the 10th of each month; system measurements are run on the first day of every quarter. “My main task is to check whether there are any measurement errors, and what the results are. My database for the licencing assets lies outside of Snow Optimizer for SAP Software, and so the measurements give me the amounts I need to map against the results from Snow Optimizer for SAP Software.”

There are reasons particular to the energy market and to the Company’s arrangements with SAP why the licensing assets are held outside Snow. Yet the heavy lifting done in Snow Optimizer for SAP Software will tell the SAP Administrator where there is scope for optimization. Because of the complex structure of the Company, optimization actions cannot be taken immediately. The SAP Administrator explains: “My role is to discuss the results of the measurement with each subsidary’s Information Manager, and to show him potential optimization or licensing issues I have discovered.”

As we saw, engine licenses absorb 50% of maintenance spend – user licenses account for 35%. Here, Snow reports on users who have been inactive for over 90 days and notifies the administrator of the potential to revoke such licenses for recycling. “Now you can see groups of users, which may be removed to save some money,” the SAP Administrator says.

"Nevertheless, over 2,000 named user licenses were removed over the past 12 months. This does not have an immediate impact on cost, because the Company’s contracts with SAP tend to run for five years. However, the SAP Administrator does have considerable leeway to reconfigure the licenses within his EA. “I can use this free space [created by the removal of 2,000 licenses] for other SAP products. We do not have to reserve it for users, but we can take it for necessary engine licences, for example. This is one thing, one of my tasks is to constantly hold my hand above the usage and take the rest out of our contract where we can.”

Although he cannot put a precise figure on his savings – which runs into millions of Euros – in terms of ROI the maintenance fee on these 2,000 saved licenses cover the Company’s investment in Snow Optimizer for SAP Software seven times over.

Indirect licensing

The Company has long been aware of the perils of Indirect Access and has had a contract in place with SAP to mitigate the risk of hefty fees for unlicensed external users. The SAP Administrator comments: “We have licensed 145,000 external users. This is more than enough.” Nevertheless, the Company is planning to connect some external systems such as Salesforce.com. “Just to get transparency about which systems are using SAP data from the outside, and which users are already licenced (for this) by SAP, and which users are not.”

SAP strategizing

Whilst implementation of Snow Optimizer for SAP Software took a little more time than expected due to internal politics, the Company now has 100% coverage.

The Company has a lot of data, and the SAP Administrator thinks very strategically about how it is used and disseminated.  He explains: “Snow gives us full transparency,” and thanks to this, the Company has been able to gain and keep the upper hand in its relationship with this powerful vendor.

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