Named users or document licenses? A comprehensive guide to choosing the right SAP licensing model — with cost analysis, break-even scenarios, and negotiation strategies.
📅 February 18, 2026👤 Fredrik Filipsson📖 30 min read
👤 Indirect Access (Named Users)vs.📄 Digital Access (Documents)
Why the Indirect vs. Digital Access Decision Matters
SAP licensing is at a crossroads. Many CIOs and IT Asset Managers are wrestling with whether to stick with the traditional Indirect Access model (licensing by named users) or switch to SAP's newer Digital Access model (licensing by digital documents).
This decision has major cost and compliance implications. Choose incorrectly, and you could face either skyrocketing licensing costs or steep audit penalties down the road.
The issue comes to a head during SAP license audits, S/4HANA migration projects, and contract renewals. SAP audits now routinely scrutinize "indirect use" — scenarios where third-party systems or external users access SAP data. Companies were shocked to discover that an e-commerce website feeding orders into SAP technically meant every customer required a user license.
To address these challenges, SAP introduced Digital Access in 2018. This model aligns licensing fees more closely with actual system usage (documents and transactions) rather than headcount. As companies connect SAP to e-commerce portals, mobile apps, IoT sensors, and more — understanding the pros, cons, and costs of each model is more critical than ever.
How Indirect Access Licensing Works (Named User Model)
Under SAP's legacy Indirect Access rules, any person or system that indirectly uses SAP must be covered by a Named User license. If a third-party application accesses SAP data or functions, SAP considers it "use" requiring a licensed user — even if the person never logs into SAP directly.
Named User Types: SAP offers Professional Users (full access, most expensive), Limited Professional Users, and specific External/Employee Self-Service users. Regardless of type, the model ties licenses to individuals, not transactions.
Example — The E-commerce Portal: Customers place orders on your website, and those orders flow into SAP for processing. Under traditional rules, SAP could argue each customer is an indirect user. 1,000 customers = 1,000 named user licenses needed. This scenario actually happened in cases like the SAP vs. Diageo lawsuit, which brought indirect use to mainstream attention.
Indirect Access — Pros
✅Simplicity: Count your users — straightforward concept
✅Minimal external use: Cost-effective if only a handful of third-party users or integrations
✅No transaction tracking: Once licensed, usage is covered regardless of activity
Indirect Access — Cons
⚠️Over-counting: A customer placing one order/year needs same license as a full-time user
⚠️Audit risk: Interfaces like CRM, supplier portals, IoT can create unlicensed "back doors"
⚠️Scalability: Costs grow linearly with each new user or device — a barrier to digital transformation
How Digital Access Licensing Works (Document-Based Model)
SAP's Digital Access model ties licenses to the business documents created in SAP by indirect activity — not people. SAP identified nine specific document categories that count:
🛒Sales Documents
📦Purchase Documents
🧾Invoice Documents
🏭Manufacturing Documents
📋Material Documents
🔍Quality Mgmt Documents
🔧Service & Maintenance
💰Financial Documents
⏱️Time Mgmt Documents
If an external system creates one of these documents in SAP, it counts toward your licensed volume. Documents outside these nine categories do not require a license. Reading data or updating existing records generally doesn't count — only creating new documents matters.
DAAP Incentives: SAP's Digital Access Adoption Program offers up to 90% discounts on initial document license purchases and allows trade-in of existing named-user licenses for credit. As of 2025, DAAP remains available with no fixed end date — but SAP reserves the right to sunset it. Leverage these incentives while they last.
Digital Access — Pros
✅Aligns with usage: Pay for documents/transactions, not headcount
✅Scalable: Unlimited users/devices — just license the document throughput
✅Fewer audit surprises: Clear rules on 9 document types reduce grey areas
Digital Access — Cons
⚠️Requires monitoring: Must actively track document counts — new responsibility
⚠️Cost variability: Business activity spikes can increase costs unexpectedly
⚠️Implementation effort: New measurement tools, counting rules, and processes to learn
Cost Structure Comparison & Break-Even Analysis
Scenario
👤 Indirect Access
📄 Digital Access
500 external users, light usage (partner portal)
~500 Named User licenses required. Cost grows per user. Infrequent users still need full licenses.
License document volume (e.g. ~120k sales docs/yr). With DAAP discounts, per-document cost is far lower.
10,000 orders/month via e-commerce (~120k/yr)
Licensing tens of thousands of customers individually is cost-prohibitive. Very high costs.
License ~120k sales document creations. With negotiated rates, far more economical for high volume.
3 heavy-use system integrations (thousands of docs each)
Only 3 named user licenses needed — potentially cheaper if volume per user is extreme.
Could cost more than 3 named users if document volume is very high per integration.
Break-even logic: Digital Access is cheaper when many users each create few documents. Named users win when few users each create many documents. For large populations of occasional users (customers, IoT devices), Digital Access is dramatically cheaper. For small numbers of heavy-use system accounts, named users may cost less.
Action: Model your own data. Calculate the cost of covering all indirect usage with named users vs. licensing the documents those users generate. This reveals your personal break-even point and makes the right choice clear.
Pros & Cons Summary
Indirect Access — Pros
✅Simple concept (licenses per user) and familiar to manage
✅Cheaper if only a few external users or surplus licenses exist
✅No need to track transaction counts — once licensed, usage is covered
Indirect Access — Cons
⚠️High cost for large audiences — doesn't scale to hundreds/thousands of users
⚠️Audit risk — indirect usage often unnoticed until surprise back-charges
⚠️Inefficient for light-use — full license price for minimal transactions
Digital Access — Pros
✅Aligns cost with actual activity — saves money when user counts are large
✅Scalable for digital growth — APIs, portals, IoT without per-user costs
⚠️Requires active monitoring — document usage becomes a metered resource
⚠️Costs can spike with business growth — must budget for volume increases
⚠️Initial complexity — new tools, counting rules, and process changes
When to Stick with Indirect Access (Named Users)
Stay with named users if:
Minimal external usage: Very few touchpoints with third-party applications or outside users — effort to switch isn't justified
Surplus of licenses: You already own more SAP named user licenses than needed — allocate excess to indirect use scenarios
Predictable, low document volume: External integrations generate only a trickle of transactions — named users may be cheaper
Unclear ROI on switching: Initial analysis shows marginal financial benefit — consider waiting for a compelling trigger
Important: Even if you stay with named users, ensure your SAP contracts clearly define indirect use to avoid audit surprises. It should be unambiguous that your licenses cover the specific indirect scenarios in play.
When to Adopt Digital Access (Document Licensing)
Switch to document licensing if:
High volume of external transactions: E-commerce, customer/partner portals, mobile apps, or sensor networks connected to SAP
Multiple third-party integrations: CRM, supply chain platforms, B2B networks — document model unifies licensing for all APIs
S/4HANA migration or RISE: Natural juncture to update licensing — SAP incentivizes Digital Access in new contracts
Eliminate indirect use risk: Draw a line under old ambiguity — DAAP can serve as a "clean slate" amnesty for past discrepancies
Growing digital strategy: Expanding digital channels makes usage-based licensing more scalable and forward-looking
Switching Considerations & Negotiation Tips
📊
Evaluate and Measure First
Use SAP's Digital Access evaluation tools and your own analysis to determine document volumes. This data is your negotiation ammunition.
💎
Leverage DAAP Discounts
Explicitly invoke the Digital Access Adoption Program — at least 90% discount on first batch. Even past official deadlines, SAP often honors similar discounts to close deals.
🔄
Trade-In Credits
Previously purchased shelfware user licenses can be converted to credit toward document licenses. Repurpose past spend to reduce net switching cost.
📅
Align with Renewals or Big Buys
Strongest negotiating position is during major renewals or S/4HANA migrations. SAP is more flexible on pricing when Digital Access is part of a larger deal.
📝
Define Counting Rules in Contract
Clarify that only documents created by indirect systems count — not reads, updates, or internal user actions. Eliminate ambiguity to prevent future disputes.
📈
Negotiate Cap and Grow Terms
Secure agreements where excess documents are granted at the same discounted rate. Protect against unforeseen spikes — you have to ask for this.
🚫
Don't Double-Pay
Internal users already licensed should not be counted as digital documents when acting through external apps. Ensure clarity prevents paying both user and document licenses.
Compliance & Monitoring Regardless of Model
If Staying on Indirect Access
📋Regular user audits via USMM and LAW tools
📋Maintain updated interface inventory with licensing documentation
📋Establish internal process: new integrations must go through license impact review
📋Educate project teams on implications of connecting new systems to SAP
If Moving to Digital Access
📋Enable SAP Passport tracking mechanism for accurate document counting
📋Run periodic internal audits (quarterly) to monitor consumption trends
📋Set alerts at 80% of licensed capacity for early warning
📋Governance on new integrations: assess which of the 9 document types will be created
General tip: Keep SAP contracts and license entitlements organized. Compliance is much easier when you can definitively say "We are entitled to X named users and Y digital documents." Assign ongoing ownership to the IT Asset Management or SAP Basis team for continuous monitoring.
Recommendations & Next Steps
1️⃣
Model Your Own Costs
Conduct a thorough analysis of external users and documents. Compare projected 5-year costs of each model — this data-driven approach will make the best option clear.
2️⃣
Engage SAP Early (but Carefully)
Request a Digital Access evaluation service. Assess internally first, then involve SAP when you're ready to discuss terms. Ask about incentives proactively.
3️⃣
Negotiate Hard, Leverage Everything
Use every chip — DAAP discounts, trade-in credits, competing alternatives. SAP reps have quotas and want to prevent you from reducing usage. Use that to your advantage.
4️⃣
Update Contracts with Clear Language
Whichever model, ensure contracts explicitly cover indirect usage handling. The contract text rules — not verbal assurances.
5️⃣
Implement Continuous License Management
Quarterly compliance checks. Proactive management can reveal optimization opportunities and ensure audits are uneventful.
6️⃣
Stay Informed
Monitor SAP announcements, ASUG/DSAG discussions, and consult licensing experts periodically. SAP licensing policies evolve — stay ahead of changes.
FAQ: SAP Indirect vs. Digital Access
What is the difference between SAP Indirect Access and Digital Access?
Indirect Access = pay per user (even external or system users). Digital Access = pay per document/transaction (regardless of how many users contribute). Indirect ties licenses to people; Digital ties them to the nine categories of business documents created in SAP by external systems.
What are SAP's nine Digital Access document types?
Sales Documents, Purchase Documents, Invoice Documents, Manufacturing Documents, Material Documents, Quality Management Documents, Service & Maintenance Documents, Financial Documents, and Time Management Documents. If an external system creates one of these in SAP, it consumes your license capacity. Documents outside these categories don't count.
Does read-only access require a license?
Under Indirect Access, even read-only usage technically requires a named user license. Under Digital Access, pure read-only actions generally do not count since no new document is created. Digital Access charges for creating documents, not retrieving or viewing them. Always clarify with SAP in your contract.
Is the DAAP program still available in 2025?
Yes. SAP extended DAAP multiple times and it currently has no fixed end date. Customers can still negotiate steep discounts (often 90% off) on initial document license purchases. SAP could sunset the program in the future, so leverage it sooner rather than later.
Can you switch mid-contract?
Yes — many customers transition mid-contract via amendment. However, the best time is during a renewal or larger negotiation (S/4HANA migration, periodic true-up). Mid-term, SAP will sell you Digital Access licenses and incorporate DAAP discounts. Clarify how SAP treats past indirect usage once you switch.
Which model is cheaper for portals and IoT?
Generally, Digital Access. Portals involve many users each doing few things — licensing each user is prohibitively expensive, whereas licensing document transactions is efficient. IoT is similar: thousands of devices creating material or maintenance documents are far cheaper under the document model. The named user model might only win if very few users generate extreme document volumes.
How does SAP detect indirect access in an audit?
SAP asks you to run measurement programs (USMM/LAW for users, document counts for Digital Access). They send detailed questionnaires about all interfacing systems. Auditors can analyze SAP logs to see which generic/interface accounts created documents. If unlicensed usage is found, you're asked to purchase licenses retroactively — often with back-dated maintenance fees.
Need Help Choosing the Right SAP Licensing Model?
Redress Compliance provides independent SAP advisory — from Digital Access assessments and DAAP negotiations to audit defense and contract optimization.