SAP Named User Licenses
Executive Summary:
SAP’s named user licenses are the foundation of SAP software access and account for a large share of ERP licensing costs.
Every individual accessing an SAP system needs an appropriate license type assigned.
Understanding the different SAP user categories (Professional, Limited, Employee, etc.), their costs, and how to manage them is critical to avoid compliance issues and optimize spending.
This article breaks down SAP named user types, common pitfalls in compliance, and strategies for effective license allocation and contract management.
Named User Licensing
SAP uses a named user licensing model: each person who uses SAP software must have their own license.
SAP has no concurrent or shared user licenses; every individual (human or system account) must be accounted for.
If a user isn’t explicitly assigned an appropriate license type, SAP’s audit tools will automatically classify them as a default Professional User (the most expensive category).
This means an unassigned user can incur unnecessary costs. It’s crucial to assign the correct license type to every user as they are onboarded, and to update license assignments promptly if their role or usage level changes.
SAP Named User License Types and Costs
SAP offers a range of named user license types to fit different roles and use cases.
The main categories (in classic SAP ERP and S/4HANA) include:
- Professional User: Full operational access for power users and administrators across SAP modules.
- Limited Professional / Functional User: Limited scope of transactions; for users with restricted roles (legacy ‘Limited Professional’ type now mostly replaced by specific roles in newer S/4HANA contracts).
- Employee User (Employee Self-Service): For occasional users who perform self-service tasks (such as basic HR or data inquiry functions).
- Developer User: This is for technical users who perform custom development or system configuration.
These licenses vary widely in cost. Professional licenses are the most expensive, while Employee licenses are the least expensive.
Below is an approximate price comparison:
- Professional User: ~$3,000–$4,000 (perpetual) or $100–$250 per month (subscription)
- Limited Professional / Functional: ~$1,500–$2,000 (perpetual) or $50–$150 per month
- Employee (ESS) User: ~$500 (perpetual one-time) or $10–$50 per month
Common Compliance Mistakes
Managing hundreds or thousands of SAP user licenses can be challenging. Common pitfalls include:
- Misclassification of Users: Over-assigning expensive licenses (e.g., giving all users a Professional license) wastes money, while under-licensing heavy users risks audit penalties. Always match each user’s license type to their actual usage level.
- Inactive or Duplicate Accounts: Inactive accounts and duplicate user IDs can inflate license counts. Remove users who no longer need access and consolidate multiple IDs per person so each employee uses only one license. If someone leaves the company or no longer uses SAP, reclaim that license rather than leaving it assigned.
- Limited vs. Professional Use: If you still use legacy Limited Professional licenses, ensure those users do not perform transactions outside their allowed scope. Otherwise, they should be reclassified to Professional. Regularly monitor these users’ activities to stay compliant.
License Contract Management Strategies
Managing SAP user licenses requires ongoing oversight and careful contract terms. Ensure each license type is clearly defined in your SAP contract (to prevent audit disputes over what each user can do).
Avoid overbuying licenses. Unused licenses (“shelfware”) still incur maintenance fees but add no value, so purchase according to actual needs (you can always true up later if necessary).
Negotiate flexibility in your contract (e.g., the right to swap a certain number of Professional licenses for Limited licenses as needs change) to accommodate changing requirements without buying entirely new licenses.
Recommendations
- Categorize and Track: Profile all SAP users and map them to the correct license type based on their role and activities. Maintain a central inventory or tool to track license assignments and available license counts.
- Clean Up Regularly: Set a routine (e.g., quarterly) to remove or reclassify dormant and inactive accounts. Recovering licenses from unused accounts can defer new purchases and reduce support costs.
- Educate Stakeholders: Train your IT provisioning team on SAP license types to assign the most cost-effective license appropriate for each new user. Avoid defaulting to “Professional” for everyone.
- Audit Before SAP Does; Run SAP’s user measurement tools internally before an official audit, so you can fix issues internally instead of facing penalties.
- Stay Informed on Changes: Keep abreast of SAP’s licensing updates. New user categories or changes (for example, S/4HANA introducing new roles or FUE metrics) can offer opportunities to optimize your license portfolio.
Read about our SAP License Management Services.
