SAP Single Metric contract
A Single Metric contract means that you, the end-user, agree with SAP that instead of having multiple metrics (e.g.: Named User and Engine), only one metric is applied. This metric usually is an overall business metric, based on revenue or number of employees.
The Single Metric contract applies to a predefined set of products, for which the contract does mention agreed quantities and the standard metrics. These quantities, however, only come into play again at the end of the contract term. During the contract term, you can install and use the quantity of the Single Metric products that you need. The price of the corresponding licenses isn’t determined by your usage, but by the agreed metric. At the start of the contract, a cap for the metric is defined. If the metric exceeds the cap, the fees you pay to SAP for the licenses will increase proportionally. As long as the metric stays below the agreed cap, you don’t pay any additional fees for additional usage of the Single Metric software. In some cases, SAP allows to exceed the cap by a certain percentage before an additional payment is required.
As an example, suppose you have a Single Metric contract where the metric is revenue and the cap is 1 billion, which you are allowed to exceed by 10%. As long as your revenue stays below or at 1,1 billion, you can use as much of the Single Metric software as you want, without paying any extra fees. However, if your revenue increases to 1,2 billion and your software usages remains exactly as it was, you pay more to SAP, because you exceed the agreed cap.
Prior to the end of the term of the Single Metric contract, you will need to submit a self-audit report to SAP, which often turns out into a deeper audit by SAP – a so called “Advanced Audit” by SAP’s Global License Audit and Compliance (GLAC) team. This audit report will need to include your actual software use. Based on the report, an update to the order form will be made. This update shall reflect the greater of a) the active use identified during the audit, or b) the licensed quantity of the single metric software.
In practice this means that, even if your usage is lower than the licensed quantity, the fees you pay to SAP will never be lower than the fees agreed in the Single Metric contract. After the update of the order form, you will start paying based on the standard metrics mentioned in the order form as defined in the Single Metric contract.