SAP agrees to allow Celonis data access until case resolved
SAP agrees to allow Celonis customers to access data from its systems as their legal battle continues, but customers will be best served if they resolve the data access issues.
While the legal battle between process mining vendor Celonis and ERP giant SAP over data access continues, customers are granted a reprieve.
The two parties recently signed an agreement wherein SAP agreed not to interfere with customers using Celonis' data extractor to access their own data for its process mining applications. SAP also agreed to not hit up the customers for any additional fees or licenses until the case is resolved.
In March, Celonis filed a complaint in the U.S. District Court for the Northern District of California alleging that SAP has engaged in anticompetitive conduct that excludes third-party vendors from accessing data in SAP ERP systems. Part of the complaint alleges that SAP is using anticompetitive business practices to drive customers away from Celonis to its competing Signavio process mining applications.
Celonis' process mining applications analyze enterprise systems like SAP's or Oracle's ERPs to examine how business processes work. Customers can then use the data to understand where the processes have gaps, break down or are inefficient and can subsequently delete or improve them.
Getting data out of SAP systems is critical for the Celonis processing mining platform.
In the stipulation, which was filed June 5, both parties agreed that "SAP will not prohibit or interfere with the use or deployment of Celonis' RFC ABAP extractor…to extract data from SAP ECC and SAP S/4HANA systems."
SAP also agreed that it "will not impose on its customers additional fees or license payments for access to or extraction of customer data using the [RFC Module]" until the case is resolved.
Further, the stipulation impels SAP to instruct in writing any employees involved with selling, marketing or promoting products that compete with Celonis, like Signavio, to refrain from making any statements that are "inconsistent with this Stipulation."
Vanessa Candela, Celonis' chief legal and trust officer, sent the following statement to Informa TechTarget via email:
"Celonis sued SAP for engaging in monopolistic, anti-competitive and unlawful conduct by restricting customers from accessing their own data. SAP's actions threaten to eliminate competition, resulting in increased prices, less innovation and fewer choices for customers. We are pleased that SAP has agreed, until the case is resolved, not to interfere with use of Celonis' data extractor or to impose additional fees or license payments on customers for such use."
The statement continued:
"At Celonis, we believe that businesses should have the freedom to select the best technology solutions for their needs without interference, misinformation or unfair restrictions. We are confident in our case and look forward to continuing to defend these principles on behalf of our company, our customers and the enterprise software industry."
SAP issued the following statement regarding the stipulation:
"SAP continues to reject Celonis' claims, and we are pleased that the court is carefully considering our arguments. We look forward to the court's decision on our motion to dismiss and will continue to vigorously defend ourselves and our innovations."
Broader implications for ERP data access
The agreement between Celonis and SAP is welcome because it's good that customers of both companies know that they have options for their data, said Jon Reed, co-founder of Diginomica, an enterprise industry analysis firm.
However, the case indicates that data access is going to be a significant issue for enterprise vendors, not just SAP, he said.
"Customer data is proving crucial for enterprise AI outputs, so vendors have a temptation to control access to some of that data," Reed said. "That's not healthy for customers."
Vendors are going to need transparent data policies and to work with customers on exceptions where they are fair for third-party data consumption, even if it touches their tools.
Jon ReedCo-founder, Diginomica
Customers are likely open to paying a premium to vendors that can provide clearly enhanced value for their data by making it useful for specialized use cases or in next-generation actionable tools or analysis, he said. But they don't want to have enterprise vendors setting up data "toll roads."
"Vendors are going to need transparent data policies and to work with customers on exceptions where they are fair for third-party data consumption, even if it touches their tools," Reed said.
The best result may be that SAP learns from the lawsuit and works with customers to resolve data access issues, he said. SAP is going to make the case that it can provide customers with the most value for their data, but the customers should be able to use the data in other contexts if they want to.
"It's also reasonable for customers and SAP to have some back and forth on the best policies, perhaps through the SAP user groups," Reed said.
The previous relationship between Celonis and SAP takes the case out of the realm of a classic antitrust lawsuit, said Marcus Harris, a partner at Taft Stettinius & Hollister LLP. Harris specializes in enterprise technology law at the Chicago-based law practice.
There are strong arguments on both sides, he said.
"Celonis' allegations are convincing, but SAP makes solid arguments as well," Harris said. "SAP's argument that it should not be obligated to allow access to its software to a third-party competitor so that a competitor can compete with it is persuasive."
Harris agreed that the case will have huge implications for the enterprise industry.
"Data is the currency of the modern world," he said. "With the advent and wide-scale adoption of AI, ERP software vendors are in a unique position to regulate and control access to that data. To the extent they can charge fees for access to that data, they will."
As for the data provenance, SAP cannot credibly argue that it owns customer data or even assert that it controls access to that data, Harris said. Its most credible argument is that it should not allow competitors -- or third parties -- to use its proprietary software platform to access data.
"And if it will allow access, that access should be on SAP's terms, which may include the imposition of a fee," he said.
The stipulation is not likely to have an effect on the outcome of the litigation, Harris said, but it suggests that the parties are open to settling the dispute.
The case is in its early stages. Harris said he expects that any settlement would allow SAP to charge its customers a reasonable fee to allow third-party access by companies like Celonis, where the access to the software is incidental to the analysis of the data in the software.
"It does SAP no good if SAP's customers view it as price gouging and taking advantage of them," he said.
Jim O'Donnell is a news director for Informa TechTarget who covers ERP and other enterprise applications.
