Hi!
One of our customers is using the SNC Client Encryption solution to ensure encryption using SNC (based on Kerberos Technology) for their SAP GUI Dialog connections. They have lots of SAP backends DEV, QAS, PRD all with the SNC Client Encryption SNC Lib installed. The profile parameter snc/identity/as contains the following value: p:CN=SAP/<ServiceAccount>@<DOMAIN>.
Example: p:CN=SAP/SNCServiceUser@CUSTOMERDOMAIN.LOCAL
The customer is using one AD Service Account "SNCServiceUser" with one registered SPN "SAP/SNCServiceUser" for all systems (yes, this is not recommended... 
but the case).
Important: All users use group entries in the SAP Logon (saplogin.ini). Means, for SAP logon the SNC name can not be manually configured on the SAP Front End. With group logons, the application server's SNC name is dynamically requested by the message server each time a SAP GUI connection is started. The SNC Name is greyed out in this case as dynamically obtained from the applications servers profile parameter snc/identity/as.
Now our customer implements SAP NetWeaver Single Sign-On 2.0 within his landscape. Based on the Secure Login Server 2.0 (SP3) he likes to use X.509 based authentication to his AS ABAP backends using SAP GUI SNC while others still use SNC Client Encryption.
Replacing the SNC Library on the AS ABAP
The Secure Login Library 2.0 (SP3) has been installed on one of the ABAP systems and the SNC Client Encryption SNC Library (which is based on SSO 1.0) is no longer used, thus we changed the parameter snc/gssapi_lib to point to the new SNC library. We removed the old PSE.ZIP containing the keytab and created the new SAPSNCSKERB.PSE incl. the keytab and proper credentials. To ensure parallel operation, we kept the snc/identity/as value as is = p:CN=SAP/SNCServiceUser@CUSTOMERDOMAIN.LOCAL.
After restarting the system with initialized Secure Login Library 2.0, still the SNC client encryption works fine for existing users.
The problem
We created on the Secure Login Server an SNC certificate for the AS ABAP which has the following X.509 Distinguised Name Fomat: CN=SAP/SNCServiceUser@CUSTOMERDOMAIN.LOCAL This is to avoid having to change the snc/identity/as to an "real" X.509 DN which would lead to non-working SNC Client Encryption for all the other users using SAP GUI and logon groups.
As soon as we install the PSE via STRUST on the system the SNC Client Encryption solution stops working with error „Server refuses kerberos key exchange“. 
As part of an pilot implementation we have installed Secure Login Client 2.0 (SP3) on some test PCs. The test PC with SLC is able to perform Single Sign-On with SNC based on X.509 (incl. Encryption) to the ABAP system.
Seems the SAP System now only tries to do X.509 based authentication thus key exchange fails. The problem is, we cannot change the snc/identity/as value because of the logon groups. If we were able to do so, we would in any case set the server identity to X.509 DN and in addition create the SAPSNCSKERB.PSE incl. keytab. This should work, as confirmed by SAP see this post.
Any ideas how to solve this and have both solutions in parallel?
Appreciate any help.
Regards,
Carsten