Two years ago, SAP extended mainstream support for SAP ERP Central Component (ECC) by two years, from 2025 to 2027. That no doubt prompted sighs of relief for organizations unwilling to take on the pain and costs of migrating to S/4HANA. Now, those organizations and all SAP licensees have until the September 30 annual deadline to notify SAP of their intention to discontinue their support contracts. If you don’t give your notice by that critical date, you’re under contract for support for the next 12 months — with an extra 22% of your current license contract price tacked on. And by the way, SAP just announced an increase of up to 3.3% on maintenance fees starting January 2023.
Since SAP integrated ECC and its SAP HANA database into SAP Business Suite, its strategy has seemingly been focused on locking licensees into a full-stack technology commitment, including database and integrated applications. SAP has been attempting to persuade licensees to adopt S/4HANA – and its hefty migration price tag – since it was first released in 2015.
While some SAP licensees have opted for the newer platform, most have been cautious. The Register recently reported that Gartner “estimates that 70 percent of SAP customers rely on ECC and have yet to upgrade to S/4HANA, even though it was launched seven years ago.” More recently, with the introduction of S/4HANA Cloud on its public and private editions, SAP has been pushing licensees to convert to a subscription model, bundling software, infrastructure, and services under a single lock-in contract. ECC clients converting to the subscription model are required to commit to an S/4HANA migration.
Focus on the future of ERP
The costs of migration can be enormous, consuming crucial dollars that could otherwise be spent on innovation initiatives and digital transformation. SAP licensees “could be looking at tens of millions of dollars or even over $100 million of investment to migrate to S/4HANA,” Forrester VP Liz Herbert told InformationWeek.
According to a 2022 technology talent survey conducted by CIO, 43% of SAP customer respondents are using SAP Business Suite applications and ECC 6.0 versus upgrading to S/4HANA on-premises or cloud versions. And the reason for that is very simple: They cannot afford the risk associated with a multiyear, multimillion-dollar project that lacks a clear business case and cannot ensure that it will address a company’s digital transformation requirements.
SAP will extend support to ECC 6.0 until 2030, if you’re willing to pay an additional 2% of the license contract price and have made a commitment to support S/4HANA until 2040. But even if you’ve already migrated to that platform, you may be questioning the ROI of your SAP support maintenance contracts — and whether you are able to commit to S/4HANA mainstream maintenance, which requires a new upgrade every five years.
Industry trends favoring open systems and cloud services are a strong indicator that what enterprises want most is the freedom and flexibility to upgrade and migrate key business platforms according to their own schedules and best interests. Many may well wonder why they should lock their futures into a monolithic SAP solution when Gartner and much of the industry are saying that the future of ERP lies in multivendor composable architecture.
Is your SAP roadmap on a smart path?
Whether you’re fully committed to an SAP migration path or want to maximize the ROI of your existing investment, Rimini Street focuses on a holistic roadmap aligned with continuous value delivery and maximization of your current ROI. We find that businesses tend to follow these three paths:
- We’re innovating at the edge with best-fit cloud applications and next-generation technologies and need support to move to a composable ERP strategy whether we use ECC or have already adopted S/4HANA.
- We’re taking our time on the S/4HANA migration and want to go with short-term SAP roadmap innovation to help us avoid lock-in, reduce risk, and fund near-term high-impact business projects.
- We’re moving to S/4HANA and need help streamlining our migration to a public or private cloud and navigating complexities, such as cost-benefit analysis, licensing, and greenfield versus brownfield implementation strategies.
In 3 Smart Paths to Innovation for Your SAP Roadmap, you’ll meet businesses successfully following these paths and find out how you can navigate a smart path for your SAP roadmap.
You might also like:
- Read: Maximizing SAP Value with Rimini Street
- Watch: Sharpen Your SAP Talent Strategy for ERP Innovation
- Solution: Support for SAP
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