Even companies that want to stay with their existing ERP landscape will only receive official support until 2030. While this buys some time, it is by no means a long planning horizon – especially if alternative ERP strategies or successor solutions need to be examined.
That’s why, in my opinion, it’s positive that the decision has now been made. It creates clarity and gives companies the opportunity to incorporate these new framework conditions into their strategic considerations at an early stage.
The new regulations also allow companies to more easily get rid of unused licenses and the associated maintenance fees. How big could the savings potential be?
Bloch: We don’t have any concrete numbers on this. You have to be very careful because it depends heavily on the individual case. What matters is whether a company actually cancels SAP support completely, switches to a third-party provider or simply no longer needs certain products. Ultimately, a system must continue to operate.
Is there at least an order of magnitude?
Bloch: No, we do not have reliable empirical data. If companies have products in use that they no longer use, they will be able to cancel their support more easily in the future and, of course, save money. However, we don’t know how high this so-called shelfware share actually is.
For companies that have already migrated to S/4HANA or SAP Cloud ERP, this issue should be largely resolved anyway. It is particularly relevant for those who have yet to make the change. You can now check which unused licenses and maintenance contracts you can eliminate and whether this is possible within the framework of SAP concessions, as there are regulations to be observed here too. Anyone who still pays significant support fees for products that are no longer in use can achieve significant savings.
Use the options
Does the EU decision improve companies’ negotiating position with SAP?
Bloch: This cannot be said in general terms. What matters is how a company uses its options. Basically, in my opinion, you achieve the best results when you find a way into the future together with SAP.
Why?
Bloch: For example, anyone who completely terminates SAP support and later signs a new cloud contract must expect to forego certain incentives from SAP. Therefore, every decision should be made taking all dependencies into account.
In addition, it’s not just SAP that offers incentives for switching to the cloud. Hyperscalers also have a great interest in winning companies over to their platforms and sometimes offer very attractive incentive programs. This makes the starting position of companies very different.
Will this make decisions easier for CIOs?
Bloch: Quite the opposite. The new situation expands the options for action, but makes the strategic consideration significantly more complex. CIOs must now ask themselves: Which existing systems continue to provide business added value for our company? There are also questions such as: Where is it worth retaining the existing landscape? And in which areas will we actually benefit from the innovations that SAP will provide in the cloud in the future? Finding exactly this balance will be the real challenge.
So does the decision mean, above all, that companies gain more time – for example to bridge economically difficult phases or to better prepare for a cloud change?
Bloch: Yes, especially for companies that have not yet found a convincing business case for switching to the SAP cloud. You can initially continue to operate your existing landscape and at the same time check whether savings potential can still be realized by eliminating unused licenses and maintenance contracts – i.e. shelfware. This can certainly help in individual cases and provides more scope for action.
The complexity is growing
Has the EU decision solved the biggest problem in SAP licensing policy or do other work areas remain?
Bloch: Extended maintenance remains an important topic for companies that have not yet switched to S/4HANA. The EU decision also has an impact on this. Companies now have significantly more options to organize their existing system landscape and support differently. You no longer necessarily have to treat the entire software inventory uniformly, but can make differentiated decisions depending on the situation.
However, this also increases the complexity. Companies today have a whole toolbox of options and must carefully consider which combination is right for their strategy.
What’s next?
Bloch: What is now crucial is the practical implementation of the promised measures. Together with SAP, we have to clarify how the new regulations will be designed in detail and how companies can actually use them. The obligations are also monitored by an independent trustee. I therefore hope that, together with SAP, we will quickly create more clarity about the operational implementation.
Does the EU decision now create additional pressure to act?
Bloch: But I don’t think this will immediately increase the pressure. There is still some time until extended maintenance begins at the end of 2027. However, companies now have an additional strategic task: They must evaluate which new opportunities they want to use and how these fit into their SAP strategy.
When does it get serious?
Bloch: In my opinion, the crucial year will be 2027. Then many companies will have to determine which system landscape they will use for extended maintenance and what their long-term SAP strategy should look like. Companies that decide against switching to the SAP cloud will also gain some time as a result of the EU decision – but official support for their existing systems will end in 2030 at the latest. This is not a particularly long planning horizon, especially if alternative ERP solutions are also being evaluated at the same time.
Your conclusion?
Bloch: Overall, it is positive that the decision has now been made. It would have been significantly more difficult for companies if there had been further uncertainty until the beginning of 2027. The framework conditions are now on the table and companies can incorporate them into their strategic decisions at an early stage.
