The end of September often comes abruptly for SAP customers struggling with the costs and restrictions inherent in the vendor’s support contracts.
September 30, 2024 is the deadline for informing SAP that you are considering terminating those contracts for the coming calendar year. You can later choose to stay with SAP support, but if you want to switch, you need to let them know now to keep that option open.
It’s Never Too Early to Plan SAP Support Alternatives
With many SAP ERP customers facing a 2027 cutoff of mainstream support for SAP ECC and Business Suite, the passing of time represents yet another technology risk for enterprises to manage.
The prospect of lapsed support can lead some to grudgingly migrate to a newer version earlier than desired, while others face the potential of growing cyber-risks.
“If you’re an SAP customer you’ve got some big decisions to make for the coming year,” Aberdeen VP and research fellow Derek E. Brink says in an on-demand webinar. “Every year there’s a deadline of September 30 where if you’re an SAP customer, you need to make a formal notice of cancellation if you decide to not renew your SAP support contract for the coming calendar year.”
Recession concerns driving cost reductions
Brink provides a peek at survey data showing that more than 80% of businesses are concerned by the prospect of a recession. About half of businesses plan to take some precautionary measure in the event of an economic downturn. Among those measures are reducing non-essential spending, reevaluating vendors, and delaying purchases or upgrades.
Brink says they should keep open to reduce operating costs of their SAP software infrastructure with the possibility of better support options and mitigation of security risks.
Scott Hays, senior director of product marketing at Rimini Street, hosts the webinar and advises SAP customers of the advantages of third-party support, including extended support beyond the vendor’s own cutoff, self-determination of migration paths, and ability to plot a path toward composable ERP that more readily lets organizations innovate around the edges of a core ERP platform with best-fit applications.
As of Q4 2022, 68% of SAP ECC clients had not yet bought or subscribed to licenses to start their transition to S/4HANA.[i] It seems for many, the business case for a costly, disruptive migration and ERP re-platforming project just isn’t there.
According to Hays, many SAP clients don’t see the need or benefit of making that move. “There are clients who are on ECC Business Suite and they really plan to stay there and continue to sweat that asset and to continue to use their customizations, whether it’s on premises or in the cloud.”
With the 2027 date for ending mainstream support, companies not wishing to migrate from SAP ECC/Business Suite to S/4HANA must create a plan on how to sustain their current SAP software and determine whether the support decision should be earlier or later.
“There is no question that owning and running an SAP environment for a company of any size can be a pretty hefty expense and there are ways to reduce it on an ongoing basis,” says Hays. “But we also need to make sure that that environment stays stable, stays performing, and stays adaptable to other things that are happening in the SAP environment.”
[i] Gartner – Quick Answer: What Is the Level of Adoption of SAP S/4HANA in 4Q22?, 23 March 2023
You may also like:
- Read: Composable ERP for SAP
- Watch: Your Future Options with SAP
- Solution: Third-party support for SAP
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