SAP Provides Details on ERP Transition Option

Amid significant speculation on the extended maintenance deadline, SAP officially announced that it will be offering a new cloud subscription SAP ERP, private edition, transition option, intended to help customers with large and complex SAP deployments better manage their transition.

SAP’s announcement highlighted that most customers are more concerned with how quickly they can transition from their existing systems than deciding whether or not to make the move . While SAPinsider research suggests that this may not yet be the case for a significant number of customers, there is a significant emphasis on formulating those plans. However, SAP emphasized that using older ERP systems beyond 2030 will become inherently complex and risky as third-party solutions like older Java versions and underlying databases will no longer be supported by their respective vendors.

The new offering will be an SAP ERP cloud-based subscription centered on SAP ECC with services that will help with the move to SAP cloud ERP. SAP will also support business continuity by providing patches for security, legal, and software issues. Although any customers running SAP ECC 6.0 EHP 6 or higher will reach the end of mainstream maintenance in 2027, this offering will not be available  for purchase before 2028 and will be active for use from 2031-2033. The announcement has come now so that organizations can plan appropriately.

However, despite the potential benefits for those looking to extend maintenance beyond 2030, is applying certain conditions to the offering. SAP ERP, private edition, transition option will be based on SAP ECC and will not include the full scope of SAP Business Suite 7. Systems that are relevant will need to be moved to SAP ERP, private edition before the end of 2030. In addition to moving to SAP ECC on SAP HANA, SAP has indicated that other changes may be required particularly in regards to third-party applications.

While SAP will release more details on the offering later this year, since it will not be available for purchase before 2028, it will simply provide more information for planning purposes. That said, SAP has maintained that this is not a maintenance extension and that there are no changes for those running SAP ERP systems on-premise after 2030. Additionally, SAP has made it clear that maintenance fees for this option would be significantly higher to a comparable cloud ERP subscription.

What This Means for SAPinsiders

The offering is not for every SAP ECC customer. SAP stated clearly in the announcement that this offering is targeted at customers with very large and complex on-premise IT landscapes including large number of ERP systems. These customers need an extended timeline and a flexible transition plan to move their landscape to the cloud. But these benefits will come at an expanded fee and that the option won’t be available for purchase before 2028. This makes it vital for customers still running SAP ECC to put their transition plans in place as soon as possible. Waiting until 2028 only to discover that this plan will not work could be disastrous.

Two ERP deployments will be required. The first move will be from existing SAP ECC systems to “SAP ERP, private edition”, a subscription-based offering running on SAP infrastructure with SAP HANA as the back-end database. The second will be from that product to SAP S/4HANA Cloud, private edition within RISE with SAP, before the end of 2033. Many organizations would hesitate to take this two-step approach considering the increased costs involved even before factoring in additional licensing fees. Additionally, while the announcement makes no mention of it, it is almost certain that a customer commitment for a move to RISE with SAP will be required as part of the contract.

The biggest benefit is the continuation of extended maintenance past 2030. Although some may look at the timeline as the biggest benefit of this offering, the fact that these systems will continue to receive patches and updates until companies complete their transition to SAP S/4HANA Cloud is a massive benefit. The timeline is simply an additional benefit because only a few organizations will be able to transition before 2030 given the complexity of their landscapes. Customers not leveraging this offering will be required to move to customer specific maintenance after the end of 2030, something that will not provide patches or updates and introduces significant risk. Being able to receive these updates until the move to SAP S/4HANA Cloud is completed is a huge advantage from both a maintenance and security standpoint.