SAP Reduces Cloud ERP Base Minimum to 15 Users, Opening Midmarket Access

SAP introduced an update to its Cloud ERP licensing model, lowering the minimum number of base users required to subscribe from 25 to 15 pooled users. The change applies to the base family of SAP Cloud ERP licenses, including Finance Base, Supply Chain Base and the combined Finance + Supply Chain Base. This provides additional flexibility for organizations licensing SAP Cloud ERP through an expanded tiering structure.​

The revised minimum establishes a new Tier 1 (15–24 users) across the Base license family, allowing organizations to allocate the 15 users in any mix of Finance Base, Supply Chain Base or Combo Base. This pooled approach enables finance-only or supply-chain-only deployments that can expand later using the pooled Base model, making SAP Cloud ERP accessible to smaller teams that previously fell below the 25-user threshold.​

How Lower Entry Requirements Change Cloud ERP Decision Criteria

For technology executives evaluating cloud ERP platforms, the reduction to 15 users fundamentally alters the economic viability of SAP Cloud ERP for midmarket organizations and departmental implementations. Previously, companies with fewer than 25 core ERP users faced the choice of purchasing unused licenses to meet minimum requirements or selecting alternative platforms better suited to smaller deployments. The new threshold enables organizations to size their Base license footprint in smaller increments, providing a more flexible starting point for smaller teams, a clearer structure for combining different user types, and granular scaling through the new Tier 1 band.​

SAP’s nested license model, where higher-tier licenses include the capabilities of lower-tier ones, ensures consistent rights across user types and simplifies license planning within organizations. This structure addresses a persistent challenge in cloud ERP licensing where organizations struggled to map diverse user populations to rigid license categories without over-purchasing capacity.

Impact of Shift Toward Midmarket Deployments​​

The change reflects broader market dynamics where SAP competes against cloud-native ERP vendors offering more flexible user models and lower entry costs for midmarket deployments. SAP’s GROW with SAP offering, designed for small and mid-sized businesses with revenues below $1 billion, already offered Base editions starting at 15 Full User Equivalents (FUEs), while Premium editions required 25 FUE minimums.

SAP S/4HANA Cloud Public Edition targets companies with annual revenues up to $2 billion, emphasizing simplicity and standardization for cloud-focused ERP strategies. Public Edition suits organizations with linear processes closely aligned with SAP standard configurations and low customization requirements, as well as newly founded companies emerging from business unit spin-offs that lack historically grown processes and want scalable ERP systems. However, the platform limits implementation to greenfield scenarios and does not support direct migrations from SAP R/3 or ECC, requiring organizations planning transitions from older SAP products to implement new systems from scratch.

When evaluating SAP Cloud ERP with the new 15-user minimum, technology executives should prioritize efficient user role mapping to license types, particularly when starting within the 15–24 user Tier 1. Organizations must assess whether their processes align with SAP standard configurations that Public Edition supports, as extensive customization requirements typically necessitate Private Edition or on-premise deployments. The pooled Base model enables phased functional rollouts, allowing companies to begin with Finance Base or Supply Chain Base and expand later without replacing the entire licensing structure.​​

What This Means for SAPinsiders

Lower minimums democratize SAP Cloud ERP access for midmarket segments. The reduction from 25 to 15 Base users removes a significant barrier for organizations that require enterprise-grade ERP capabilities but lack sufficient user populations to justify previous minimums. This change enables departmental implementations, subsidiary deployments, and small business adoptions that were previously economically unviable, expanding SAP’s addressable market. Enterprise architects should reassess whether organizations previously considered too small for SAP Cloud ERP now fall within viable implementation parameters.

Pooled licensing across Finance and Supply Chain Base creates architectural flexibility. The ability to allocate 15 users in any combination across Finance Base, Supply Chain Base and Combo Base enables organizations to implement core financial processes first and expand into supply chain, manufacturing, or other functional areas incrementally without restructuring licensing agreements. This flexibility reduces implementation risk by allowing proof-of-value in limited scope before enterprise-wide rollout, while the nested license model ensures users retain access to lower-tier capabilities as they move to higher tiers.

The tier 1 introduction signals SAP’s strategic pivot toward midmarket cloud growth. The establishment of a distinct 15 to 24 user tier rather than simply lowering existing minimums reveals SAP’s recognition that midmarket cloud growth requires granular pricing bands that accommodate diverse organizational sizes. This tiering strategy positions SAP to compete more effectively against cloud-native competitors offering consumption-based pricing and unlimited user models, while maintaining the revenue predictability that subscription minimums provide.