After weeks of speculation, SAP confirmed that it will offer a Rise with SAP package that extends support for its legacy systems beyond the stated 2027 end-of-support deadline.
The offering, called SAP ERP, private edition, transition option, comes with conditions and is intended primarily for SAP's customers that are still running very large and complex SAP ERP Central Component (ECC) on-premises systems.
The move is welcome news for SAP's largest customers and acknowledges the realities of the difficulties they face in implementing cloud transformation, according to analysts.
The new cloud subscription service is designed to help large companies with complex installations move from SAP ERP systems to the company's cloud ERP, wrote Stefan Steinle, head of customer support and cloud lifecycle management at SAP, in a blog post about the new offering.
The transition option is not mandatory but will require customers to sign a Rise with SAP cloud subscription contract that's centered on SAP ECC. It will include dedicated services to help with the migration to S/4HANA Cloud as well as patches for security, legal and software issues. It will be available for purchase starting in 2028 and will be active for usage from 2031 to 2033, according to the company.
"SAP is pre-disclosing this offering because we understand that customers with complex landscapes need advance notice, hence we want to give sufficient time for planning purposes," Steinle wrote.
There are conditions for the transition option, including that customers must move to the SAP HANA database prior to the end of 2030 and will need to adjust the usage of other third-party tools such as Java, which will no longer be supported. The offering is also centered on SAP ECC systems and will not include "the full scope of SAP Business Suite 7," Steinle wrote.
Further details on availability and subscription pricing will be available in Q2 2025.
An olive branch to complicated customers
SAP executives realized that they had to provide their customers with the most complex environments and a more practical transition time frame, assuming that they are intent on moving to the cloud but need more time, according to Jon Reed, co-founder of Diginomica.
"SAP has essentially offered an olive branch to some of their most complicated customers," Reed said. "These are significant projects for them, and having such a stringent deadline can be counterproductive."
One reason for concern is that if these customers are under too much time pressure, they might not make a succesful cloud transition and fail to rethink their processes and examine their customizations, he said.
Ultimately, the transition option looks like a positive offering for some customers, but it also helps SAP's cloud business story by helping their cloud numbers and demonstrating Rise with SAP growth, Reed said. Also, not all customers that may be eligible and ready for the option will be interested in going with Rise with SAP.
"This shows that they're listening to what customers need, but to a point because if you want to do a cloud transition but not do it with Rise with SAP, you may struggle to achieve the same concessions," he said.
Overall, the transition option gives customers with the largest and most complex systems more time to make an extremely material upgrade, said Brian Sommer, founder and president at TechVentive.
"As these customers successfully navigate this upgrade, I suspect future functional and technical upgrades will take far less time and cost," Sommer said. "In the long run, it should help these firms not only stay current but also take maximum advantage of advanced capabilities and new business model opportunities."
Sommer compared the dilemma that SAP and its large customers face to Newton's first law of motion, where an object will not change its motion unless a force acts on it and his second law, where the force on an object is equal to its mass times its acceleration.
"Inertia [the first law] is why a number of SAP ECC customers are still running that [system]," Sommer said. "It's my observation that these firms want to move to modern platforms and use advanced technologies like AI, but key factors have prevented that to date."
When you make changes this big, there's also the possibility that problems could arise, so very large firms need to approach these upgrades carefully and often do so infrequently.
Brian SommerFounder and President, TechVentive
SAP customers have some of the largest business software footprints (the mass), and they can't migrate quickly (acceleration) unless they have the funds and resources (the force), he said.
"When you make changes this big, there's also the possibility that problems could arise, so very large firms need to approach these upgrades carefully and often do so infrequently," Sommer said. "This announcement helps large organizations get the time they need to make these major changes a successful reality."
The deadline extension is helpful, but customers shouldn't delay the cloud move, according to Holger Mueller, vice president and principal analyst at Constellation Research.
"They must move to HANA [database], clean up the tech stack and make sure they are licensed," Mueller said. "At the end -- even with three more years available -- it is time for SAP customers' [chief transformation officers] to get going with its migration towards S/4HANA and probably best to go to the public cloud edition."
The big variable for 2025 is going to be success and adoption of SAP Business AI, he said.
"If SAP creates enough value, customers will be self-motivated to move to S/4HANA as soon and as fast as they can," Mueller said. "So, 2025 is a critical year for the SAP customers, SAP and the SAP ecosystem, and all eyes are on the value and uptake of the AI offerings that are gated to the public cloud."
Transition option helps with thorny third-party problem
One key problem that the transition option addresses is enterprises' need to maintain underlying third-party products that are integral to the legacy SAP ERP environments, said Joshua Greenbaum, principal at Enterprise Applications Consulting.
Maintaining support on those third-party tools, particularly the Oracle database and Java, another Oracle product, means negotiating with a fierce competitor, Greenbaum said.
"It's hard enough trying to keep people up to date on your own software, but when someone else's software is involved -- someone who's a sworn enemy -- it is more problem than it's worth," he said.
It's extremely practical of SAP to do everything it needs to get these customers on the SAP HANA database and respect the fact that a migration is going to take more time than they'd like, Greenbaum said.
But migrations of this complexity are not quick and easy and won't happen without a lot of hard work, he said. One problem is there is still a dearth of good business cases for making the shift, and that needs to be solved by SAP and its customers.
"No one throws a switch, and you magically migrate. Customers who are signing on for this have to play their part, too, to get the migration strategy going and figure out what to do with the legacy systems," Greenbaum said. "But they do need to get to the cloud sooner rather than later for a lot of reasons."
Jim O'Donnell is a senior news writer for Informa TechTarget who covers ERP and other enterprise applications.
