SAP ECC End of Life and RISE with SAP – Licensing, Cost, and Negotiation Strategies
Executive Summary
SAP ECC’s end-of-life in 2027 marks a turning point for enterprise ERP strategy. CIOs must navigate retiring a decades-old system and embracing SAP’s next-generation RISE with SAP cloud model.
This advisory outlines 15 essential insights on the end of life for SAP ECC and RISE with SAP, covering licensing shifts, cost implications, and negotiation strategies, to help IT, procurement, and finance leaders plan wisely.
It provides a clear-eyed look at the risks of staying on ECC, the realities of RISE’s subscription model, and actionable steps to control costs and avoid lock-in.
First, learn about SAP RISE.
1. ECC 2027 End-of-Life: Deadline, Risks, and Options
SAP will end mainstream support for SAP ECC (ERP Central Component) on December 31, 2027. After this date (and a pricey extended maintenance option until 2030), running ECC will mean that no new patches or updates will be available.
The risks of relying on an unsupported core system are significant, ranging from security vulnerabilities to regulatory non-compliance and increased maintenance costs.
Global enterprises must now weigh their options: migrate to SAP S/4HANA (the modern successor to ECC) via RISE or traditional licensing, pay SAP’s extended support premiums, or consider third-party support as a short-term bridge.
The clock is ticking, and each path comes with its own cost and risk trade-offs.
Example: A multinational manufacturer delayed its S/4HANA project and faced the 2027 deadline with no migration in sight. To avoid running ECC unsupported, they had to pay SAP an extra 2% maintenance fee for 2028–2030 support and allocate emergency budget for a rushed migration. This reactive approach drove up costs and left little time for strategic planning.
Takeaway: Don’t wait. Treat ECC’s end-of-life as an urgent program. Begin planning your S/4HANA transition now – whether through RISE with SAP or another route – to avoid costly last-minute fixes.
If migration by 2027 isn’t feasible, secure interim support (such as extended maintenance or third-party support), but use that time wisely to execute your roadmap.
2. RISE with SAP – SAP’s Cloud Path to S/4HANA
RISE with SAP is SAP’s flagship “ERP as a Service” offering designed to entice ECC customers into the cloud. It bundles S/4HANA Cloud (the new ERP software), infrastructure (hosting on SAP’s cloud or hyperscalers), and basic technical services under a single subscription. For CIOs, RISE represents a one-contract solution to modernize core ERP without managing hardware or multiple vendors.
It offers two deployment flavors: a Private Cloud Edition (single-tenant, allowing more customization to accommodate complex global businesses) and a Public Cloud Edition (multi-tenant SaaS, standardized for faster adoption).
RISE promises a faster route off ECC with SAP handling much of the back-end responsibility.
Example: An international retail chain saw RISE with SAP as a way to simplify their S/4HANA migration. Instead of purchasing new servers and hiring BASIS experts to run S/4HANA, they signed a RISE contract. SAP and its cloud partners now manage system uptime, patches, and updates. This relieved the retailer’s IT staff of infrastructure duties – but also meant SAP became their sole IT provider for ERP, with new dependencies and less direct control.
Takeaway: Understand what RISE includes – and doesn’t.
It’s not a magic wand; it won’t run your migration or change management for you. Ensure RISE’s scope aligns with your needs: confirm the level of customization the private cloud allows, what services (such as implementation or advanced support) are excluded, and how service levels are managed.
If you have unique industry requirements or prefer to control your infrastructure, compare RISE to a traditional approach (on-premises or self-managed cloud).
The key is aligning the RISE model to your enterprise’s operational reality, not just SAP’s sales pitch.
3. Licensing Model Shift: From Perpetual to Subscription
Moving from ECC to RISE means a fundamental licensing change.
Under ECC, enterprises bought perpetual licenses for a one-time fee and paid annual support (typically ~22% of license cost) – a capital expenditure model.
RISE replaces this with a subscription (operating expense) that bundles software usage and support into recurring fees. Licensing metrics also change: instead of named user types and engine metrics, RISE uses Full User Equivalents (FUEs) or similar constructs to measure consumption.
Different user roles (e.g., Professional vs. Casual users) are combined into a single FUE count, which determines your subscription price.
This simplification has a catch: you commit to a set number of users (or FUEs) for the contract term, so over- or underestimating can significantly impact costs.
Before leaping, CIOs and procurement must grasp how their current usage will translate under RISE’s metrics.
Pricing Model Comparison: How Traditional ECC Licensing Compares to RISE with SAP
| Traditional SAP ECC (On-Premises) | RISE with SAP (Cloud Subscription) |
|---|---|
| License Type: Perpetual license (one-time buy) with annual maintenance fee. You own the software rights indefinitely. | License Type: Subscription service. Pay-as-you-go rights to use S/4HANA, as long as you subscribe (no perpetual rights). |
| Infrastructure: Self-managed. You run SAP on your own servers or chosen cloud, bearing hardware and IT costs. | Infrastructure: Included in RISE. SAP provides and manages cloud hosting (private or public cloud) as part of the package. |
| Support & Patches: Annual support contract (e.g. 22% of license cost) gives upgrades and fixes. You apply upgrades on your schedule. | Support & Updates: Included in subscription. SAP handles system updates (especially in public cloud) and provides support. Less flexibility on timing of upgrades, especially in SaaS model. |
| Licensing Metric: Named users by type (Professional, Limited, etc.) + add-on product licenses (engines). Risk of shelfware if users not utilized. | Licensing Metric: Bundled user count (e.g. FUEs) and possibly data volume or other usage. Simplified metric but requires careful estimation. Over-committing means paying for unused capacity. |
| Upfront vs. Ongoing Cost: Significant upfront purchase, then lower yearly maintenance. CapEx heavy initially, stable OPEX later. | Cost Model: No upfront license cost, but higher ongoing subscription fees that can total more over time. Pure OPEX, which may be favorable for budgeting but could cost more in 5+ year TCO. |
| Flexibility & Lock-In: You can switch support vendors or pause maintenance (at risk) since you own the license. More control over environment and usage. | Flexibility & Lock-In: SAP is one-stop provider (software + infrastructure). Harder to leave – if you stop subscribing, you lose rights and must migrate off. Less freedom to tweak environment outside SAP’s cloud policies. |
Takeaway: Map your current licenses to the new model.
Before signing a RISE deal, analyze your existing SAP use: number of active users, license types, and add-ons.
This helps ensure the FUE count or subscription tier you commit to is right-sized. Negotiate the treatment of your legacy licenses. SAP often requires you to retire or “park” them during the subscription to prevent double use.
Try to get credit for the remaining value of your ECC maintenance (SAP may offer migration discounts or credits).
Most importantly, recognize that this shift transfers more control to SAP (since they run the environment).
Weigh the trade-off between convenience and flexibility when deciding if RISE’s licensing model truly benefits your organization in the long run. Granting licenses to avoid unnecessary costs.
Read more about understanding FUE licensing, replacing named users.
4. Cost Implications and Hidden “Gotchas”
At first glance, SAP’s all-in-one subscription may look straightforward, but total cost of ownership (TCO) can surprise you.
RISE with SAP often comes at a premium price – it includes infrastructure, which SAP doesn’t give for free, and it aims to lock in your spend for years.
CIOs must examine the cost drivers and potential hidden fees:
- Growth and Scalability Costs: RISE contracts typically fix your user count for the term. As your business grows, additional users or increased data volume will likely incur higher costs (often at less favorable rates). Conversely, if you over-estimate usage, you still pay for capacity you don’t use.
- Extra Environments & Add-Ons: The standard RISE subscription may include a production system and a limited number of non-production systems. Do you need a dedicated training system, an extra test client, or additional storage? Those often incur extra fees. Similarly, some SAP products (industry solutions, certain cloud services) might not be included and come as add-ons.
- Indirect Access & Third-Party Systems: Connecting non-SAP systems or IoT devices to S/4HANA (also referred to as indirect usage) can still incur licensing costs. RISE doesn’t automatically eliminate digital access fees – you may need a separate agreement or ensure your subscription covers a certain document volume if, say, a CRM or e-commerce system feeds data into SAP.
- Upgrade and Performance Buffers: While SAP manages the cloud infrastructure, if your usage demands more CPU, memory, or throughput than initially sized, be prepared for an upsell. Likewise, after the initial term, renewal prices can jump if not negotiated upfront (a common vendor tactic once you’re dependent on their cloud).
Example: A global services company compared a 5-year cost of staying on ECC versus moving to RISE. The RISE quote was 30% higher per year than their current spend – partly because it bundled infrastructure and new SAP tools they weren’t using on ECC. Additionally, they discovered the RISE deal assumed a user count 15% above their actual need (padding for growth that might not happen). After challenging these figures, they negotiated a lower user commitment and trimmed unnecessary components, saving millions. Another firm on RISE found out mid-term that connecting a new third-party app required a digital access license, which hadn’t been budgeted.
Takeaway: Scrutinize the fine print and model your TCO.
Don’t assume moving to the cloud will automatically save money.
Do a side-by-side cost comparison: What will you spend over 5–10 years on RISE vs. upgrading ECC on-prem (including hardware refresh and staff)? Identify all potential extras in the contract, including additional environments, storage, network bandwidth, and third-party software integrations, and obtain clarity on their associated costs.
Negotiate for transparency (e.g., a bill of materials) so you know what you’re paying for. Ensure you have price protections: try to cap annual increases and lock in pricing for any future capacity needs.
A well-informed cost analysis prevents nasty surprises and strengthens your case when seeking budget approval from the CFO.
Learn more about indirect access audits and digital access rules.
5. Negotiating the RISE Contract: Strategies for CIOs and Procurement
A RISE with SAP agreement is not just another license deal – it’s a long-term marriage. SAP’s standard contracts often favor the company, so enterprise buyers must proactively negotiate key terms to protect their interests. Contract length is one critical factor: RISE deals commonly span 3 to 5 years (with 5-year terms increasingly pushed).
While a multi-year commitment can secure better discounts, it also ties your hands. There are steep penalties for early termination – essentially, you’re on the hook for the full term’s fees even if your plans change.
Another area to watch is renewals: after the initial term, SAP may raise prices significantly (knowing it’s hard for you to walk away by then).
Negotiation is your chance to bake in safeguards now.
Example: A global consumer goods company signed a 5-year RISE contract without addressing renewal terms. By year 5, they had limited alternatives and SAP’s renewal quote came in 20% higher. They had lost their leverage. Contrast that with another enterprise that, during negotiation, insisted on a clause capping any renewal increase to 5% and secured rights to reduce their user count by 10% at renewal if business conditions changed. This foresight saved them from “lock-in fatigue” and ensured the deal could flex with their organization.
Takeaway: Negotiate as if it were an outsourcing deal.
Key strategies include:
Get everything in writing: Verbal assurances from sales (such as “we’ll allow dual use of ECC and S/4 during migration” or “we’ll be flexible if you need more time”) are worthless unless they are included in the contract. Spell out any special conditions, such as co-existence periods, specific service levels, or license conversions, in the agreement.
Push for flexible terms: If a 5-year term is too risky, consider a 3-year term or a mid-term checkpoint. At a minimum, negotiate options to adjust the subscription if you divest businesses or downsize – you don’t want to pay for users who have departed.
Embed renewal protections: Don’t leave the renewal to chance. Negotiate price caps or defined renewal rates now to secure your position. Even if SAP resists, any agreed limit (or even an option to extend at the same price for an extra year) gives you leverage later.
Safeguard exit and rollback: Clarify what happens if you choose not to renew RISE.
Ensure you can access your data and transition out without service disruption.
If possible, negotiate a conversion clause – e.g., the ability to convert to on-premises S/4HANA licenses if you leave RISE, at a predictable cost. Without this, you might find yourself with no ERP rights if you break up with SAP’s cloud.
Consider phased commitments: If you’re unsure about migrating all systems to RISE, consider negotiating a phased approach.
Perhaps commit a portion of your landscape to RISE and retain flexibility for the rest until proven. This can avoid a costly mistake of putting everything in one basket.
Learn more about comparing the costs of RISE and maintaining ECC.
As you transition to S/4HANA and RISE, be mindful of compliance and strategic risks beyond just cost.
Software audits have long been a pain point for SAP customers on ECC – indirect usage, misclassified users, or engine overuse could trigger hefty back-license fees.
When moving to RISE, some audit risks diminish (since you’re paying a subscription based on agreed metrics), but they don’t vanish entirely.
SAP can still audit usage against your contract (for example, ensuring you haven’t exceeded user counts or used components not included in your subscription).
Additionally, suppose you plan to drop SAP support for ECC (perhaps using third-party support to extend ECC’s life), be prepared for an audit before your SAP maintenance lapses.
In that case, SAP often audits customers around the end-of-support date to verify compliance. Another risk factor is the loss of flexibility: under RISE, you can no longer choose third-party support or freely delay upgrades.
You’re on SAP’s timetable. If a module in S/4HANA doesn’t meet your needs, you can’t fall back to ECC because it’s retired.
These constraints underscore the importance of due diligence.
Example: Consider a financial services company that decided to use a third-party support provider for ECC from 2028 to 2030 to save costs. Before the switch, SAP conducted an audit and found they had not properly licensed a custom app’s indirect access to ECC, leading to an unexpected bill that eroded the savings. In another case, a global firm on RISE underestimated their use of SAP’s Business Technology Platform (BTP) for integrations – halfway through the contract they exceeded the included BTP credits and had to purchase additional capacity at premium rates. Both cases highlight how compliance oversights can bite even after you think you’ve “moved on” from traditional licensing.
Takeaway: Keep compliance in focus and maintain leverage. Proactively address any known license gaps before migrating – for instance, resolve your Digital Access (indirect use) licensing so it doesn’t haunt you later.
If you’re partially on ECC through 2027 or later, maintain good software asset management (SAM) practices to avoid audit penalties.
When you visit RISE, continue to monitor usage against contract entitlements (users, data, and transactions) so you can negotiate adjustments before exceeding them.
Also, consider your IT strategy in the long term: avoid being overly reliant on SAP’s ecosystem, as this can limit your ability to adopt innovations or switch providers if needed.
Some enterprises establish a parallel innovation platform or keep certain non-SAP systems to ensure SAP remains responsive to their needs.
In short, enter the RISE era with your eyes open on compliance and an exit strategy in your back pocket.
Read more negotiation strategies for end‑of‑life transitions.
Recommendations
- Start Planning Now: Develop a detailed S/4HANA migration roadmap well in advance of 2027. Early planning secures budget, resources, and executive buy-in, avoiding a last-minute scramble.
- Assess All Options: Don’t assume RISE with SAP is the only path. Evaluate side-by-side: RISE vs. traditional S/4HANA licensing vs. third-party support extension. Select options that align with your business’s strategy and risk tolerance.
- Benchmark Your Costs: Before any negotiation, benchmark current ECC costs (licenses, maintenance, infrastructure) against RISE proposals. Use those numbers to challenge SAP’s quote and ensure any promised “savings” are real.
- Optimize License Usage: Clean up and optimize your SAP license usage now to ensure optimal performance. Eliminate or re-harvest unused user licenses, and address indirect access. This baseline optimization can reduce the size (and cost) of your RISE subscription or S/4 licenses.
- Negotiate Value-Adds: Leverage the ECC end-of-life urgency. Push SAP for additional value – e.g., include extra sandbox systems, training credits, or advisory services in the deal. SAP is keen to lock clients into RISE; use that to get concessions that ease your transition.
- Future-Proof the Contract: Insist on terms that allow flexibility. This includes renewal caps, rightsizing adjustments, and clear exit provisions, as previously discussed. A well-negotiated contract will save headaches (and dollars) later.
- Governance and Skills: Treat the move as a major transformation program. Invest in internal skills (project managers, solution architects familiar with S/4HANA) and strong governance. Having in-house expertise and a steering committee will help keep the project on track and honest.
- Test and Phase Migration: Wherever possible, do a phased or pilot migration before a big bang. Learn from a smaller deployment (for example, by moving one region or a subsidiary first) to uncover issues with licensing or performance, and then adjust your approach for the wider rollout.
- Monitor and Review: Once on RISE or S/4HANA, regularly review usage and costs. Cloud models make it easy to consume more and lose track of what you’re using. Quarterly governance meetings can ensure you’re using what you pay for, and flag any overages early to address with SAP.
- Engage Independent Expertise: Consider using independent SAP licensing advisors or negotiation experts. An outside perspective can identify contract pitfalls and saving opportunities that IT or procurement might miss, potentially yielding significant cost avoidance.
Checklist: 5 Actions to Take
1. Build Your ECC Exit Timeline: Create a detailed timeline from now until 2027 (or 2030 with extended support). Mark decision points: when to choose a migration strategy, start project, freeze ECC changes, etc. This ensures that everyone is aware of the critical deadlines.
2. Inventory and Clean House: Do a full inventory of your current SAP environment. List all ECC licenses, user counts, engines, and interfaces. Cleanup any dormant users or unnecessary customizations. A leaner ECC footprint means a smoother S/4 move.
3. Engage SAP (and Others) in Dialogue: Open communications with SAP about your plans – request proposals for both RISE and traditional S/4HANA licensing. Simultaneously, explore third-party maintenance quotes or private cloud hosting options. Having multiple quotes and scenarios gives you leverage in negotiations.
4. Form a Cross-Functional Task Force: Set up a team with IT, procurement, finance, and key business stakeholders. Moving off ECC affects many departments. A task force ensures licensing, technical, and business considerations are all covered in your strategy (and that negotiation priorities are aligned with business needs).
5. Draft Your Negotiation “Wish List”: Before sitting down with SAP, define your must-haves (e.g., price lock for 5 years, ability to reduce users if divestiture happens, inclusion of certain SAP modules). Prioritize them and plan your negotiation approach. Know where you can compromise and where you need to stand firm. This preparation will help you drive the contract discussion rather than react to it.
FAQ
Q1: We have numerous customizations in ECC. Will RISE with SAP support those in S/4HANA?
A: In RISE’s private edition, you can carry over many custom ABAP programs, but you should expect to refactor some to fit S/4HANA’s data model. Highly customized ECC environments may face challenges in the standardized RISE public cloud. It’s crucial to analyze each customization, as some may be replaced by standard S/4 functionality or modern SAP Fiori applications. Plan time for remediation and consider using SAP’s Business Technology Platform for extensions to keep the S/4 core clean.
Q2: What if we’re not ready by 2027? Can we extend ECC support further?
A: SAP offers extended maintenance through 2030 for an extra fee (usually +2% on annual support). Beyond that, SAP has announced a Private Edition, Transition Option – essentially a cloud-based interim service to run ECC in SAP’s cloud from 2031-2033 for the largest customers who need more time. Alternatively, some companies opt for third-party support firms to cover ECC after 2027, which can be more cost-effective but means no new SAP updates will be available. All these are stop-gaps – the core issue remains that eventually ECC must be replaced or run without updates. Every extra year comes at a cost, so use any extension wisely to complete your transformation.
Q3: How does converting our existing licenses to RISE work?
A: Typically, when you sign a RISE contract, you agree to shelve or terminate your old ECC licenses for the functionality you move to S/4HANA. You stop paying maintenance on those licenses and start paying the RISE subscription. SAP may offer a one-time credit or discount, acknowledging the value of your unused maintenance period or past investment – but don’t expect to receive the full value. Ensure that any conversion terms are properly documented. In some cases, you can negotiate a clause to reinstate or reuse those licenses if you exit the RISE subscription (this is rare and must be negotiated). Essentially, moving to RISE is often a one-way street; know that you’re trading in perpetual rights for cloud access.
Q4: Will SAP continue to audit us after we transition to RISE with SAP?
A: The nature of audits changes. On RISE, SAP isn’t auditing classic license usage in the same way, since you’re not running ECC on your own. However, SAP will ensure you stick to contract terms – for instance, that you haven’t exceeded the number of contracted users, or used components outside of your subscription. They can request reports or use telemetry to verify compliance. If you keep some systems on-premises (in a hybrid scenario) during migration, they can still be subject to traditional audits. Always maintain compliance records and adhere to agreed-upon usage to avoid any surprises. And if you plan to discontinue SAP support (for example, by using a third-party support provider before RISE), anticipate an audit at that transition.
Q5: What are some common pitfalls others have faced in RISE deals?
A: A few recurring ones: (1) Underestimating migration effort – treating RISE as a turnkey solution and then struggling with data and process changes; (2) Overcommitting on contract size – buying more users or services than needed, leading to wasted spend; (3) Ignoring renewal clauses – getting a nasty shock at renewal when costs jump; (4) Assuming “all inclusive” – later finding out some features (like advanced analytics, extra environments, or even basic things like email integration) needed separate licenses; (5) Losing leverage after signing – once you’re in a long contract, SAP knows you’re dependent, so any additional needs or expansions might come at a premium. Learning from these pitfalls, successful enterprises enter RISE deals well-informed, benchmarked, and with a solid negotiation plan, often with expert assistance.
Read SAP Licensing Changes and the 2027 Deadline.
Read about our SAP Advisory services for Rise.
