Converting SAP ECC Licenses to S/4HANA: Migration Licensing Tactics

Converting SAP ECC Licenses to S/4HANA

Introduction: Why ECC-to-S/4 License Conversion Matters

Most large SAP customers have invested millions (even billions) in SAP ECC licenses over the years.

As SAP pushes its client base toward S/4HANA, those ECC license investments are at risk of turning into shelfware once you migrate.

SAP will not automatically transfer your ECC entitlements to S/4HANA – without a conversion deal, your old licenses can’t be used on the new platform.

This leaves CIOs and IT procurement leads asking how to protect the value of their existing licenses during an S/4HANA migration.

Timing adds pressure. Mainstream support for SAP ECC ends in 2027, after which customers face expensive extended support fees.

This “2027 cliff” is driving many to plan their S/4HANA move now. SAP has responded with formal license migration programs to soften the blow.

However, the terms and benefits of these programs vary, and they tend to favor SAP’s interests. It’s critical to approach any SAP license migration with a clear strategy and a healthy dose of skepticism.

With the right tactics, you can convert ECC licenses to S/4HANA in a way that preserves your investment and avoids overspending. Without preparation, you could pay for more than you need or give up hard-won license value.

Read our complete guide, SAP S/4HANA & HANA Licensing Guide: Migration, Models, and Cost Optimization.

SAP’s License Conversion Programs Explained

SAP historically offered two main paths for migrating your ECC licenses into the S/4HANA era. Understanding these programs is key to choosing the right approach:

• Product Conversion (On-Premises): This legacy program lets customers perform a license swap from ECC to S/4 on a like-for-like basis. You would map your existing ECC licenses to equivalent S/4HANA products, essentially converting ECC licenses to S/4HANA licenses directly. The big advantage was that your SAP ECC contract stayed intact – all your negotiated discounts, user counts, and special terms carried over. It allowed a phased migration with parallel use rights (ECC and S/4 running concurrently) under the same contract. In terms of cost, product conversion required little or no net-new license spend for equivalent functionality; you kept paying your regular maintenance on the original licenses. The trade-off was limited flexibility: you generally couldn’t change license types or drop unused licenses in this mode. (Notably, SAP has phased out the product conversion program for most customers in recent years, making this option unavailable unless you already had certain S/4HANA transition licenses in place.)
• Contract Conversion (RISE or New Contract): This is the primary SAP license migration path today. In a contract conversion, you terminate your old ECC license contract and purchase a new S/4HANA contract – either as traditional on-premise licenses or as a subscription (e.g. RISE with SAP cloud offering). SAP gives you credit for the net value of your existing ECC licenses to offset the cost of the new S/4HANA licenses or subscriptions. In effect, your past investments are applied as a discount on the S/4 deal. This approach lets you reshape your license mix: you can retire shelfware and buy a more optimal set of S/4HANA products. It’s an opportunity to simplify contracts and adopt modern metrics (like Digital Access and updated user definitions). However, all new terms and pricing apply – you lose any grandfathered discounts or flexible terms from your old contract. Cost-wise, contract conversion often involves some additional spend beyond your credits, especially if SAP’s credit doesn’t equal 100% of the new license fees. (Initially, SAP allowed up to 90% credit coverage; today, the SAP S/4HANA conversion ratios for credits are lower – e.g., 70% – and may shrink as 2027 nears.) Contract conversion is essentially a “start fresh” approach, which can be done for on-prem S/4HANA or as part of a RISE subscription deal, depending on your strategic direction.

In summary, product conversion prioritizes investment protection and continuity (at the cost of flexibility).

In contrast, contract conversion allows a clean slate and portfolio overhaul (at the cost of giving up your old contract and possibly incurring net new costs). Next, we’ll dive deeper into how each approach works and what to watch out for.

How Product Conversion Works

Under product conversion, you migrate licenses to S/4HANA within the framework of your existing contract.

Here’s how it works and what to consider:

• Mapping of User Licenses (Named Users → FUE): In an on-premises product conversion, your named user licenses from ECC (e.g., Professional User, Limited Professional, Employee User, etc.) can be mapped to their S/4HANA equivalents. You typically retain the same number of users with equivalent usage rights in S/4. If you had legacy user types that don’t exist in S/4, SAP would assign the closest equivalent role. Notably, if you later move to a subscription model like RISE, SAP now uses Full User Equivalents (FUEs) instead of traditional named users. In that case, part of your transition will involve converting those named users into FUE metrics. For now, with pure product conversion on-prem, you keep your existing user metrics – which avoids the complexity of FUE calculations, but also means you don’t get the simplified single-metric model. The key is to ensure no users are left unlicensed in the S/4 environment – map every ECC user license to an appropriate S/4HANA license type so there are no surprises in compliance.
• Mapping of ECC Engines to S/4HANA Engines: Apart from users, you likely own engine or package licenses in ECC (modules measured by metrics like CPUs, orders, revenue, etc.). Each of these needs a counterpart in S/4HANA. Some mappings are straightforward (e.g., SAP ECC Financials → S/4HANA Finance), but others can be tricky. SAP S/4HANA’s product structure is different; certain ECC functionalities might be split into multiple S/4 components or renamed. You can only convert products you already own – product conversion won’t magically give you new modules you didn’t previously license. If an exact equivalent exists, SAP usually provides a 100% license credit to swap your ECC engine for the S/4 version. But if S/4 has additional functionality or a different metric, there may be a need to adjust quantities or buy an add-on. It’s crucial to perform a line-by-line mapping of your ECC bill of materials to S/4HANA products, ensuring that nothing you need is lost in translation.
• Maintenance Fee Implications: One benefit of product conversion is maintenance fee stability. Since you aren’t buying new licenses (just swapping what you have), your annual maintenance base remains the same as it was under ECC. You continue paying support on the original license values, with no immediate increase. This protects you from a sudden jump in support costs. However, it also means you continue to pay for any shelfware. Suppose you had 500 users on paper, but only 300 are active. In that case, you’ll still be paying maintenance on all 500 licenses unless you remove them from the contract (which SAP typically doesn’t allow in product conversion). In short, product conversion locks in your current maintenance spend – great if you were efficiently licensed, not so great if you were over-licensed. Be aware that once converted, those S/4 licenses carry the same maintenance percentage (usually ~22% of license value per year) as before.
• When This Approach Makes Sense: Product conversion makes sense if you want a low-disruption transition. It’s ideal for organizations that are undertaking a phased technical migration and want to avoid a big purchase. By preserving your existing contract, you also keep any negotiated perks (volume discounts, special terms on indirect use, etc.) that might be more generous than SAP’s standard S/4 contract. Companies with complex environments may prefer product conversion to enable dual systems (ECC and S/4) to run in parallel without incurring additional licensing costs, as permitted under the existing contract. This path is also attractive if the budget is tight – you leverage what you’ve already paid for instead of spending big upfront. However, note: SAP’s product conversion program has effectively been retired for new conversions as of 2023. It was only available to customers who purchased the special “S/4HANA Enterprise Management for ERP Customers” license. If you didn’t already secure that, SAP will likely steer you toward a contract conversion now. In rare cases (specific industries or regulated scenarios), SAP might still allow a limited product conversion, but it’s the exception. If you do qualify, product conversion can protect your investment in the short term – just be mindful that eventually you may still need a contract conversion to fully adopt S/4HANA’s latest functionality or cloud innovations.

For Insights, SAP HANA Database Licensing Explained: Runtime vs Full-Use and Costs

How Contract Conversion Works

Most ECC customers today will be considering a contract conversion when migrating to S/4HANA. In a contract conversion, you’re fundamentally trading in your old contract for a new one.

Key aspects of this approach include:

• “Swap” to Subscription (RISE or S/4HANA Cloud): The headline change in a contract conversion is that you give up your perpetual ECC licenses and, in exchange, purchase S/4HANA in a new model. This could mean buying new perpetual S/4HANA licenses (and signing a new on-premise license agreement), but increasingly it means subscribing to RISE with SAP or S/4HANA Cloud. RISE is SAP’s all-in-one subscription offering that includes S/4HANA software, infrastructure, and support in a single annual fee. Whether you choose on-prem S/4 or RISE, a contract conversion is essentially starting from scratch on terms – you’ll be under SAP’s latest S/4HANA contract (or cloud subscription agreement) rather than your old ECC contract. One immediate effect: if you move to subscription, you stop paying annual maintenance and instead pay a subscription fee (which covers software, support, and possibly cloud hosting). This shifts your spend from CAPEX (licenses + maintenance) to OPEX (subscription service). It can simplify budgeting, but be aware that you’re now locked into paying that subscription continuously to keep using the software.
• Credits and Conversion Ratios for Existing Investments: SAP markets contract conversions as a way to protect your prior investment via credits. In practice, SAP will evaluate the current list price value of your ECC licenses and apply some credit or “conversion ratio” to your new purchase. It’s rarely a 1:1 credit. For example, if you have $10 worth of ECC licenses, SAP might give you, say, $7M credit toward a $10M S/4HANA purchase – meaning you’d pay $3M net. The exact ratio is negotiable and tends to get worse the longer you wait. (In early S/4 adoption days, customers saw credits up to 90% of their license value; now it might be 70% or even less.) Shelfware licenses usually carry little weight in these calculations – if SAP suspects you never used certain modules or users, they may deem them low value for credit. It’s important to audit your own usage beforehand: identify which licenses are truly needed going forward. You might be better off terminating maintenance on unused ECC licenses before the conversion, so you stop paying for them (though doing so means you won’t get any notional credit for them either). Also, if certain ECC products have no S/4 equivalent, SAP won’t credit those at all. Ultimately, SAP license credit migration is about negotiation: you want as much credit as possible for the software you already paid for, applied to the smallest necessary S/4HANA purchase.
• Losing Perpetual Rights and Flexibility: Beware of what you’re giving up. In a contract conversion, especially one that moves you to RISE or the cloud, you surrender your perpetual license rights for ECC. This means after the migration, if you ever stop paying SAP for S/4HANA (subscription or maintenance), you can’t legally use S/4 or your old ECC system (the ECC contract will be gone). You’re fully dependent on SAP in the future. That can be fine if you intend to stay on SAP long-term, but it’s a big shift in leverage. Additionally, the new S/4HANA contract will come with updated licensing policies. Expect features such as digital access document licensing for indirect use (replacing the old named-user-based indirect usage model). Expect new user definitions (FUEs if in the cloud, or revised user types on-premises). You might also lose any custom agreements from your old contract – e.g., previously negotiated pricing protections or carve-outs will likely not carry over. Flexibility can be lower in some areas: for instance, cloud subscriptions typically don’t allow swapping one product for another later, and usage is capped by what you contractually subscribe to. This is why, if you’re moving to subscription, it’s crucial to negotiate provisions like the ability to true-down or adjust usage at renewal, rather than being stuck overpaying for unused capacity.
• When This Approach Makes Sense: Contract conversion is often the only viable path for customers migrating in 2024 and beyond, because SAP wants everyone on the new model. It makes sense in several scenarios. If you plan to adopt RISE with SAP (cloud) to modernize your infrastructure, contract conversion is mandatory (you can’t bring your old licenses to RISE). It also makes sense if your ECC license landscape is out of alignment with your needs – for example, you have a lot of shelfware, or you need to license new S/4HANA functionality that you never had in ECC. In a contract conversion, you can drop the dead weight and purchase what you actually require, potentially negotiating a better deal on the new package. Companies that want to simplify a messy contract built up over decades often choose this route: you can consolidate multiple ECC contracts into one S/4 contract. Just be aware that SAP will use this as an opportunity to transition you to their latest pricing (which could raise costs over time). This approach is best if you’re committed to SAP long-term and/or moving to the cloud, and you’re willing to trade the comfort of your perpetual licenses for the “clean slate” of S/4HANA licensing. Make sure to do it on your terms (not just SAP’s terms) by negotiating hard on credits and conditions, as we’ll discuss next.

Key Considerations Before Converting

Before you sign any conversion agreement, evaluate these critical factors to avoid pitfalls:

• Like-for-Like Functionality: Ensure the new S/4HANA licenses will cover all the ECC functionality you currently use. Don’t assume every ECC module has a direct S/4 successor included in the base product. For example, some ECC features might now be separate S/4 modules or require additional licenses. Map your business processes to S/4HANA’s product suite to confirm you’re not losing capabilities. If something you use isn’t available in the S/4 package offered, negotiate how it will be licensed (or seek a workaround) before you convert. The goal is to provide true apples-to-apples coverage of your needs, so you’re not left under-licensed after migration.
• Compliance Reset (Beware “Clean Slate” Assumptions): Converting licenses is not a magic wand to erase compliance issues. Some customers believe that moving to a new S/4 contract will resolve any under-licensing or grey areas from ECC. The reality: SAP will likely scrutinize your license usage during the migration process. If you were out of compliance (e.g., too many users, indirect use not licensed), that will come to light, and you’ll be expected to remedy it as part of the new deal. In some cases, SAP might waive certain back penalties if you’re buying into S/4, but they will definitely make you purchase the necessary entitlements in the future. On the flip side, a conversion is an opportunity to clear up compliance proactively – for instance, you can negotiate an indirect usage resolution (swap it for a digital access license) during conversion. Just don’t expect SAP to overlook license gaps; conduct your own compliance audit first so you know where you stand and can address the issue on your terms, rather than SAP’s.
• Digital Access & Indirect Use: Speaking of indirect usage – S/4HANA comes with SAP’s newer Digital Access model for licensing indirect use via documents. SAP has offered conversion programs where you can swap indirect use risk for a set number of digital document licenses (sometimes as a one-time credit or at a discount). Evaluate this carefully. If your ECC environment has a lot of third-party systems creating SAP documents (sales orders, etc.), you might have exposure under SAP’s infamous indirect access rules. Moving to S/4 without resolving this could lead to an audit surprise. Consider negotiating the Digital Access Conversion Program as part of your migration: SAP might grant you a certain volume of document licenses in exchange for some of your existing named-user licenses or for a reasonable fee. This can eliminate uncertainty by giving you a defined entitlement for indirect access. Just ensure the allotment of documents is sufficient for your needs (and try to negotiate some headroom or a discount for any overage). The goal is to start your S/4 contract with no lingering indirect use liabilities.
• Maintenance Credits and Support Alignment: If you’re transitioning from paying maintenance to a subscription model, address what happens to any prepaid maintenance or overlapping support. For example, if you paid annual maintenance on ECC and mid-year, and you switch to RISE, will SAP credit the unused portion? Often, they won’t refund it outright, but this is a point of negotiation – perhaps they can roll it into the new deal as a credit. Also, clarify support levels: S/4HANA support (especially in the cloud) might be bundled differently. If you’re staying on-premise S/4, try to keep your maintenance fee base as low as possible (since it may reset based on the new license purchase price). This might involve negotiating a cap on maintenance percentage or an extended price protection. Finally, if you need to keep ECC running for a while (post-2027) during the transition, negotiate how extended maintenance fees are handled. SAP has been known to offer extended ECC support at no additional charge for a period if it’s part of a conversion deal – but you must get that in writing. In short, every dollar of maintenance or support fee should be accounted for in your conversion plan, either as a credit, a reduced rate, or a defined service in the new contract.

Negotiation Tactics for Conversion

Entering conversion talks with SAP is a one-time chance to realign your spend – be aggressive in protecting your interests.

Here are some tactics to use:

• Demand Investment Protection: You’ve likely spent a fortune on ECC; make SAP recognize that. Insist on “investment protection” where the full value of your existing licenses is credited toward S/4HANA. SAP will try to only give partial credit. Push back by highlighting your long-term support payments and loyalty. While you may not get 100% credit, set your expectation high (e.g., ask for 1:1 credit on functional equivalents) so there’s room to negotiate down. The key is to not leave money on the table – every module and user license should count for something. If SAP’s standard offer is, say, 70% credit, come prepared with why you deserve more (high shelfware proportion, early adopter, etc.). Also, leverage any SAP product conversion program promises that were made to you in the past. The louder you are about protecting past investments, the better deal you’ll net.
• Use Multiple Scenarios as Leverage: Don’t let SAP corner you into a single path. Solicit quotes for multiple migration scenarios – for example, a quote to stay on-premise S/4HANA (perpetual licenses via contract conversion) and a quote for RISE (subscription). By comparing both, you gain leverage. Perhaps the on-prem deal comes out cheaper; you can use that to negotiate the RISE price down (“We might just stick on-prem with product conversion if the cloud subscription isn’t attractive enough”). Conversely, if SAP is pushing RISE hard, consider obtaining a competitive on-premises proposal to keep them honest. In addition, consider third-party support or doing nothing as a BATNA (Best Alternative to a Negotiated Agreement). If SAP knows you have an option to stay on ECC (with third-party support) for a while, or to only do a technical upgrade without buying new licenses, they will be more motivated to sweeten the deal. Simulate different cost scenarios (we’ll show a comparison table later) and don’t reveal your hand too early about which one you prefer. Make SAP compete against itself to give you the best offer.
• Cap Future Price Increases: One of the biggest risks of relinquishing perpetual licenses is the potential for future cost increases. If you move to a subscription, negotiate strict caps on subscription uplifts at renewal. For example, ensure the contract limits price increases to a certain % per year or per renewal term. If you’re signing a 5-year RISE deal, try to lock in the renewal rate (or cap it at a small increase). SAP’s standard cloud contracts might allow 5-7% annual upticks – fight to reduce that. If you’re doing an on-prem conversion and will need to buy more licenses later (say, additional users or add-ons as you expand S/4 usage), negotiate price holds for those future purchases now. You don’t want SAP charging you a lot more for phase 2 licenses two years from now. In short, any contract conversion should include price protections so you’re not hit with surprises after you’re committed. Use your leverage during the conversion negotiation to get these terms; after you sign, that leverage is gone.
• Negotiate Extras and Concessions: Everything is negotiable if you ask. Push for credits or free periods wherever possible. For instance, if you have a lot of unused ECC shelfware, ask SAP for credit for those unused licenses (even if officially they claim they don’t credit shelfware, you might get an extra discount somewhere in the deal to account for it). If you’re signing up for RISE, ask for a free migration period or a short-term free subscription overlap (e.g., “let us use RISE for 3 months at no charge during migration”). Some customers have even negotiated extended ECC support at no extra cost until their S/4 go-live is complete (SAP may agree to keep supporting ECC past 2027 for you if you commit to S/4 now). Also consider asking for services or training credits, or cloud platform credits, as part of the package. SAP sales reps are under pressure to book S/4HANA deals, so use that to your advantage by squeezing every possible perk out of the agreement. And absolutely get all incentives in writing – if the sales team “dangles” something (e.g. a promise that “we’ll throw in X for free”), ensure the final contract or order form reflects it. Verbal promises mean nothing once you’ve converted.
• Retain Exit and Flexibility Clauses: Just because you’re moving to a new contract doesn’t mean you can’t insert friendly terms. In negotiations, try to secure clauses that allow flexibility later. For a cloud deal, consider asking for an opt-out or penalty-free termination clause after a certain period if things aren’t working out – you might not get it. Still, even a lenient termination for convenience with some notice could be valuable. At minimum, ensure there’s a clause on license transfer or re-assignment in case of divestitures or restructures (so you’re not stuck if your company changes). If you remain on-prem, negotiate the right to reclassify users (e.g., swap 10 Professional User licenses for 20 Limited User licenses if needs change) or to swap modules of equivalent value down the road. SAP’s default stance is once you sign, you’re locked in – but with skillful negotiation, you can carve out some wiggle room. Remember, you are the customer with a lot of spending power; don’t be afraid to ask for terms that make your life easier post-migration.

Licenses to Drop During Migration

One big advantage of an S/4 migration is the chance to clean house on your licenses. It’s common for ECC customers to have accumulated a lot of shelfware or redundant modules over the years of growth and acquisitions.

Carrying all of that into S/4HANA will just perpetuate waste. Here’s how to trim the fat:

• Identify Unused ECC Modules: Do a thorough inventory of what you own versus what you actually use. If there are entire components (engines, add-ons) in ECC that your business doesn’t utilize anymore, flag them. For example, maybe you licensed an Industry Solution or an HR module that you never fully deployed. These are candidates to drop in the S/4 conversion. There’s no point paying for support on something you aren’t using. By pinpointing them early, you can plan to exclude them from the new S/4 contract.
• Don’t Carry Forward Shelfware: Shelfware refers to licenses you bought but that sit “on the shelf” unused. When converting, be cautious about automatically converting all licenses one-to-one, especially if a significant portion of them are unused or “shelfware.” In a product conversion, SAP may force you to keep everything (since partial conversions weren’t allowed), which is unfortunate. But in a contract conversion, you have a golden opportunity to drop the dead weight. True, SAP might not give you credit for licenses you drop – but you save by not having to pay for their maintenance or subscription going forward. It may sting to acknowledge sunk costs, but it’s better to shed them than to continue overpaying in S/4. Only carry into S/4 what provides business value. Everything else, cut loose.
• Beware of Bundled Components: When negotiating the new S/4 deal, scrutinize SAP’s proposed Bill of Materials. SAP has a habit of bundling extra components or switching you to broader packages that include functionality you don’t need. For instance, S/4HANA Enterprise might come with embedded analytics or modules that sound nice but aren’t useful to your users – yet they increase the cost. If you see items in the S/4 license list that weren’t in your ECC environment (or that you know you won’t use), challenge them. You can ask SAP to remove or segregate certain components to reduce cost. Do not assume you have to take SAP’s “one-size-fits-all” package. Tailor the new license set to your needs. This is also the time to drop any named user license types that were obsolete – e.g., if you had some expensive developer user licenses that are no longer needed, don’t include them going forward. The endgame is an S/4HANA license portfolio that is lean and mean: no extras, no shelfware, no paying for capabilities you won’t use.

Parallel Use Rights

A practical challenge in any ERP migration is the cutover period. You will likely need to run ECC and S/4HANA in parallel for some time as you roll out, test, and stabilize the new system. Many enterprises anticipate a 6–12 month overlap (or more for a phased deployment by business unit or region).

The last thing you want is to pay double during this period. Here’s how to handle parallel use:

• Negotiate Dual-Use Upfront: Parallel use rights are not automatically granted unless you stay on the same contract (as in product conversion). If you’re doing a contract conversion, you must negotiate a dual-use clause. This clause should explicitly permit you to continue operating your ECC production system for a defined period while S/4HANA is live, without requiring additional licenses. Ideally, SAP should agree that your existing licenses count for both environments during the transition. Bring this up early in negotiations – it’s a common need, and SAP often will accommodate it if asked (they know big bang cutovers are risky).
• Avoid Double-Paying: Insist that any parallel run period is at no additional license cost. For example, if you cut over in Q4, you shouldn’t have to pay full ECC maintenance in Q4 and also pay the S/4 subscription starting in Q4. One approach is to get a grace period on one of the contracts – e.g., SAP might extend your ECC support a few months into the new S/4 contract for free, or delay the start of S/4 subscription billing until ECC is shut down. Some customers have successfully negotiated 6 months of dual-use at no charge. At the very least, secure a deep discount on overlapping months. Make sure this is documented in the contract or side letter.
• Set a Clear Timeline: Define how long you need to run both systems and get SAP’s agreement. Commonly, 6 months is given, but if you anticipate 12 or 18 months, state it. It’s better to ask for more time and not need it than to underestimate. Also, clarify how license counts are measured during overlap – e.g., if you have 500 users licensed, you’re not suddenly required to have 500 in ECC + 500 in S/4 separately; the same 500 users should cover both. Having this clarity will prevent any compliance ambiguity if an audit occurs during the transition. Once the period ends, ensure you won’t be penalized for any usage of ECC beyond that unless formally extended.

Bottom line: plan for parallel operations and bake it into the deal. It’s an often overlooked but crucial part of an SAP contract conversion negotiation.

You need breathing room to ensure S/4HANA is fully functional before turning off ECC, and you shouldn’t pay twice for that safety net.

Cost Optimization Scenarios (Comparison Table)

Depending on your strategy, the licensing cost profile of an S/4HANA migration can vary dramatically.

Below, we compare three common scenarios: staying on-premises with product conversion, moving to RISE with contract conversion, and a hybrid approach to illustrate their cost and licensing impacts:

Interpretation: If pure cost minimization in the short run is your goal and you qualify, an on-prem product conversion keeps new spending near zero (but note you’re still paying the same maintenance, so it’s not a true cost reduction).

RISE can bring a lot of value in terms of shedding waste and modernizing, but you must weigh the long-term subscription costs and loss of ownership.

A hybrid approach can balance risk and cost by splitting what moves now versus later, but you must manage complexity and ensure you’re not penalized for partial adoption. Always run the numbers for the total five-year cost under each scenario, not just the upfront, to make an informed decision.

Checklist: ECC-to-S/4 Conversion Readiness

Before you pull the trigger on any license conversion or S/4HANA contract, run through this readiness checklist to make sure you’ve covered all bases:

• Inventory Your ECC Licenses: Compile a detailed list of all SAP ERP/ECC licenses you own – including user types, engine metrics, industry solutions, databases, and third-party add-ons. You can’t plan effectively without knowing your starting point.
• Map to S/4HANA Equivalents: For each item in your inventory, determine the S/4HANA equivalent or migration path. Map ECC modules to S/4 products, and ECC named users to S/4 user types or FUE roles. Identify any gaps where a direct equivalent isn’t obvious and flag those for discussion with SAP.
• Identify Shelfware to Drop: Analyze usage data to see which licenses are unutilized or underutilized. These are the prime candidates to eliminate in the conversion. Make a conscious decision about each – either find a way to use it (if it has value) or plan to forego it in S/4. Don’t pay to carry forward idle licenses “just in case.”
• Model On-Prem vs RISE Costs: Develop a cost model for at least two scenarios: staying on-prem (with license conversion or even staying on ECC with extended support) and moving to RISE or S/4 cloud. Include all relevant costs: license fees, maintenance, hardware or cloud infrastructure, and internal support. This will highlight the long-term cost implications and help identify which option is financially more viable for your company’s situation.
• Negotiate Credits and Protections: Go into negotiations with a clear ask on credits for existing licenses and specific contract protections. Be ready to walk SAP through your inventory and justify why you expect X credit. Also, have your list of non-negotiable terms (dual-use period, price increase caps, etc.). Essentially, treat this like a major procurement negotiation – because it is one. Get all agreements in writing before signing.

By completing this checklist, you’ll be well-prepared to engage with SAP on your S/4HANA migration and ensure you’re not leaving any money or value on the table.

FAQ

Q: Can I run ECC and S/4HANA in parallel during the migration?
A: Yes, most organizations do run both systems in parallel for some time. However, you need to have the right to do so. If you’re doing a product conversion (remaining on the same contract), SAP generally allows dual use of ECC and S/4HANA with the same licenses during the transition. If you’re doing a contract conversion (new contract), you must negotiate dual-use rights explicitly. In practice, SAP often grants a 6 to 12-month overlap where you can operate ECC and S/4 concurrently without extra license fees – but only if it’s agreed to in the contract. Always confirm this arrangement to avoid compliance issues or double costs.

Q: Do unused ECC licenses count toward conversion credits?
A: Not in a meaningful way. SAP will assess the value of your existing licenses but will heavily discount or ignore those that are obviously unused. In other words, shelfware licenses provide little or no credit because SAP knows you won’t need them in S/4. In fact, if you have a lot of shelfware, you might choose to terminate those licenses (stop paying maintenance) before conversion. That way, you stop the ongoing cost, even though you won’t get credit for them. Focus your negotiation on the licenses that you actively use or plan to use, to maximize credit on those. Don’t expect SAP to give you full value for 100 Professional User licenses if only 50 were ever actually named – they will right-size your entitlements in the new contract. The best approach is to be transparent about what you need moving forward and push for credit on that subset.

Q: Is contract conversion mandatory for RISE with SAP?
A: Yes. If you decide to move to RISE with SAP, you are opting into a subscription model, which by nature is a new contract. You cannot simply port your old ECC licenses into RISE without conversion. RISE is essentially an SAP S/4HANA Cloud subscription bundle, so it requires signing a cloud subscription agreement. Your old ECC contract (perpetual licenses and maintenance) would be terminated as part of that deal (often with a contract conversion credit applied toward the RISE subscription fees). There is no “product conversion” path to RISE – it’s a contract conversion by definition. Keep in mind, moving to RISE also means you are subject to cloud terms, and you relinquish the ability to self-host the core S/4 system (SAP or their cloud partners host it for you). So, yes, contract conversion is the route to RISE.

Q: What if I don’t convert my ECC licenses – can I just keep running ECC?
A: In the short term, you can choose to do nothing. Your ECC licenses are perpetual, so you have the right to run ECC indefinitely on the versions you have. The catch is support and future relevance. After 2027, standard support ends, and you’d either run without support or pay for extended support (which is costly and only available for a limited time). You also won’t get new features or legal updates. If you never convert and never migrate, you can keep ECC as is – but you’ll be essentially frozen on an aging system. Importantly, ECC licenses cannot be used for S/4HANA. So if your company later decides to implement S/4, you will still have to address licensing at that point (very likely via a contract conversion anyway, perhaps with even less favorable terms). Additionally, any money you spent on ECC licenses remains sunk cost; you could keep paying maintenance on ECC and not leverage an S/4 conversion credit at all. In summary, you can avoid converting if you plan to stick with ECC, but that strategy has diminishing returns given the end of support. Most organizations will eventually need to migrate, and planning a conversion proactively (when you have negotiation leverage) is better than waiting until you’re forced and SAP holds all the cards.

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