Hybrid SAP Licensing Guide for Two-Tier Environments
Many global enterprises today employ hybrid & two-tier licensing strategies for SAP, running a mix of SAP ECC on-premises and newer SAP S/4HANA cloud solutions (via RISE or GROW).
This blended approach can deliver flexibility and agility. Still, it also introduces complex licensing questions regarding rights, conversion credits for migrating to S/4HANA, and how to negotiate license portability between on-premises and cloud environments.
This guide breaks down two-tier SAP scenarios, explains how to leverage license conversion credits when transitioning from ECC to S/4HANA, and offers advice on negotiating flexible terms to make your SAP licenses work across hybrid landscapes.
Understanding Hybrid & Two-Tier SAP Licensing Strategies
Hybrid SAP licensing refers to operating both traditional on-premise SAP systems (such as ECC or Business Suite) and cloud-based SAP services (such as S/4HANA Cloud via RISE or the GROW program) within a single organization.
A two-tier SAP environment is a common hybrid model where a company runs a Tier-1 ERP at its headquarters (often ECC or S/4HANA in a private cloud) and a Tier-2 ERP at subsidiaries or new business units (for example, S/4HANA Cloud public edition).
Organizations pursue these strategies for several reasons:
- Phased Transformation: Migrating in stages to S/4HANA – keeping core operations on ECC while rolling out S/4HANA Cloud in certain areas – reduces risk and disruption.
- Acquisitions or Divestitures: Newly acquired smaller companies may be transitioned to a cloud ERP quickly (Tier-2) while the parent continues to use the legacy system. A two-tier approach helps integrate them without a full ECC rollout.
- Regional or Functional Needs: Some regions or divisions may benefit from a lighter, standardized cloud ERP for agility and lower total cost of ownership (TCO). At the same time, corporate headquarters retains a heavily customized on-premises system for complex processes.
Running a hybrid SAP landscape involves managing two distinct licensing models simultaneously.
The on-premises side utilizes perpetual licenses, along with annual support (CapEx upfront, OpEx for support). In contrast, the cloud side employs subscription licenses (OpEx, typically an annual fee per user or usage metric).
This dual model can create confusion in compliance management and budgeting. Global IT and finance teams must carefully map out how users and functionality are distributed across systems to ensure they have the right licenses in the right places.
It also requires understanding SAP’s rules for bridging the two environments, which is where dual-use rights and license portability come into play.
In short, a hybrid & two-tier licensing strategy can offer the best of both worlds, but it demands proactive planning and savvy negotiation with SAP to navigate the complexity.
Two-Tier Scenarios: Managing ECC On-Prem + S/4HANA Cloud
In a two-tier SAP scenario, an enterprise may run SAP ECC on-premises at its headquarters and deploy S/4HANA Cloud (via RISE with SAP or GROW with SAP) for specific units or regions.
From a licensing perspective, this means separate contracts and entitlements govern each environment.
Key considerations in such a mixed setup include:
- Distinct License Agreements: Your ECC system is covered under a traditional license agreement (own-and-maintain model), while S/4HANA Cloud operates under a subscription contract. There is no single “hybrid license” that covers both; you will maintain at least two sets of SAP agreements (and likely two sets of metrics to track).
- Duplicate User Licensing: If some employees require access to both systems, they typically need to be licensed for both. For example, a finance user at HQ using ECC will have a named user license for ECC. If that same person also logs into the S/4HANA Cloud subsidiary system, they are counted toward the S/4HANA Cloud user subscription, which is often measured in Full User Equivalents (FUEs). There’s no automatic carry-over of a user license from on-prem to cloud. Enterprises should identify overlapping users and decide where each needs access. In some cases, you might minimize overlap (e.g., let subsidiaries handle local work in S/4 Cloud and have HQ users only consume consolidated data) to avoid paying twice for the same person.
- Integration and Indirect Use: Two-tier landscapes require data to flow between ECC and S/4HANA Cloud (for consolidation, supply chain, master data sync, etc.). The good news is that SAP generally doesn’t double-charge if both systems are properly licensed – data exchange between two SAP systems is allowed. However, be aware of indirect access rules on the on-premises side. For instance, if the cloud system is pushing orders into ECC, from ECC’s perspective, those entries may appear as external input. SAP’s newer Digital Access licensing (document-based) can cover these scenarios. It’s wise to clarify in your contracts that integrations between your SAP cloud and on-prem systems are permitted without extra license fees. This avoids any later audit claims of unlicensed indirect use.
- Multiple Metrics and Management: ECC might count licenses by named users and engines, while S/4 Cloud uses subscriptions (often tied to FUE counts or resource metrics). Each contract will have its usage definitions and renewal cycles. It’s vital to manage them in parallel – track user counts on the cloud (so you don’t exceed subscriptions) and keep an eye on named user assignments in ECC (to ensure you can retire some as people move to the cloud system). Co-terming renewals or at least coordinating them can give you more negotiating leverage (for example, aligning an S/4HANA Cloud renewal with an ECC support renewal provides an opportunity to renegotiate comprehensively).
In practice, many enterprises find that a two-tier approach yields agility at the edges (subsidiaries get a modern, nimble system via S/4HANA Cloud) while maximizing existing investments at the core (squeezing the most value from ECC until a full move is justified). But to make this cost-effective, you must actively govern licensing in both tiers.
That could mean reducing ECC license counts as you decommission functionality in favor of the cloud, or negotiating bundled pricing if SAP knows you’re adding S/4HANA Cloud users on top of an ECC install base.
The key is to avoid paying “double” for the same capacity – use the two-tier model to your advantage by shifting workloads to where they’re most efficient, and ensure your contracts recognize that distribution.
ECC to S/4HANA Migration: License Conversion Credits
A major aspect of any hybrid SAP strategy is the eventual migration from ECC to S/4HANA. SAP offers license conversion programs to assist customers in transitioning their investments.
In essence, you can “trade in” your existing ECC licenses for credit toward S/4HANA licenses – but the details and value of these credits depend on timing and negotiation.
Under SAP’s standard conversion policy, an ECC customer moving to S/4HANA on-premise (or to S/4HANA Private Cloud under RISE) would typically sign a contract conversion: you terminate or modify your old ECC license agreement and start a new S/4HANA agreement, with SAP applying a credit for the Net License Value you’ve already paid.
For example, if you originally bought $10M worth of ECC licenses, SAP might allow a certain percentage of that value to offset the cost of the new S/4HANA licenses.
In the early days of S/4HANA adoption, these credits were very generous (often 80–90% of the original value could be carried over).
Over time, SAP has been reducing the conversion credit percentage to encourage customers not to wait too long.
As of mid-decade, many enterprises see credits in the range of ~70% of their legacy license value. By the final years of ECC support (2026–2027), the credit might drop toward 50-60%.
In short, the sooner you migrate, the more credit you get for your ECC investment. Waiting until the last minute could mean leaving a lot of money on the table.
If you are moving to RISE with SAP (subscription model) rather than purchasing S/4HANA licenses outright, the dynamic is slightly different.
There isn’t a literal license-for-license swap. Instead, SAP will factor your existing maintenance payments and license ownership into the RISE subscription pricing.
In practice, SAP might offer significant first-year discounts or migration incentives on the RISE subscription fee to account for the fact that you already poured money into ECC licenses.
For instance, they may waive a portion of the subscription cost for the initial term or provide service credits.
It’s effectively another form of “conversion credit,” just structured as a discount over time rather than a one-time trade-in.
Always ask SAP to explicitly show how your past investments are being acknowledged in any RISE proposal – it should not look like you’re paying full list price from scratch if you’ve been a long-time ECC customer.
When planning an ECC to S/4HANA license conversion, keep these tips in mind:
- Audit and Right-Size Before Converting: Don’t automatically convert everything you have. Use this opportunity to eliminate shelfware – any users or modules in ECC that you’re not actively using. Every license you carry over will incur cost (either as subscription or maintenance on the new contract). For example, if you have 200 Professional users on paper but only 120 active users, you might drop 80 licenses in the conversion. This avoids paying for unneeded capacity in S/4HANA and maximizes the efficiency of your credits.
- Map Old Licenses to New: S/4HANA’s product structure differs from ECC’s. Some legacy modules are replaced by new ones or embedded in the core. Work closely with SAP or a licensing expert to map each ECC component to its S/4HANA equivalent (or determine if it’s now standard). Ensure that nothing critical is lost in translation. If a certain functionality isn’t included in the target S/4 package, you may need to negotiate its inclusion or be prepared to license it separately.
- Negotiate the Credit Percentage and Terms: While SAP has general policies, there is often room to negotiate the effective credit percentage. If SAP’s policy states “up to 70%” for a conversion this year, you should strive to achieve the full 70%. Each additional point of credit can save significant dollars. Also, clarify how maintenance fees are transferred. Typically, once you convert, your old ECC maintenance stops and you start paying support on the new S/4 licenses (usually at 22% of net license price annually). Ensure that support is calculated based on the net (discounted) license price of S/4HANA after deducting your credits, not the list price – otherwise, you may end up paying an inflated support fee. Lastly, if you are not converting everything in one go, ask SAP what will happen to any licenses left behind (can you get a second chance later, and at what credit?).
By planning your license conversion strategically, you can substantially reduce the cost of moving to S/4HANA. Enterprises that moved early have saved millions by carrying over prior investments.
Those who delay too long not only face lower credits but also risk a rushed migration under less favorable terms.
The bottom line: treat license migration as seriously as technical migration – analyze, negotiate, and make informed trade-offs to protect the value of what you’ve already paid to SAP.
Dual-Use Rights: Running ECC and S/4HANA in Parallel
One of the trickiest licensing challenges in a hybrid migration is the transition period. During an S/4HANA project, there will likely be months (or even years) when both your old ECC system and the new S/4HANA system are running concurrently.
You may be testing and training in S/4 while ECC is still the production system, or perhaps a phased go-live means that some regions are on S/4, while others remain on ECC.
Naturally, you don’t want to pay SAP twice for this overlap. This is where dual-use rights come into play.
SAP’s standard practice is to grant customers a temporary dual-use license allowance when they sign an S/4HANA conversion deal.
In plain terms, SAP permits you to continue using your legacy SAP Business Suite (ECC) for a defined period concurrently with your new S/4HANA system, without requiring additional licenses.
However, these rights are not automatic – they must be documented in your conversion agreement or an accompanying letter from SAP.
Key points to address regarding dual-use include:
- Time Limit and Scope: Ensure the contract clearly states the duration for which you can run the systems in parallel. For example, “Customer may use SAP ECC production and SAP S/4HANA production simultaneously until December 31, 2026” (or until project completion). RISE with SAP contracts often specify a window (e.g. 6 or 12 months of overlap) by default. If your project is large, negotiate for ample time. It’s better to have a cushion in case of delays than to be forced to seek an extension later under duress.
- Permitted Usage of the Old System: Dual-use clauses often assume that once S/4HANA goes live, the ECC system will be used in a limited manner (read-only for historical data or with minimal transactional use). Clarify what is allowed. Can end-users continue to transact in ECC during a phased rollout? Or should ECC become read-only after a certain point? Agree on this with SAP to avoid compliance issues. Many companies negotiate a read-only period after cutover, meaning they can still access ECC for reporting or audit purposes for a specified number of years, but not run new transactions.
- Avoiding Double Maintenance: In an ideal scenario, the moment you start paying for S/4HANA support or subscription, you should no longer pay maintenance on the retired ECC licenses. Work with SAP to ensure maintenance fees aren’t charged in duplicate. Sometimes SAP will “park” your old licenses – essentially suspending their maintenance charges – during the transition. For instance, if you convert in July, you might only pay a prorated maintenance on ECC up to that date and then switch to S/4 support payments. It’s essential to obtain clarity on billing to prevent overlapping expenses.
- Extension Provisions: Projects can slip. If your dual-use period is coming to an end and you’re not fully cut over, you need a plan. It’s wise to build in an option to extend the dual-use window (even if it requires approval or an extra fee, knowing the terms upfront is better than scrambling later). This could be as simple as “SAP may allow up to 6 months extension of dual-use upon mutual agreement” in the contract. That way, you have a safety valve if needed.
- Decommission and Afterlife: Define what happens after a dual-use system is decommissioned. Usually, you’ll decommission ECC once S/4 is stable. However, many companies keep an ECC instance for historical records. Negotiate a clause that allows you to retain an archived copy of ECC data for future access. Often, SAP will allow a non-production license for the old system if it’s just for auditing or reference. This should be zero-cost (since you’re not actively using it for operations, just data lookup). It’s a detail often overlooked until an audit years later asks why an old system is still running – it’s better to have it pre-agreed that it’s allowed to run in read-only mode.
Dual-use rights provide you with the flexibility to execute a successful migration.
They exemplify why everything should be documented with SAP. Never assume that just because you’re migrating, you can automatically use both systems freely – always get the terms in your agreement.
With a well-crafted dual-use clause, you can focus on the technical cutover without the fear of licensing landmines mid-project.
Negotiating License Portability and Hybrid Flexibility
Perhaps the greatest value of a hybrid SAP licensing strategy is flexibility – the ability to run workloads where they make sense (on-prem or cloud) and adjust as your business evolves.
To achieve this, you’ll want to negotiate as much license portability and contractual flexibility as SAP is willing to provide.
Here are some negotiation strategies for a hybrid and two-tier SAP landscape:
- Partial Conversions (“Carve-Outs”): SAP’s sales approach might be to push a full conversion to S/4HANA or RISE for the entire enterprise. But you can negotiate to convert only part of your environment. For example, you might move your CRM and analytics users to S/4HANA Cloud now, but retain your ECC licenses for manufacturing modules that are not yet ready to migrate. SAP has allowed carve-out arrangements where a subset of licenses is converted to subscription while others remain under the old contract. The key is to clearly define which processes/users shift to the new model and which stay on ECC. This hybrid contract approach ensures you pay only for what you migrate, without forfeiting rights to components you still need on-prem.
- Maintenance Suspension and Termination Rights: When you migrate a portion of your users or functionality to the cloud, negotiate relief on maintenance fees for those retired components. In practice, if 500 of your 1,000 users move to S/4HANA Cloud, you might terminate the licenses (and associated maintenance) for those 500 ECC users. Alternatively, ask SAP to convert unused maintenance into cloud credits – some customers have arranged to apply the budget they would have spent on on-prem support toward the new subscription. The goal is to not be stuck paying support for licenses that you are no longer utilizing due to the move.
- Aligned Discounts Across Environments: If you’re a large customer with significant ECC and now significant cloud spend, leverage that in negotiation. Ensure that the discount you receive reflects the total business you’re providing to SAP. For example, if you historically had a 50% discount on ECC price lists and now you’re buying into RISE, ask for comparable discounts on the cloud side or an enterprise-wide agreement. SAP may be open to a global discount or at least preserving your previous discount level on new purchases, especially if you’re committing to a multi-year transformation.
- Future Growth and Portability Clauses: Incorporate future flexibility. One scenario is if you sign up for GROW with SAP (targeted at smaller scales) and later need to upscale to RISE or add more users than GROW’s capacity allows – negotiate upfront that you can transition to a larger offering without incurring punitive costs. Similarly, for RISE contracts, consider an option to bring additional systems into the fold at predefined pricing. If you keep some SAP modules on-premises (such as SAP BW or an industry solution) outside of RISE, include language stating that if you later decide to convert those, the conversion credit mechanism will still apply. Essentially, you want to future-proof your contract as much as possible: your SAP landscape might change, so the contract should allow adding, changing, or dropping components with minimal hassle.
- Protection in Case of Exit: No one adopts a cloud solution expecting to leave it, but savvy negotiators plan for all outcomes. While SAP might not offer a straightforward path back to on-prem, you can negotiate certain exit provisions. Focus on data ownership and assistance: ensure the contract stipulates that you can extract your data from the cloud in a usable format upon termination. You may also want to consider a clause that allows you to retain the right to activate equivalent on-premises S/4HANA licenses (perhaps by reactivating your old maintenance or through a conversion at that time) if you leave RISE. SAP may not grant a full conversion right in writing, but even a mention that they’ll “reasonably cooperate” if you choose to deploy on-prem in the future can give you some assurance. And as always, keep your old ECC license documentation even after conversion – if you had perpetual rights that you partially relinquished, you will know exactly what you still have in case you ever need a fallback for certain users or geographies.
Negotiating for a hybrid model involves balancing commitments: SAP will seek a certain level of spend and lock-in from you, and in return, you should seek flexibility and safeguards.
Be transparent with SAP about your planned two-tier usage – if they see a strategic story (e.g., “we’ll move these divisions to cloud now, and maybe more later”), they might be more amenable to flexible terms than if they fear you’ll never fully migrate.
Additionally, consider involving a third-party licensing expert or legal counsel; they’ve likely identified areas where contracts have loopholes or where customers have secured concessions in the past.
In sum, make your contracts as agile as your IT strategy – so that your licensing doesn’t become a roadblock to changing course when business needs change.
Recommendations (Hybrid Licensing Best Practices)
- Assess and Plan Early: Conduct a thorough audit of your SAP usage and licenses now to ensure optimal performance and compliance. Use that data to develop a roadmap for which systems will stay on ECC and which will move to S/4HANA (and when). Early planning ensures you maximize conversion credits and avoid last-minute, high-pressure deals.
- Engage SAP with a Strategy: Come to SAP with a clear hybrid vision (e.g., “HQ on ECC for two more years, subsidiaries on S/4 Cloud immediately”). When SAP sees you have a plan, you’re more likely to get a tailored offer. Leverage your SAP account reps for information, but also be prepared to push back on one-size-fits-all proposals.
- Negotiate Dual-Use in Writing: Always include explicit dual-use and transition clauses in your SAP agreements. Get written permission for any period you need to run systems in parallel or to keep an archived system. This avoids any compliance surprises and gives you a safety net for timing.
- Right-Size to Eliminate Waste: Before converting or adding any licenses, identify shelfware and eliminate it. Whether on-premises or in the cloud, unused licenses incur costs (either in maintenance or subscription fees). Regularly optimize user license assignments and deactivate or reassign what is no longer needed.
- Benchmark Total Costs: Compare the total cost of ownership across different scenarios – staying on ECC, moving to S/4 on-premises, or adopting RISE – over a multi-year period. Use these numbers in negotiations with SAP. For example, if RISE looks 20% more expensive over 5 years than on-prem, ask SAP to bridge that gap with discounts or additional value.
- Maintain Flexibility: Prefer contracts that allow adjustments. If possible, avoid clauses that lock you into fixed numbers of users for long periods without the ability to true-down. Negotiate caps on annual price increases for subscriptions and explore options to adjust user counts at renewal. In hybrid mode, needs will change – your contract should be adaptable to accommodate these changes.
- Monitor Hybrid Compliance: Once running a hybrid environment, actively monitor license compliance on both sides. Implement processes to manage user access centrally – for instance, when an employee leaves, ensure their access is removed from both ECC and S/4 Cloud so you’re not paying for a ghost user. Keep integration logs and make sure any third-party systems accessing SAP data are properly licensed (usually via SAP’s digital access documents or named users). Regular internal audits can catch issues before SAP’s auditors do.
- Leverage Expert Help: SAP licensing is notoriously complex. Don’t hesitate to bring in independent experts or use tools to analyze your license usage. They can often identify optimization opportunities or negotiation angles that save you far more than their fees. Especially during a big transition like ECC to S/4, an expert eye on the licensing contract can help secure important protections (like ensuring you’re getting the best conversion credit, or that no hidden cost was overlooked).
Checklist: 5 Actions to Take
- Inventory Your SAP Landscape: Document all SAP systems in use (ECC, S/4HANA variants, cloud products) and list out your current licenses, user counts, and annual costs. This baseline will highlight overlap and guide your two-tier strategy.
- Define Your Hybrid ERP Strategy: Determine which parts of the business will run on ECC versus S/4HANA (cloud or on-premises). For each segment, set a timeline – e.g., “Subsidiary X on S/4HANA Cloud by Q4, core finance stays on ECC until 2025.” Having a clear blueprint ensures internal alignment (IT and Finance on the same page) before you negotiate with SAP.
- Engage SAP Early for Conversion Options: Initiate conversations with SAP about conversion programs or RISE migration deals. Request a preliminary conversion quote or RISE proposal tailored to your plan. Importantly, request details on credit for existing licenses and any dual-use allowances. Starting this dialogue early gives you time to iterate and doesn’t put you against a deadline.
- Negotiate Contract Terms Line-by-Line: When reviewing SAP’s proposal, scrutinize every clause. Ensure the agreement includes: your negotiated conversion credit %, dual-use period, what happens to old licenses, how new subscription fees can (or cannot) increase, and any special terms you need (like flexibility to add more users or the ability to swap a cloud module if it doesn’t get used). Don’t accept vague assurances – get specifics in the contract or an addendum. It can be helpful to use a checklist (e.g., the points from this guide) during negotiations to track which items have been addressed.
- Implement and Monitor: After signing, execute your hybrid plan with diligent project management. Migrate in phases as planned, and closely monitor license usage. Establish a license management process that periodically reviews both on-premises and cloud usage. As you retire ECC components, confirm that SAP has adjusted your maintenance billing accordingly. As you add cloud users, ensure you stay within purchased subscriptions (or procure more in a controlled way). Essentially, treat license management as an ongoing responsibility – not a one-time task – especially in a dynamic hybrid environment.
FAQs
Q1: What is a “two-tier” SAP licensing strategy?
A: Two-tier SAP licensing is an approach where a company runs two integrated ERP systems to serve different needs – typically a primary system at headquarters (like SAP ECC or S/4HANA in a private cloud) and a secondary system for smaller units or regions (like S/4HANA Cloud public edition or even SAP Business ByDesign). Each “tier” has its licensing. This strategy enables enterprises to standardize on SAP while allowing for flexibility: the Tier-2 system can be lighter and more agile for quick deployments, without disrupting the core Tier-1 system. Licensing-wise, you’ll manage separate contracts for each tier and need to coordinate users and integration between them. It’s called two-tier because of the hierarchical deployment, but it’s fundamentally a form of hybrid SAP environment.
Q2: We have a big investment in SAP ECC – can those licenses be reused for S/4HANA?
A: You can’t directly “run S/4HANA with an ECC license” – S/4HANA is a different product with its licenses. However, SAP offers conversion credits and trade-in programs, so you don’t have to pay full price all over again. In an on-premises S/4HANA scenario, you would exchange your ECC licenses for S/4 licenses (getting a credit value for the ECC ones). If you’re transitioning to a cloud subscription (RISE or GROW), you won’t transfer licenses directly, but SAP will offer a discount on the subscription to recognize your past ECC investment. The key is to negotiate that credit. Essentially, your ECC licenses have residual value that can reduce the cost of S/4HANA – but you must execute a formal conversion or contract swap to realize that value. Make sure any agreement clearly states how your previous license investments are being compensated in the new deal.
Q3: How do license conversion credits work when moving to S/4HANA?
A: License conversion credits are like a trade-in value. SAP evaluates the licenses you already own and applies a certain percentage of their original value as a discount towards your new S/4HANA licenses or subscription. For example, if you bought $5 million of ECC licenses years ago, a 75% credit could mean $3.75 million worth of your new S/4HANA licenses are “paid” by turning in the old ones, and you only pay the remaining 25% as new spend (this is simplified, but that’s the idea). The exact credit percentage is determined by SAP policy and negotiation – it has been decreasing over time. Early movers got very high credits (nearly the full value), while late movers got less. The credit may also not be 1:1 for every product; some older licenses may map awkwardly to S/4 bundles. It’s essential to obtain a detailed conversion bill of materials from SAP, which shows how each ECC license is being credited or exchanged. And note: once converted, you typically terminate those old licenses (you can’t keep using them). So timing the conversion and scope is important – only convert when you’re ready to use the new S/4 licenses.
Q4: What are “dual-use rights” in SAP contracts, and why do we need them?
A: Dual-use rights refer to the contractual permission to use two systems (old and new) at the same time during a transition. You need them because, without explicit permission, running your ECC and S/4HANA production environments in parallel could technically be seen as unlicensed use (since normally your licenses can only be used for one production system at a time). Dual-use rights address this by granting an exception: for a defined period, you can operate both an ECC instance and an S/4HANA instance that cover the same business operations. Practically, this is critical for migrations – you don’t flip a switch overnight for a large enterprise. Dual-use enables data migration, testing, user training, and phased go-lives without requiring a big bang approach. Always ensure that your SAP conversion or RISE contract specifies the dual-use period (e.g., “12 months of parallel runtime”). And remember, it’s temporary – dual-use is not a permanent state, just a bridge to help you transition to the new platform safely.
Q5: How can we avoid paying double or overspending in a hybrid SAP environment?
A: Avoiding double costs in hybrid licensing comes down to careful license management and proactive negotiation. First, identify any users or parts of the business that might be counted twice. If an employee only needs the new system, let them use that and consider dropping their old system access (and license) if possible. If they truly need both, factor that into your license counts and budget – maybe reduce numbers elsewhere. Second, when you move functionality to the cloud, reduce your on-prem licenses accordingly. Don’t keep paying maintenance on a module you’ve replaced with a cloud product. Work with SAP to terminate or shelve those licenses so you’re not billed. Third, use contract terms to your advantage: negotiate things like the ability to adjust user numbers at renewal, and caps on price increases, so the cloud costs don’t creep up uncontrollably. Also, keep an eye on indirect usage – for example, if a third-party system connects to ECC as part of your hybrid integration, ensure you have a license for that (often via SAP’s digital access documents). In summary, you avoid overspending by not maintaining more licenses than you need at any given time and by continuously aligning your license counts with actual usage in each environment. Regular internal audits and good Software Asset Management practices are your friends here.
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