Negotiating SAP Support & Maintenance Fees
SAP support & maintenance fees are a significant recurring cost for on-premise SAP ECC and Business Suite customers – typically around 20–22% of the software’s license value per year. These costs can quickly add up, often exceeding the original license spend after just a few years.
This guide explains how to approach SAP support & maintenance fee negotiation to control these expenses.
We cover strategies to cap annual support uplifts, negotiate favorable terms (such as rate caps and early termination rights), and consider alternatives, including third-party support providers.
Real-world examples and actionable insights are included to help IT and finance leaders reduce SAP maintenance costs without compromising service quality.
SAP Maintenance Fees – A Major Cost Center
For many enterprises, SAP support and maintenance fees account for a significant portion of the IT budget.
SAP Enterprise Support is typically ~22% of your net license costs per year (SAP’s Standard Support tier, if available, is slightly lower at ~19%).
This means that if you purchased $10 million in SAP licenses, you might pay approximately $2.2 million annually for ongoing support.
Over five years, that’s $11 million – more than the original license investment. These fees grant you access to SAP’s help desk, software updates, patches, and legal/regulatory fixes.
However, the high cost and automatic renewals often feel like a “maintenance tax” on your SAP estate. Ensuring you’re getting value for money is critical.
Many SAP customers on ECC 6.0 (SAP Business Suite) are maintaining their legacy systems through 2027 (SAP’s support deadline), and they face mounting maintenance bills each year.
In this context, negotiating more favorable support terms or exploring alternative options can yield significant savings.
The Challenge of Rising Support Uplifts
Beyond the hefty base cost, SAP support fees tend to increase annually. SAP has historically applied yearly uplifts of approximately 3% to account for inflation and other factors.
Recently, these increases have grown: for example, SAP imposed a 3.3% support fee hike in 2023 (its first increase in nearly a decade) and in 2024 allowed increases up to 5%, tied to local inflation rates. Without a negotiated cap, these compounding uplifts can strain budgets.
A large enterprise paying $5 million in support one year could see that grow to over $6 million per year after just a few years of uncapped 5% annual increases – a substantial unplanned cost.
Negotiating a cap clause in your contract is therefore essential. A cap limits the annual maintenance fee increase (for instance, to no more than 2–3% per year, or even a fee freeze for a certain period).
This protects you against steep inflationary jumps and makes support costs predictable. The table below illustrates a scenario over five years, comparing an uncapped 5% annual increase vs. a capped 3% increase on a $5.00 M annual maintenance base:
| Year | Uncapped (5%/yr) | Capped (3%/yr) |
|---|---|---|
| Year 1 | $5.00 M | $5.00 M |
| Year 2 | $5.25 M | $5.15 M |
| Year 3 | $5.51 M | $5.30 M |
| Year 4 | $5.79 M | $5.46 M |
| Year 5 | $6.08 M | $5.62 M |
Table: Example of maintenance cost growth with and without a 3% cap on annual increases (baseline $5.0M in Year 1).
As shown above, negotiating a cap on support uplifts can save millions over a few years. Be sure to include any caps or limits in the contract (e.g., “maintenance fees shall not increase by more than 3% annually”).
If SAP refuses a strict freeze, aim for a reasonable cap tied to inflation (for instance, “CPI or 3%, whichever is lower”). The predictability gained will greatly aid IT financial planning.
Strategies for SAP Support & Maintenance Fee Negotiation
Even though SAP’s maintenance rate (22% for Enterprise Support) is a standard policy, savvy customers can still negotiate better terms and reduce the effective cost.
Here are key strategies for negotiating SAP support and maintenance fees:
- Identify and Eliminate Shelfware: Start by analyzing your SAP license usage. If you have unused licenses or modules (“shelfware”), you are paying 22% annually for nothing. Work with SAP (or your SAP account rep) to retire or terminate support on those unused licenses at renewal. For example, if you have 100 professional user licenses but only 80 active users, consider dropping 20 licenses. Removing $1 million worth of unused licenses would immediately save approximately $220,000 per year in maintenance fees. Ensure any license removal is done by contract terms (SAP may require notice or not allow mid-term reductions, so plan this for your renewal cycle). Every dollar of shelfware you eliminate is direct savings on support costs.
- Negotiate Maintenance Caps: As discussed, push for a cap on annual maintenance fee increases. This clause is one of the most effective tools for containing long-term costs. Many enterprises have successfully negotiated caps of 0%–3% instead of accepting open-ended uplifts. Even a cap equal to general inflation (say 2%) is better than SAP’s default approach, which could be higher. If your SAP contract renewal is approaching, consider making a maintenance increase a must-have term. This will shield you from sudden budget spikes, especially in years with high inflation.
- Bundle New Deals for Leverage: Align your support negotiations with other businesses you might give to SAP. Vendors are more flexible on maintenance terms if they see additional revenue. For instance, if you’re planning to purchase new SAP cloud subscriptions or additional modules, bundle the negotiations together. You could request a discount or waiver on one year of maintenance for your existing SAP products in exchange for a new purchase. Similarly, some customers negotiate a reduced maintenance rate (or a temporary maintenance holiday) as part of a larger license deal or S/4HANA migration agreement. Use the promise of new business to get concessions on your recurring fees.
- Secure Early-Termination and Flexibility Clauses: Pay attention to contract terms that restrict your ability to exit. Standard SAP on-premise support contracts are renewed annually, and you can terminate support for a product by giving notice (typically 3 months before renewal). Make sure this right is documented – you want the freedom to leave or reduce support on each renewal cycle if needed. If you’re signing a multi-year or enterprise agreement, negotiate an early termination option or opt-out triggers (for example, the right to exit a support agreement without penalty if your company is acquired or if you migrate to a different platform). At a minimum, ensure you can adjust the support scope yearly – meaning that if you stop using a component, you can remove it from maintenance at the next renewal. Having these escape hatches puts pressure on SAP to continue earning your business and prevents paying for services you no longer need.
- Time Your Negotiations: Effective timing can significantly improve your negotiating position. SAP’s sales teams face quarterly and yearly targets, so engage at fiscal year-end (Q4) or before your contract renewal deadline. If SAP’s fiscal year ends in December, starting maintenance fee discussions in Q3 and pushing to close by Q4 can make SAP more willing to deal. Additionally, leverage any upcoming SAP milestones, such as an ECC to S/4HANA transition. For example, ask SAP to freeze maintenance fees during your upgrade project (since you’ll be investing heavily in the new system). SAP may agree to hold off on increases or extend support at current rates if they know you’re moving on to their next product. Use those roadmap commitments as bargaining chips.
- Leverage Third-Party Quotes (Carefully): Even if you intend to stay with SAP support, it helps to know your alternatives. Obtain a quote from a third-party support provider (discussed in the next section) for your SAP environment. Showing SAP that you have a cheaper support option can sometimes prompt them to offer a discount or special pricing to retain your maintenance business. Be tactful: if you overtly threaten to leave, SAP might respond defensively (in some cases, vendors have been known to initiate software license audits when a customer signals intent to drop support). Instead, use subtle signals – for example, mention budget pressures and that you’re “exploring all options”. The mere possibility of losing your support revenue can make SAP more flexible. One enterprise negotiated a one-year fee freeze by informing SAP that a third-party support proposal on the table would cut costs by half. SAP, unwilling to lose the customer, offered to hold maintenance flat for 12 months while the customer evaluated its plans.
Throughout all these negotiations, maintain a professional but firm stance.
Document every concession in writing – handshake promises or emails are not enough. Ensure any agreed cap, discount, or special term is included in the SAP order form or contract amendment.
By combining these tactics, you can meaningfully reduce your SAP maintenance spend or at least curb the rate of increase.
Third-Party Support: A Viable Alternative
When direct negotiation isn’t yielding the savings you need, consider the alternative route: third-party support.
Independent providers, such as Rimini Street, Spinnaker Support, and Support Revolution, offer support services for SAP products beyond those provided by SAP itself.
In a third-party support model, you stop paying SAP’s maintenance fee and instead pay the third-party provider, usually at 50% of SAP’s cost (or even less).
For example, if you currently pay $2 million per Year to SAP, a third-party deal might cost around $1 million per Year – immediately saving you 50%.
What’s included?
Third-party support vendors typically provide break-fix support, tax and regulatory updates, and even support for customizations on your existing SAP software.
A major advantage is that they will support your current SAP version indefinitely – there’s no pressure to upgrade to S/4HANA or any new release.
This is appealing to customers intending to stay on ECC 6.0 well past SAP’s 2027 end-of-mainstream-support date.
Rimini Street recently announced it will support ECC 6.0 and S/4HANA clients through at least 2030 and beyond.
For companies not yet ready to migrate from their stable SAP ERP, third-party support can extend the life of their system while significantly reducing costs.
Trade-offs and risks:
Going with independent support does mean losing certain benefits:
- You will no longer receive new SAP patches, versions, or enhancements from SAP. Your system will be essentially “frozen” at its current software version. The third-party will provide fixes and updates for regulatory compliance, but you will not receive new features or official SAP improvements.
- If you plan to eventually migrate to a new SAP product (such as S/4HANA), you may need to relicense or pay maintenance fees to SAP to bring your system up to date again. (SAP typically does not allow a seamless re-entry to support without costs; you might incur a penalty or have to purchase new licenses for the latest version.)
- You need to ensure the third-party provider is reliable and capable. They should have expertise in your SAP modules and local regulations. Due diligence is important – check references and service level agreements (SLAs) for response times, etc., just as you would when vetting any critical vendor.
Despite these considerations, many organizations have found third-party support to be a compelling option.
Real-world examples:
A large retail company that was spending heavily on SAP maintenance switched to a third-party provider and immediately cut its annual support costs by ~50%, saving millions of dollars over several years.
Another company, a global manufacturer, used third-party support for its legacy SAP ECC system from 2018 onwards – this saved money that was reallocated to innovation projects, even as the company delayed an expensive S/4HANA migration.
Third-party support is also legally permissible (court cases in the Oracle vs. Rimini Street saga have affirmed that customers have the right to seek independent support, as long as intellectual property rules are respected).
The strategy is now mainstream enough that SAP itself is aware that many customers consider it as leverage.
In summary, third-party support can be a smart choice if your SAP environment is stable, you don’t need immediate upgrades, and cost reduction is a top priority.
It’s not an all-or-nothing decision either – some enterprises keep critical systems on SAP support and move less critical or older systems to a third-party to save money.
The key is to weigh the savings against the loss of direct SAP updates and plan accordingly. And even if you don’t ultimately switch, having the option gives you bargaining power in negotiations with SAP.
Recommendations
1. Do Your Homework on Usage: Before any negotiation, audit your SAP licenses and usage. Know exactly what you’re paying for and what is utilized. This data will help identify easy wins (like cutting unused licenses) and support your case to SAP for a fee reduction or rightsizing. Involve your IT asset management and SAP basis teams to get accurate metrics on active users and modules.
2. Engage SAP Proactively (and Early): Don’t wait for the renewal notice to start discussions. Open a dialogue with SAP well in advance about your support costs and concerns. Vendors often have retention programs – if you communicate that maintenance fees are a problem, SAP might offer options (e.g., a temporary discount, a different support tier, or credits toward a future project). The key is to ask; loyal customers who speak up can receive concessions, but those who remain silent will simply pay the standard increases.
3. Negotiate Contract Clauses in Detail: Treat your support agreement like any large contract negotiation. Insist on protective clauses: an annual increase cap, clearly defined renewal terms, and the flexibility to terminate or reduce scope. Ensure that any special terms are documented in writing (e.g., contract or addendum). Verbal assurances that “we typically only raise by 3%” or “you can drop licenses later” are not enforceable – get it documented.
4. Align with Corporate Strategy: Tie your maintenance negotiations to your broader IT strategy. If your company plans to eventually move to the cloud or S/4HANA, use that as an opportunity to your advantage. SAP is keen to keep you as a long-term customer, so they may be willing to compromise on maintenance fees if they believe it will lead to a larger future deal. Conversely, if your strategy is to stay on ECC for several years, make that clear and push for a long-term support agreement (such as a locked rate or fixed-price multi-year maintenance). Clarity about your roadmap can help you establish a support arrangement that aligns with your plans.
5. Consider Third-Party Support – But Prepare: If you are seriously considering third-party support, do your due diligence. Evaluate at least two providers and verify they can meet your needs (technical expertise, regulatory updates, SLA). At the same time, prepare internally: ensure you download needed SAP notes and documentation before leaving SAP support, and that your legal team is comfortable with the third-party contract. Having this option ready gives you credible leverage. Some customers even find that simply preparing to switch (and notifying SAP in final negotiations) yields a better last-minute offer from SAP.
6. Use Peer and Advisor Insights: There is strength in numbers. Join SAP user groups or networks of other SAP clients to share experiences on maintenance negotiations. Often, user groups (ASUG, DSAG, etc.) collectively lobby SAP for policy changes (for example, past user group pressure influenced SAP to extend support deadlines and moderate fee hikes). Additionally, consider engaging a software licensing advisor or consulting firm if you lack internal resources – experts who specialize in SAP negotiations can bring benchmarks and tactics that result in better outcomes.
7. Maintain Leverage Post-Deal: Once you’ve negotiated a favorable maintenance deal, don’t become complacent. Continuously monitor your SAP usage and value from support. If your situation changes (e.g., mergers, downsizing, new systems), be prepared to reopen discussions. Also, keep an eye on SAP’s strategy – if they announce new offerings or incentives, there may be fresh opportunities to optimize your support contract. By staying vigilant, you ensure your organization never overpays for SAP maintenance relative to the value received.
Checklist: 5 Actions to Take
1. Inventory Your SAP Environment: Document all your SAP products, modules, and user licenses, and how much you’re paying in maintenance for each. Identify any components not actively used. This creates a clear picture of what you have and what costs can potentially be trimmed.
2. Analyze Current Costs and Future Increases: Work with Finance to project your SAP support costs over the next 3–5 years (using current contract terms). Quantify the impact of expected increases. Having hard numbers (e.g. “cost will rise from $2 M to $2.3 M next year”) builds urgency and a business case for negotiation.
3. Engage Stakeholders and Set Targets: Bring together IT, procurement, and finance leaders to define your negotiation goals. Decide on key asks such as “cap maintenance increases at 3%” or “remove X unused licenses from support.” Also, determine your walk-away options (e.g., consider third-party support or internal self-support for certain systems if SAP refuses to agree to the terms). A unified team with clear objectives is crucial before approaching SAP.
4. Initiate Negotiations with SAP: Open discussions with your SAP account manager or SAP contract team. Present your requests (backed by data from steps 1–3). Be prepared to justify why you need concessions – for example, cite budget limitations, ROI concerns, or alternative options you’re exploring. Remember to negotiate contract language for any agreed changes (caps, flexibility, etc.). Keep the dialogue professional and make it clear that you value SAP’s support, but you need it at a sustainable price.
5. Evaluate and Execute the Plan: If SAP provides a satisfactory proposal (e.g., a capped increase or discount), review the contract amendments carefully, then sign and ensure the new terms are implemented on your account. If SAP’s offer isn’t enough, be ready to execute your Plan B – this could mean issuing a notice to terminate SAP support (by the required deadline) and transitioning to a third-party provider. Coordinate internally for any transition (testing the new support, informing users of new support contacts, etc.). Whichever route you take, communicate the changes to all relevant stakeholders and continuously monitor the results (savings achieved, support quality, etc.).
FAQ
Q1: Our SAP maintenance is 22% of the license cost – can we negotiate a reduction?
A: The standard SAP Enterprise Support rate is fixed (around 22%), and SAP doesn’t usually lower that percentage for individual customers. However, you can lower the effective cost by negotiating in other ways: for example, by getting a bigger upfront license discount (which reduces the base that 22% is calculated on), or by removing unused licenses from your contract (so you’re not paying support on shelfware). Also, consider switching to SAP’s Standard Support if available, which has a slightly lower rate (~19%) but with reduced features. In general, focus on negotiating caps and discounts around the edges – the base rate itself is hard to change.
Q2: Can we discontinue paying SAP maintenance for certain products we no longer use?
A: Yes, if you have SAP software that you’re no longer using, you can choose not to renew its maintenance. Typically, you’d inform SAP (with required notice) that you are terminating support for those specific licenses at the end of the current term. This removes the annual fee for those items. Keep in mind that if you drop maintenance on a product, you will lose support and upgrade rights for it; however, you can still legally use the software (perpetual license). It’s wise to eliminate or replace truly unused software to avoid wasting maintenance dollars. Just be sure to follow the contract procedures and timings when doing so, and understand that re-adding support (if needed) later could incur back-charges.
Q3: How can we limit the year-over-year increases in SAP support fees?
A: The best way is to negotiate a maintenance cap clause in your SAP agreement. This clause sets a maximum percentage (or a fixed fee) that your support costs can increase annually. For example, you might negotiate “support fees will not increase more than 2% per year for the next 3 years.” Include this in the contract at renewal or when signing any new deal. Another tactic is negotiating a multi-year fixed price for support (e.g., “no increase for two years”). Without a cap, SAP generally applies its standard increase (which could be 3–5% per year). So explicitly adding a cap or freeze is crucial for predictability. Ensure that it is in writing; otherwise, any verbal assurance regarding “minimal increases” won’t be enforceable.
Q4: Is switching to a third-party support provider (like Rimini Street) safe and legal?
A: Yes, third-party support for SAP is legal and has been adopted by many enterprises. Providers like Rimini Street, Spinnaker, and others operate legitimately – as confirmed by court rulings – as long as they don’t infringe on SAP’s intellectual property. “Safe” in terms of service quality depends on the provider: you should vet their capabilities and track record. The primary risk is not legal but strategic: if you leave SAP support, you will not receive official SAP updates or direct assistance from SAP. You need to rely on a third party for all fixes and support. Additionally, if you later choose to return to SAP’s fold (for example, to upgrade to S/4HANA), there may be costs associated with reinstating support or purchasing new licenses. So, it’s important to have a long-term plan when switching. Many companies have successfully implemented this approach, saving 50% or more on fees. However, it is essential to ensure that your organization is fully aware of the trade-offs and commits to making the third-party relationship work.
Q5: What happens if we just stop paying SAP maintenance altogether?
A: If you simply don’t renew SAP maintenance, you retain the right to use your existing software licenses (perpetual rights), but you lose access to all support services from SAP. This means no help desk, no patches, no legal updates, and no new versions or upgrades. Your software will continue running in its current state. However, running SAP without support can be risky – you won’t receive security fixes or regulatory changes, and if something breaks, you’re on your own (or must hire external experts). Additionally, if you later decide you need support again, SAP may charge a penalty or require you to pay for the “missed” years of maintenance to reinstate it. In practice, if you want to drop SAP support, it’s better to have a plan – either moving to a third-party support provider who can take over, or having strong internal capabilities to maintain the system. Simply going without any support is not recommended for mission-critical environments due to the risks involved.
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