Reducing SAP Footprint for ECC: Unused Licenses and Legacy System Retirement
Many large enterprises are paying for more SAP software than they use.
By reducing the SAP footprint – identifying unused licenses (shelfware) and retiring legacy SAP systems – CIOs and CTOs can significantly cut costs and complexity.
This advisory provides strategies to eliminate waste (like idle user licenses and outdated SAP modules) and lower the ongoing support fee base, freeing up budget for innovation.
SAP Footprint and Its Cost
Cutting unnecessary SAP licenses and systems helps CIOs shrink annual support costs and simplify their IT landscape.
An organization’s SAP footprint includes all the SAP software licenses, users, and systems it deploys – and even those it owns but isn’t actively using.
This footprint directly drives cost: SAP’s standard support fees are typically 20–22% of the license purchase price, per year.
That means even dormant licenses and legacy systems rack up ongoing fees.
For example, if a company has $5 million in SAP licenses, it pays approximately $1.1 million annually in support. If 15% of those licenses sit unused, that’s roughly $165,000 wasted annually on maintenance for shelfware.
Beyond support fees, a sprawling SAP estate also incurs infrastructure and administrative costs (servers, storage, IT staff time).
In short, an oversized SAP footprint = oversized IT spend. CIOs should start by gaining visibility into what they have, what it’s costing, and what isn’t delivering value.
Read Switching to Third-Party Support for SAP.
Identifying Unused SAP Licenses (Shelfware)
Unused licenses – often referred to as SAP shelfware – are a hidden cost drain. Shelfware refers to any SAP user licenses or add-on products that your company has purchased but isn’t actively utilizing.
Common culprits include users who never log in, licenses allocated to former employees, or extra modules purchased “just in case.”
Start by running an SAP license audit (using SAP’s measurement tools or software asset management tools) to pinpoint these gaps.
It’s not unusual to find double-digit percentages of named users who haven’t logged in for months, or entire SAP components that were paid for but never implemented.
Make a list of:
- Inactive User Accounts – Users with no logins in 90+ days, duplicate accounts, or accounts assigned to employees who left. Each such license can potentially be reclaimed or removed.
- Unneeded Modules or Engines – Check if you’re paying maintenance on SAP components that are not in use (e.g., an old CRM or supply chain module that a project has abandoned).
- Mismatched License Types – Many companies over-license users with expensive Professional licenses when those users only need limited access. For instance, a warehouse clerk might only require an Employee Self-Service license, which costs a fraction of the cost of a Professional license. Right-sizing these entitlements can significantly reduce the number of licenses and associated costs.
Real-world example: One enterprise audit revealed that 20% of its SAP named users were tied to former employees or duplicate accounts.
By cleansing this shelfware, they avoided renewing hundreds of unnecessary licenses, immediately lowering their annual support bill.
Key point: Every $1 of unused SAP licenses you eliminate avoids roughly $0.22 in yearly support fees. Removing shelfware not only saves money but also simplifies compliance (fewer licenses to track) and clarifies what the business truly needs from SAP.
Rightsizing License Types
Another aspect of footprint reduction is ensuring each user has the appropriate license type. SAP offers different user license categories (e.g., Professional, Limited/Functional, Employee Self-Service), each priced differently.
If everyone gets a top-tier license by default, you’re likely overpaying.
For perspective, a Professional user license typically costs around $3,000 (one-time), while a Limited user license is approximately $1,500, and a basic ESS user license is around $100. Annual support is 22% of those costs.
Misclassifying 100 employees with Professional licenses instead of Limited Licenses could mean thousands of dollars in unnecessary support fees every year.
By analyzing usage patterns, you can downgrade some users to cheaper license types without affecting their work.
This license “rightsizing” immediately reduces the footprint and prevents future growth of shelfware. It’s crucial, however, to document these changes and ensure no user loses access to features they truly need – cost optimization should never create compliance risks.
| User License Type | Approx. One-Time Cost | Annual Support (22%) | Usage Scenario |
|---|---|---|---|
| Professional User | $3,000 per user | $660 per year | Full SAP access for power users and administrators. |
| Limited/Functional User | $1,500 per user | $330 per year | Restricted to specific modules or roles (typical business end-users). |
| Employee Self-Service | $100 per user | $22 per year | Self-service tasks only (e.g. HR portal, time entry). |
Table: Example SAP Named User License Costs. Optimizing license types can halve or even eliminate unnecessary costs for many users.
Retiring Legacy SAP Systems to Shrink the Footprint
Beyond user licenses, many enterprises maintain legacy SAP systems that are no longer justifiable for their upkeep.
These might be older SAP ECC instances or separate SAP modules (such as CRM, SRM, and BW) that the business is no longer actively using due to changes in strategy or the migration of functionality elsewhere.
Often, companies keep legacy systems running in read-only mode solely to access historical data for compliance purposes, yet continue to pay full support and maintenance on them. Retiring or decommissioning such systems can result in significant savings.
This involves archiving historical data (using tools such as SAP Information Lifecycle Management or third-party archiving solutions) and then decommissioning the old software and servers.
The impact is twofold: you eliminate the support fees for that system and also cut the infrastructure and labor costs associated with maintaining it.
For example, a global manufacturer that decommissioned six outdated SAP instances (finance and HR systems from a past era) saved roughly €2 million per year in maintenance and operating costs.
Those savings come from not only canceling SAP support on those legacy systems but also from reduced data center and admin expenses.
To retire a legacy SAP system safely, CIOs should:
- Archive and secure the data – Migrate any necessary historical data to a low-cost storage or an archive within the current SAP system, ensuring it remains accessible for audit or legal purposes.
- Validate compliance – Confirm you’re meeting regulatory requirements for data retention after decommissioning. For instance, financial records or HR data may need to be stored in a read-only format for a specified number of years. SAP ILM or third-party tools can help keep data available without requiring the full application to be run.
- Plan the contract exit – Coordinate the retirement with SAP contract milestones to ensure a seamless transition. You may need to provide SAP with notice if you intend to discontinue support for a product. Typically, at the next renewal or S/4HANA migration, you can formally terminate those licenses or modules so they no longer incur fees. Timing is key; SAP usually won’t refund prepaid maintenance if you shut a system mid-term.
The payoff of legacy system retirement isn’t just cost – it also simplifies your IT landscape. Fewer systems mean less complexity and risk.
Your team can focus on supporting the core modern platforms instead of babysitting obsolete ones.
In essence, you lower your SAP footprint by eliminating unnecessary components.
Lowering the SAP Support Cost Base
The ultimate goal of reducing your SAP footprint is to lower the support cost base – the pool of license value on which SAP calculates maintenance fees.
Once you’ve identified unused licenses and decided which legacy systems or modules to retire, the next step is to work with SAP (or your support provider) to realize those savings.
Remember, SAP support contracts are often sticky: you can’t simply stop paying for a subset of licenses in the middle of a contract period. However, you can negotiate changes at renewal or during major licensing events.
Here are strategies to reduce the support base:
- Terminate Shelfware at Renewal: When your annual support renewal comes up, remove the licenses you no longer need from the agreement. This might mean surrendering those licenses (you won’t legally own the software anymore), but it eliminates all future maintenance costs associated with them. Every license dropped is immediate budget relief. Ensure that you initiate this conversation with SAP well in advance of the renewal date – it may require executive approval on their side.
- Swap or Trade Down: In some cases, SAP may allow you to swap unused products for something of equal value that you do need. For example, suppose you’re not using an old SAP component (engine) worth $250,000. In that case, you might be able to credit that value toward new licenses (say, for SAP Analytics or another module) rather than wasting the investment. This keeps your net license count efficient.
- Leverage Contract Conversions: If you’re migrating to SAP S/4HANA or another big change, consider a contract conversion. SAP’s conversion programs let you trade in legacy licenses for cloud subscriptions or new licenses, often giving credit for the value of old licenses. This is an opportunity to drop all the redundant pieces. By the end, you want a lean license portfolio that reflects current usage, so you’re not paying maintenance on anything idle.
Another powerful lever is to consider third-party support for certain systems. Companies like Rimini Street and others offer support for SAP ECC and Business Suite at roughly 50% of SAP’s maintenance fees.
If you have a stable, legacy SAP environment that you aren’t enhancing, third-party support can help reduce costs while you determine your long-term plans.
Be aware of trade-offs: while on third-party support, you won’t get new SAP updates or patches directly from SAP.
Some organizations use this as a short-to mid-term solution – saving money on older systems for a few years – and then either eventually decommission them or return to SAP support when an upgrade is needed.
The mere option of third-party support also gives you negotiating leverage with SAP. If SAP knows you’re willing to take your support dollars elsewhere, they may offer a discount or flexible terms to keep your business.
Contract Negotiation Strategies
Reducing the SAP footprint often goes hand in hand with contract negotiations.
SAP sales reps may resist reducing your license counts or support costs, but with the right approach, you can achieve a better deal:
- Bundle Discussions: Align any new purchase or upgrade discussions with your support renewal negotiation. SAP is more inclined to accommodate requests (such as dropping some licenses or offering a support fee break) if it sees additional business coming it’s way. For instance, if you’re considering buying S/4HANA or another SAP product, consider negotiating a package that includes retiring your legacy licenses. You might negotiate to receive a year of free support on the new product or a credit for old licenses, thereby offsetting the costs.
- Timing and Leverage: Try to time your negotiations with SAP’s sales calendar. The end of the quarter or fiscal year (for SAP, year-end is typically December) is when they are eager to close deals. A well-timed ask, such as reducing your support base or securing better terms, is more likely to be approved when the sales team needs to hit a target. Also, don’t be afraid to mention your constraints and alternatives. If you have a third-party support quote or an internal mandate to reduce costs, please notify SAP. Showing that you have options forces SAP to take your requests seriously.
- Ask for Price Protections: Even after trimming down licenses, ensure the support for the remaining ones doesn’t spiral out of control. Negotiate caps on annual maintenance increases (e.g., no more than 3% per year, or even a flat freeze for a couple of years). Also, clarify that if you drop more licenses in future years, you won’t be penalized. Everything is negotiable if approached early and backed by data. SAP may claim its policies are fixed, but big customers regularly secure custom terms, so it’s worth trying.
In negotiations, come armed with the data from your internal analysis: how many licenses you truly need, how much money is being wasted on shelfware, and the cost-benefit of alternatives.
This turns the conversation from a generic renewal into a fact-based business case.
The result should be an SAP contract aligned to your current footprint – nothing more, nothing less – at a sustainable cost.
Recommendations
- Audit Your SAP Usage Regularly: Establish a quarterly or annual internal audit of SAP user activity and license assignment. Catch unused accounts and shelfware early, before renewal time.
- Reclaim and Recycle Licenses: Promptly remove or reallocate SAP licenses when employees leave or roles change. This prevents the accumulation of costly shelfware over time.
- Decommission to Cut Costs: Identify legacy SAP systems or modules that deliver minimal value and are no longer required. Plan to archive their data and shut them down, so you can drop their licenses from support.
- Optimize License Types: Match each user to the right license level. Avoid giving all users expensive “Professional” licenses if many can operate with cheaper licenses. This rightsizing can significantly shrink your license footprint.
- Engage SAP with a Plan: Don’t wait for SAP’s audit – proactively approach your SAP account team with a proposal to remove or trade unused licenses at the next renewal. Show them you’ve done your homework on what you need (and don’t need).
- Leverage Third-Party Quotes: Even if you intend to stay with SAP support, obtain a quote from a third-party support provider. Use it as leverage in negotiations to push SAP for a better maintenance rate or concessions.
- Align with Strategic Initiatives: Tie your license reduction or support cost requests to larger initiatives (e.g., “We need to save costs to fund a S/4HANA migration”). This context can motivate SAP to cooperate by seeing a future opportunity.
- Secure Future Flexibility: When you do sign new contracts, include clauses that allow some level of downsizing or swapping of licenses in the future. Build in the ability to continually optimize your SAP footprint as business needs change.
FAQ
Q1: What does SAP’s standard support fee include, and why is it so expensive?
A: SAP Standard Support (usually ~22% of your license purchase value per year) provides access to SAP’s help desk, software patches, legal updates, and new version upgrades. It feels expensive because it’s a percentage of your original license costs – as your SAP license portfolio grows, so do the support fees. Many organizations find the cost high relative to the support they use, especially if their SAP systems are stable and not heavily reliant on frequent updates.
Q2: Can we stop paying maintenance on SAP licenses or modules we aren’t using?
A: Not immediately in the middle of a contract term. SAP typically doesn’t allow dropping specific licenses from support until your renewal or contract renegotiation point. At that time, you can choose to terminate unused licenses so you don’t pay maintenance on them going forward. Essentially, you relinquish the rights to that software, but you also cease the associated annual fees. Plan for this – identity what you want to drop and inform SAP as you approach renewal discussions.
Q3: How can we calculate the cost of our unused SAP licenses (shelfware)?
A: Add up the original cost of all SAP licenses and components that are not currently in use. Then apply your support rate (e.g., 22%). That result is the annual maintenance money burned on shelfware. For example, if you have $500,000 worth of SAP software sitting idle, about $110,000 per year is being paid in support for nothing. This calculation helps quantify the savings opportunity. Presenting these numbers internally (and to SAP) builds the case for cutting those costs.
Q4: What are the risks of moving a system to third-party support to save money?
A: The primary trade-off with third-party support is that you won’t receive new software updates or direct support from SAP. Third-party providers will help keep your current system running (and often can create custom fixes). Still, if you later decide to upgrade to a newer SAP version, you’ll need to return to SAP maintenance (which could involve back-paying some fees for the gap period). There’s also a relationship aspect: leaving SAP’s official support might make SAP less inclined to offer incentives or favorable terms until you come back. Many companies still find the cost savings worth it for older systems – they stay on third-party support for years, then budget for a re-license or upgrade when necessary.
Q5: Will SAP find out if we’re evaluating third-party support options?
A: Not unless you tell them. Your discussions with alternative support vendors are confidential. However, it can be strategically beneficial to inform SAP that you’re considering third-party support. Bringing it up during negotiations (tactfully) signals to SAP that they could lose your support business. Often, SAP’s response will be to emphasize what you’d lose without their support, but it can also prompt them to offer a better deal or discounts to keep you. In short, you don’t have to hide the fact that you have alternatives; using that fact can improve your leverage.
Q6: If we have a global SAP contract, can we reduce the footprint in one region without affecting others?
A: SAP support agreements are typically enterprise-wide, not country-specific. You generally can’t pay less maintenance just because one region isn’t utilizing its licenses. The better approach is to remove or reallocate licenses that are not used in that region entirely. For instance, if a certain country’s business unit no longer needs 50 SAP users, you would target those licenses to drop at the next renewal. That way, those costs are covered by the global contract. You won’t likely get a special regional discount within a single global contract, so focus on the overall license count instead.
Q7: Can we negotiate a lower support percentage (say 18% instead of 22%) with SAP?
A: It’s uncommon for SAP to directly reduce the standard support rate. Most customers pay the 22%. SAP tends to resist setting a precedent of a lower percentage. However, you can achieve an effective reduction through other means. For example, you might negotiate a couple of years of flat maintenance (with no annual increase) or secure a one-time credit or discount on the support renewal. These tactics lower the total cost without SAP formally saying, “We charge 18%.” Large enterprises with significant leverage have, on rare occasions, negotiated custom support arrangements; however, these usually take the form of credits or bundled deals rather than an explicit percentage cut.
Q8: What leverage do we have if SAP claims that reductions or changes are “not negotiable”?
A: Your leverage is demonstrating that you have options and the will to exercise them. If SAP sales reps say something is non-negotiable, involve higher management and make clear that your organization is serious about cutting costs. Show that you are willing to limit future spend, consider third-party support, or even contemplate migrating off certain SAP products if you don’t get relief. SAP is very much committed to retaining your business, including both your current maintenance revenue and future product sales. If they believe you might walk away (even partially), previously “fixed” policies often become flexible. Always be polite but firm in stating your need for a solution, and back it up with data and alternatives.
Q9: We plan to move to S/4HANA in the future – should we clean up licenses now or wait?
A: Clean them up now. A S/4HANA migration is the perfect time to streamline your SAP footprint. When transitioning to S/4HANA (which often involves a new contract), you don’t want to carry over unused users or obsolete modules. SAP has conversion programs where you can trade in old licenses for new ones – you’ll get more value if those old licenses are ones you need. Before migration, identify which current licenses and systems won’t be needed going forward (for example, if S/4HANA includes functionality that replaces an add-on you currently use). By dropping the dead weight, you’ll lower the cost of the new S/4 environment and avoid paying maintenance on stuff that you never even deploy in the new system. It’s best to enter an S/4HANA contract with a clean slate, containing only the licenses that map to real requirements.
Q10: What’s a commonly overlooked tactic to reduce SAP spend and footprint?
A: One overlooked strategy is to make SAP license management an ongoing discipline rather than a one-time project. Many companies conduct a major cleanup or negotiation every few years, but then shelfware creeps back in. By instituting continuous governance – for example, a process to immediately reclaim licenses when employees depart, or an annual true-up internally – you prevent waste from accumulating. Another commonly missed opportunity is negotiating future flexibility during your initial purchase or renewal. For instance, you can request the right to swap certain licenses or reduce a percentage at each anniversary. Companies often don’t realize they can ask for these clauses. In summary, proactively managing your SAP footprint year-round and baking optimization options into your contracts are tactics that can save millions over the long run.
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