SAP ERP Private Edition Transition Option
SAP’s new ERP, private edition, transition option offers select SAP ECC customers a path to continue running ECC until 2033 under a premium cloud subscription.
It targets large, complex enterprises that won’t complete their SAP S/4HANA migration by 2027 (mainstream support) or even 2030 (extended maintenance).
This transition option is crucial now because CIOs must decide soon whether to opt for extra time under SAP’s terms or accelerate their move to S/4HANA before current support ends.
In short, it’s a bridge for those who need it – but it comes with conditions, costs, and strategic decisions that need careful consideration today.
Read our SAP ERP Private Cloud Overview.
Extended ECC Support to 2033: What Is SAP’s Transition Option?
Insight:
SAP is allowing a select group of ECC customers to operate SAP ECC (ERP Central Component) beyond 2030, to year-end 2033, with full support.
This SAP ERP private edition transition option is not a simple support extension for on-premise ECC; rather, it’s a new subscription service in the cloud.
SAP positions it as a safety net for organizations with sprawling, customized ECC environments that simply cannot move to S/4HANA by the 2027 mainstream or even 2030 extended support deadlines.
Unlike traditional support, this offering bundles ECC software and support into a cloud subscription (private cloud edition) that SAP will manage, including continued patches for security, legal, and stability issues through 2033.
It’s essentially ECC as a service for the final three years after on-prem support would otherwise expire.
Real-world scenario:
Imagine a global manufacturer running dozens of heavily customized ECC 6.0 instances across continents. They rely on ECC for complex, mission-critical processes and have integrations that would take years to retrofit for S/4HANA.
Even with SAP’s current extended maintenance (through 2030) and intense migration efforts, they foresee that not all systems will be on S/4HANA by then.
For such a company, the transition option is a potential lifeline, as it allows them to lift-and-shift ECC into an SAP-managed private cloud (for example, on Azure via RISE with SAP) by 2030, and then keep those ECC systems supported for up to three more years (2031–2033).
This avoids a period of unsupported “gray zone” where ECC would otherwise run without vendor support.
The trade-off is that they must meet SAP’s prerequisites (like migrating ECC to the HANA database and the cloud environment by 2030) and pay a significant subscription premium for those extra years of support.
Practical takeaway: Enterprise buyers should view the transition option as a strategic last resort.
It’s intended for large, complex SAP shops that genuinely require additional time due to business constraints – not as a convenient way to procrastinate an S/4HANA project.
If you believe your organization will require this path, start planning early:
- Engage SAP (and possibly a trusted advisor) now to understand the contractual requirements (e.g., you’ll need a RISE with SAP contract and a move to SAP S/4HANA Private Cloud, running your ECC on HANA, by the end of 2030).
- Assess which ECC systems and modules are in scope (SAP has indicated only core ECC components are covered – the full SAP Business Suite 7 may not all qualify after 2030).
- Budget for a substantial cost increase during 2031–2033, as SAP has signaled this will come at a higher fee than normal cloud subscriptions. In short, use 2025–2028 to determine if you qualify and truly need this option, and if so, to negotiate and prepare for a smooth move before the 2030 cutoff.
Comparing Options: ECC On-Prem vs. Transition Option vs. RISE with SAP
Most ECC customers now face three main paths leading into the next decade: continue on ECC (within standard support limits), adopt the new transition option to extend ECC in SAP’s cloud, or migrate fully to RISE with SAP S/4HANA (SAP’s flagship cloud offering). Each path has distinct implications for cost, contract terms, and flexibility.
The table below summarizes key differences:
| Factor | Stay on ECC (On-Premises)<br>Extended Maintenance | ECC Transition Option<br>SAP ERP Pvt Edition | RISE with SAP S/4HANA<br>Cloud Subscription |
|---|---|---|---|
| Support Horizon | Mainstream support until 2027; optional extended maintenance to 2030 (for an extra fee). No SAP support beyond 2030 (unless run unsupported). | Support to 2033 (security patches, legal updates) under subscription from 2031–2033. Must migrate ECC to SAP’s private cloud by end of 2030 to qualify. | S/4HANA support until at least 2040 (per SAP’s roadmap). ECC is replaced by S/4HANA, so legacy ECC support dates become irrelevant after migration. |
| Pricing Model | Perpetual licenses + annual maintenance fee (~22% of license value). Extended maintenance adds +2% (approx) on top of standard maintenance for 2028–2030. Pay infrastructure and operations separately (customer-managed). | Subscription-based (annual cloud subscription fee) covering software + support + infrastructure (SAP or hyperscaler). Premium uplift expected for 2031–33 vs normal S/4 cloud rates. Requires continued RISE subscription or similar starting by 2028–2030. | Subscription (RISE) – typically one bundle price that includes S/4HANA licenses, support (cloud success services), and cloud infrastructure. Priced per metrics like number of users or Full Usage Equivalents. Can reallocate existing license value as credit when converting to RISE. |
| Contract & Terms | Covered by standard SAP license agreement + support contract. Extended maintenance is an optional addendum (must be on latest ECC EHP and pay uplift). Flexible term – you own the licenses perpetually, even if out of maintenance (can run at own risk). | Requires signing a RISE with SAP (private edition) agreement or equivalent by 2028. Essentially a new 3-year cloud contract (2031–2033) appended to your RISE deal. Includes strict conditions: ECC must run on HANA DB and in SAP’s cloud environment. After 2033, you must transition to S/4HANA (no further ECC extensions planned). | Typically a 3- to 5-year RISE subscription contract. SAP manages the system in cloud. Contract includes cloud-specific terms (e.g. uptime SLAs, cloud service descriptions). Vendor lock-in for term; need to renew or exit after term. Easier to scale up/down users or switch to public cloud edition, but conversion from on-prem license must be negotiated (ensure proper conversion credits). |
| Flexibility & Control | High technical control (on-premise): you manage customizations, upgrades, and schedule (with support boundaries). However, post-2030 you’re on your own (no patches). You can defer S/4 indefinitely, but at cost of running unsupported, which carries security/compliance risks. | Moderate control: You keep your ECC customizations and data, but now within SAP’s cloud. Some flexibility in scheduling updates (since it’s single-tenant), but you must adhere to SAP’s cloud operations standards. Limited to ECC core scope – some legacy add-ons may not be allowed post-2030. It buys time, but you’re effectively committing to SAP’s cloud and eventually S/4. | Moderate control: In a private cloud, you can still have mods and your own upgrade timing (to a point), but you’re on S/4HANA (new code line) – meaning some old custom code or integrations must be redone. On the plus side, you immediately gain access to new S/4 innovations and can shed the technical debt of ECC. Flexibility to use SAP’s latest cloud services (BTP, AI, etc.) comes sooner. |
| Cost Profile | Lower short-term cost if staying on standard maintenance through 2027. Extended maintenance 2028–2030 will increase annual support fees slightly. No subscription fees – infrastructure is owned/hosted by you (could be on-prem or IaaS). However, any delay in migration could increase technical debt and eventual project cost. | Higher cost in 2031–33: subscription likely significantly more than current maintenance (SAP is effectively charging for keeping legacy system viable). Also, from now until 2030 you might run dual costs: paying maintenance on ECC plus any initial RISE contract fees for the private edition environment. TCO could spike if not negotiated carefully (e.g. you may negotiate to offset maintenance against RISE fees during overlap). | Cloud subscription cost kicks in once you migrate (could be as early as now). RISE can be expensive, but you may offset costs by retiring old hardware and support. SAP often offers incentives or credits for converting existing licenses. Over a 5-10 year period, moving to S/4 sooner might be cheaper than paying extended maintenance + later transition premiums, especially if SAP raises prices for the transition years. |
Insight:
This comparison makes it clear that the transition option is not “business as usual.” It’s a different commercial model (subscription vs. owning licenses) and comes with strings attached.
The companies most likely to benefit are those who truly cannot fully migrate by 2030 and are willing to trade higher costs for continued support and a controlled timeline.
In contrast, if you have a simpler SAP landscape or can complete an S/4HANA migration by 2027–2030, adhering to the standard path (perhaps utilizing extended maintenance through 2030 as a buffer) will be far more straightforward and cost-effective.
Real-world scenario:
A mid-sized firm with one ECC instance might decide not to entertain the transition option at all. They calculate that paying 22% maintenance (or 24% during 2028–2030) and then moving to S/4HANA by 2028 is cheaper and simpler than entering a special contract for 2031–2033.
On the other hand, a multinational conglomerate with multiple ECC systems could decide that, despite the cost, locking in support until 2033 is worth it to avoid disrupting dozens of business units.
That firm would pursue the transition option, while simultaneously running a phased S/4 migration – essentially using 2031–2033 to complete the stragglers.
Practical takeaway:
Map out your SAP roadmap now and weigh these options against each other.
Key actions include:
- Model the costs of each scenario over the next 5–8 years (don’t forget to include hardware and staffing for on-prem vs. cloud subscription costs, and the potential premium for 2031–2033).
- Identify any non-negotiable deadlines for your industry or company (for example, if running unsupported beyond 2030 is unacceptable for regulatory reasons, the transition option might be your only fallback if S/4 isn’t ready).
- Discuss RISE with SAP offers with your SAP account team. Even if you aim to avoid the transition option, SAP’s sales reps might offer incentives today (like conversion credits or extended maintenance discounts) if you commit to a RISE migration plan. Understand those trade-offs, but keep control of the timeline on your terms.
The Cost Equation: Weighing Maintenance vs. Subscription vs. Migration
Insight:
Cost is often the deciding factor for SAP customers considering the transition option. Simply put, staying on ECC longer will cost more, potentially a lot more, than moving to S/4HANA on SAP’s original schedule. SAP’s extended maintenance (2028–2030) already carries a surcharge (roughly +2% on annual maintenance fees).
The new transition option, effective from 2031 onward, is a premium subscription service, likely priced higher than even a standard S/4HANA cloud subscription. SAP justifies this premium by the complexity of supporting older ECC technology in a cloud environment.
Additionally, customers opting in will essentially be paying for RISE with SAP (or a similar cloud contract) during 2028–2030 to host their ECC, and then an elevated fee for 2031–2033.
From a Total Cost of Ownership (TCO) perspective, companies must compare:
- Carrying costs of ECC (maintenance fees, extended maintenance uplifts, hardware or cloud hosting if you self-manage, and the opportunity cost of staying on older technology) versus
- Investing in S/4HANA now (the project implementation cost, RISE subscription or new licenses, potential business disruption costs, but also earlier realization of benefits and avoidance of extra legacy support fees).
Real-world scenario:
Consider a company paying $5M/year in SAP support for ECC today. If they stay on ECC until 2030, the annual cost might increase to approximately $5.5M during 2028–2030, with the maintenance uplift.
If they then take the transition option for 2031–2033, suppose SAP charges them the equivalent of $8 million per year as a cloud subscription for those legacy systems (since it includes hosting and premium support).
Over the next 8 years (2025–2033), that path could total approximately $ 50 million or more. In contrast, if the company moves to S/4HANA by 2028, it might pay, say, $6M/year in RISE subscription from 2028 onward, plus $10-15M one-time in migration project costs – totaling perhaps around $40 million over the same period.
The exact numbers will vary, but this illustrates how delaying migration can carry a significant “late fee”. The transition option is essentially SAP charging for delay insurance.
Practical takeaway:
Enterprises should build a detailed financial model for their SAP strategy:
- Include one-time migration costs (implementation partners, data conversion, etc.) for moving to S/4HANA.
- Include recurring costs: current maintenance vs. future subscription fees. Don’t forget new costs, such as SAP’s Cloud Success Services fees (which are often a percentage of the subscription), if you opt for RISE.
- Factor in soft costs and benefits, such as the value of new S/4 functionality and improved processes, versus the cost of potentially having to maintain dual systems or delay innovation if you stay on ECC.
- Use these figures to drive an ROI or breakeven analysis. In many cases, you’ll find that accelerating the S/4HANA move pays off in the long run, unless your migration is truly massive and complex (in which case the transition option’s cost might be justifiable as a risk mitigation).
Finally, remember that SAP’s pricing is negotiable. The “list price” of the transition option or RISE subscription may be steep. Still, large enterprises have room to negotiate better terms (especially if you can demonstrate alternatives or a strong business case).
This is where timing and leverage (discussed later) can potentially save millions.
S/4HANA Compatibility Packs: The 2025 Deadline You Can’t Ignore
Insight:
A less publicized but critical deadline is looming December 31, 2025 – the end of usage rights for most SAP S/4HANA Compatibility Packs.
Compatibility Packs are temporary measures that allow S/4HANA adopters to continue using certain classic SAP ECC functionality (modules or transactions that don’t have immediate S/4HANA equivalents) within an S/4HANA system.
SAP has been very clear: after 2025, those legacy ECC-based components must be phased out; otherwise, you risk violating your license.
In other words, if your S/4HANA migration strategy included leaning on old ECC programs (via compatibility packs) for a few years, that grace period is expiring.
SAP considers the use of those packs after 2025 as unlicensed (“commercial non-compliance”) and has even hinted that it may technically disable them in future releases.
Real-world scenario:
Suppose a utilities company moved to S/4HANA in 2021 but kept using the classic Customer Service (CS) module via a compatibility pack because the S/4HANA Service solution wasn’t fully mature for their needs.
Now, as 2025 comes to a close, they face a decision: complete the deployment of the new S/4HANA Service module (or an alternative) to replace the CS functionality, or risk being out of compliance.
Another example is a distributor that relied on LE-TRA (Logistics Execution – Transportation) in ECC, which in S/4 is replaced by a different solution (SAP TM).
If they are still using the old LE-TRA via compatibility mode in their S/4HANA system come 2026, SAP could consider it a breach of contract. Notably, no support will be provided for transactions beyond 2025.
SAP has extended a few specific compatibility functions (such as CS, LE-TRA, and certain Process Industry PP-PI transactions) until 2030 for RISE with SAP customers, recognizing that these are especially complex.
However, for the vast majority of customers, 2025 is the hard stop.
Practical takeaway: Conduct a “compatibility pack audit” in your SAP landscape.
Even if you are still on ECC today, you may have plans to migrate in phases, with some systems going live on S/4HANA soon.
Ensure that any use of compatibility scope functionality is identified and addressed:
- If you’re already on S/4HANA (or implementing it), check which – if any – compatibility packs you have activated. These could be industry-specific solutions or transitional use of CRM, SRM, and SCM components inside S/4.
- For each, develop a plan before the end of 2025 to either migrate off that functionality or secure an exception. “Migrate off” could refer to enabling the native S/4HANA module or a new cloud solution (for example, transitioning from classic SAP CRM to SAP’s Cloud for Customer or another CRM).
- If you require an extension (e.g., you’re on RISE and using one of the few extended packs like CS or LE-TRA), work with SAP to document that. RISE customers have a bit more leeway here (till 2030 for those specific cases), but don’t assume that automatically covers you – get it in writing in your contract or at least in an official communication.
- Recognize that after 2025, using expired compatibility functions is a compliance risk. In an audit, SAP could count that as unlicensed use, leading to a penalty or forced purchase of proper licenses (if even available). Technically, you also run the risk that future S/4 updates may simply remove those old transaction codes entirely.
In summary, 2025 is a key milestone on the road to S/4HANA, extending beyond the well-known ECC support dates. Align your internal S/4HANA project timelines to eliminate any dependence on compatibility packs by year-end 2025.
This may require prioritizing certain workstreams now (for example, implementing a replacement for a legacy module sooner than you planned) to avoid a last-minute scramble.
Digital Access Licensing: Indirect Usage and DAAP Decisions
Insight:
Indirect access (when non-SAP systems or external users interact with SAP data) remains one of the trickiest licensing areas, especially as companies transform their SAP environments.
SAP’s answer is the Digital Access model – licensing by “digital documents” created (e.g., an external system creates a Sales Order in SAP, that’s a document).
SAP has strongly encouraged customers to adopt this model, offering the Digital Access Adoption Program (DAAP) with massive discounts and incentives.
As of 2025, DAAP remains available (SAP has extended the program without a fixed end date), allowing enterprises to switch to document-based licensing with up to 90% discounts on the cost, plus credits for past investments and even amnesty for unreported usage.
However, choosing digital access isn’t automatically the best financial move for everyone – it depends on your usage patterns.
Some organizations might pay more under a document model than they do with classic named-user licenses, especially if their indirect usage volume is high.
Real-world scenario:
Consider a retailer whose e-commerce platform creates thousands of orders and customer records in SAP ERP. Under traditional licensing, every one of those orders technically required a licensed “user” or an interface license, which was impractical, leaving them vulnerable to audit exposure. If they embrace digital access, they’d license those documents instead.
Using DAAP Option B (90% off), they can buy a block of, say, 1 million documents for a fraction of the list price, covering their usage and eliminating the audit risk for that scenario in the future.
On the other hand, consider a company whose third-party interactions with SAP are minimal – perhaps just a couple of interfaces for data synchronization.
They already have enough named-user licenses to cover the people involved. For them, switching to digital access might be unnecessary.
It could be more cost-effective to stick with their existing licensing and simply ensure they’re compliant (maybe just a few extra user licenses to cover any technical users or integrations).
Practical takeaway:
Now is the time to make a conscious decision on indirect licensing:
- Measure your indirect usage: SAP provides tools (and the Digital Access Evaluation Service) to help count how many documents your systems generate. You can also use third-party tools or internal logs. Conduct this analysis under NDA or internally first – you don’t want to inadvertently disclose a compliance issue to SAP without a plan.
- Weigh DAAP’s incentives: Under DAAP, SAP’s Option A and B are very generous one-time deals. If your analysis reveals a substantial exposure (hundreds of thousands of documents or more), strongly consider taking advantage of one of these options while they are available. Remember, DAAP not only discounts licenses, it often forgives past indirect usage (so SAP agrees not to back-charge you for those years of unlicensed use once you buy in).
- Consider staying on classic licensing if appropriate: If your indirect use is low and well-covered by your existing named users, you might decide not to adopt digital access yet. Some enterprises prefer to avoid the document model because it introduces a new metric to manage (document counts) and potential future costs if their usage spikes. However, be cautious – if you forgo DAAP now and your business expands its digital connections (APIs, bots, etc.), you could face a hefty compliance bill later with fewer discounts available.
- Plan for S/4HANA: Note that when moving to S/4HANA or RISE, you will need to address indirect usage in the new contract. RISE with SAP, for instance, might bundle some indirect usage rights, but many subscription contracts still expect you to comply with digital access or have an equivalent metric. Negotiate this as part of any cloud deal (e.g., ensure your RISE subscription includes a sufficient quantity of digital access documents or an alternative model to avoid double billing).
In summary, don’t ignore indirect access. It’s a key part of SAP’s audit focus (as we’ll see next). Resolve it on your terms, ideally by leveraging SAP’s current incentives rather than risk an audit surprise.
Whether through DAAP or traditional licenses, make sure you have a defensible license position for every third-party integration into your SAP ERP.
SAP Audits and Compliance: Preparing for GLAC’s New Focus
Insight:
SAP’s Global License Auditing and Compliance (GLAC) team has sharpened its focus for 2025. Historically, audits were primarily focused on counting named users and verifying the purchase of sufficient engine licenses.
Now, SAP is laser-focused on areas that often slip through the cracks: indirect usage (digital access), use of SAP software in hybrid/cloud environments, and things like S/4HANA license compliance (including that compatibility pack issue mentioned earlier) and HANA database usage (ensuring you haven’t exceeded licensed memory).
SAP knows that many customers are in transition – some are still on ECC, while others are partly on the cloud – and it’s adapting its compliance efforts accordingly.
In practice, this means that if you haven’t addressed known compliance areas (such as indirect access or migrating to HANA licenses correctly), you should assume an audit is forthcoming. SAP has spent years warning customers and offering programs (DAAP, etc.); by 2025, their patience for leniency is low.
Real-world scenario:
A large services company learned this the hard way. They had not yet adopted digital access and were still using an outdated indirect usage workaround. In 2024, they got an audit letter from GLAC.
The audit requested detailed logs of documents created via interfaces and indeed found hundreds of thousands of unlicensed document creations.
SAP presented a bill in the millions – but also offered to retroactively sign them up for digital access (without the big DAAP discount since that had to be done proactively).
The customer ended up paying far more than they would have if they had taken the DAAP deal earlier.
Contrast that with another organization that prepared ahead: they performed an internal license audit in early 2024, identified that their HANA database usage had grown beyond their license, and that some contractors had been given the wrong user license types.
They right-sized their licenses (negotiated a deal to upsize their HANA license before an audit) and cleaned up user roles.
When SAP’s auditors arrived, everything aligned, and the audit closed with zero findings. Proactive compliance saved them a lot of pain (and money).
Practical takeaway:
To avoid unpleasant surprises, treat SAP compliance as an ongoing discipline:
- Self-audit now: Don’t wait for SAP to knock. Use SAP’s LAW (License Administration Workbench) and other tools to measure user counts, engine metrics, and digital document counts. Review these against your entitlements. If something’s off (e.g., too many Professional users, or use of an engine you didn’t realize needed a license), address it quietly.
- Mind the hotspots: Pay extra attention to known SAP audit “hot topics” for 2025:
- Indirect access: We discussed this – ensure you either have digital access licenses or a documented rationale explaining why your interfaces don’t require them (some read-only scenarios are exempt, but you must be certain).
- HANA memory: If you’re on Suite on HANA or S/4 on-prem, check your HANA DB license metric. These licenses often cap the memory usage. One spike could mean you’re out of compliance. If you’ve exceeded it, consider negotiating an upgrade before they audit (it will be cheaper than a compliance settlement).
- Cloud subscriptions: If you use SAP cloud products (SuccessFactors, Ariba, etc.), be aware that SAP can monitor your usage (e.g., number of employees in SF, number of documents in Ariba). True-ups happen at renewal. Keep an eye on these metrics so you’re not caught off guard at renewal time with an “auto-audit” via the cloud system.
- Migration period licensing: If you’re in the middle of an S/4 migration and temporarily have dual systems (ECC and S/4), make sure you have proper licenses for both (or an explicit contractual allowance). SAP sometimes grants “bridge” rights for transition, but don’t assume you can double-run indefinitely without written permission.
- Don’t invite trouble: When engaging SAP on any licensing discussion, be strategic. For example, if you request SAP’s help to run an official Digital Access evaluation, understand that the results could flag a compliance issue. It might be fine if your goal is to then sign a DAAP deal, but if you’re just curious, it’s better to run an internal check first. Similarly, if you’re negotiating a new contract (like RISE or the transition option), avoid openly admitting to any compliance shortfalls – address them in the deal tactfully (e.g., as license swaps or additional purchases) rather than framing it as “we’ve been out of compliance.”
- Leverage audits in negotiations: Oddly enough, if you are about to commit to a major new contract (such as a cloud transition), you may want to negotiate an audit moratorium for a specified period or an agreement that any compliance issues discovered will be resolved under the new contract terms. SAP’s goal is to get you on the new model; they may be flexible in how they handle minor compliance gaps during your transition – but get that in writing.
Bottom line: SAP’s GLAC team is actively looking for revenue leakage. By preparing now – cleaning up your licensing and usage – you transform an audit from a threat into a mere formality.
This ensures that as you approach any significant transition (such as moving to S/4 or the private edition option), you do so without skeletons in your closet that SAP could use to pressure you.
Negotiation Levers: Getting the Best Deal from SAP
Insight:
The introduction of the ECC transition option, along with the push for RISE with SAP, actually gives customers some leverage – if they use it wisely. SAP is eager to lock in long-term cloud commitments. Enterprise buyers should approach these discussions as a negotiation, not a mandate.
Key levers include timing, competition, clarity of bundling, and contractual protections. The goal is to make SAP “earn” your business: if they want you to sign on for 3–5 more years (whether on ECC or S/4HANA cloud), you have the right to demand incentives and reasonable terms in return.
Real-world scenario:
A Fortune 500 company decided to explore the option of transitioning some of its systems. They didn’t just accept SAP’s first quote. Instead, they created a competitive atmosphere – simultaneously evaluating third-party support and cloud hosting as a fallback, and letting SAP know they had alternatives.
As year-end approached (SAP’s Q4 crunch), SAP offered them a sweeter deal: a cap on the annual price increase, some free SAP Business Technology Platform (BTP) credits, and a reduced “RISE conversion” fee to move their remaining licenses into the cloud.
Another company negotiating a straight RISE with SAP S/4HANA Private Cloud deal insisted on a contractual exit clause after 5 years and price protections on renewals, effectively preventing the dreaded lock-in price hike.
They achieved this by timing the deal late in the quarter and leveraging their significance as a customer – SAP didn’t want to lose the cloud opportunity.
From less positive experiences: a company that hurried into RISE in 2021, enticed by a sales pitch, later found they were overpaying for unused services (they’d been sold a bundle including SAP tools and services they didn’t need) and that their contract lacked flexibility (no ability to reduce users and a steep renewal uplift).
This highlights the importance of careful negotiation.
Practical takeaway: When negotiating with SAP, whether for extended ECC arrangements or a full S/4 cloud move, keep these tips in mind:
- Choose your moment: SAP has annual targets and quarter-end pressures. Engaging in Q4 or the end of SAP’s fiscal year (typically December) can improve your bargaining power. However, balance this against your timeline – don’t let their deadline rush you into a poor deal. Early planning allows you to use their timing without being desperate.
- Explore competitive options: Even if you intend to stick with SAP, it’s beneficial to evaluate alternatives. Could you use third-party support (like Rimini Street) for ECC instead of SAP’s extended maintenance? Could you host ECC on a hyperscaler yourself and just pay basic support? Could you consider delaying the movement of some workloads and using alternative software? By knowing and subtly mentioning these options, you signal to SAP that you have a BATNA (Best Alternative to a Negotiated Agreement). It often encourages them to present a more customer-friendly offer.
- Beware of bundling and “Trojan horse” offerings: SAP may bundle additional cloud services, AI tools, or require a specific tier of SAP Success Plan (premium support) in your contract. Scrutinize these. If they’re not valuable to you, push to remove them or at least understand their cost. Each bundle item can sometimes be a hidden cost. For example, if the transition option deal quietly mandates a high-level Success Plan at 20% of subscription, that’s significant – negotiate it.
- Lock in future costs: Insist on price caps for renewals or long-term commitments to ensure stability. If you sign a 3-year transition option, what happens in 2034 if you need an extension or as you roll onto S/4? Try to get a clause that any extension or subsequent S/4 subscription renewal won’t jump more than, say, a single-digit percentage. Similarly, for RISE, negotiate the terms of how subscription rates can increase after the initial term. Without this, you risk “price creeps” once you’re fully dependent on SAP’s cloud.
- Bridge the gap smartly: If you’ll essentially be double-paying (maintenance and a new subscription during the migration period), negotiate credits or a ramp-up period. For instance, some customers negotiate to continue paying maintenance on existing ECC licenses up to cutover, and only start the full RISE subscription charges when the system is live in the cloud. Or get credit for unused maintenance toward the new subscription. SAP can be amenable to creative structures if it means landing a cloud deal.
- Get migration support commitments: As part of the deal, see if SAP will include or discount services that help you migrate (e.g., SAP Enterprise Support advisory, or even SAP’s consulting hours for the move). At the very least, if you’re paying a premium, SAP should be helping ensure you succeed in migrating to S/4HANA by 2033. Make them articulate how they will help (via tools, services, check-ins) and include those in the agreement or scope.
- Document everything: Do not rely on salesperson promises that “you can always extend if needed” or “we’ll be reasonable on that aspect.” If something is important – such as the ability to drop users if you divest a business or an assurance that compatibility pack usage is allowed under RISE until 2030 – get it explicitly written into the contract or an addendum. Negotiation is the time to get clarity; after signing, your leverage is gone.
In summary, treat this like any major enterprise procurement.
SAP’s sales team is very experienced in pushing for their desired outcome; you need to be equally rigorous in defending your interests.
A well-negotiated deal can turn what might feel like a forced march (to S/4 or an expensive extension) into a manageable, business-aligned plan with controlled costs and fewer surprises.
Use the fact that SAP wants your long-term subscription commitment as your leverage to secure the best possible terms.
Recommendations
For CIOs, IT Directors, and Procurement Leaders navigating the ECC-to-S/4 journey, here are key recommendations to guide decision-making and negotiations:
- Start Planning Now for 2027–2030 Deadlines: Don’t wait until 2027 to figure out your SAP roadmap. Establish an executive steering group in 2025 to determine whether we can realistically migrate to S/4HANA by 2027. By 2030? Or should we pursue SAP’s transition option? Early clarity will drive all other preparations (budget, resources, contract talks).
- Use Extended Maintenance Wisely – Not as a Crutch: If you opt to pay for SAP’s extended maintenance through 2030, use that time productively. Freeze most new custom development on ECC (to avoid adding technical debt) and focus on S/4 readiness (data cleanup, process harmonization). Think of 2028–2030 as your grace period to prepare, not just “business as usual.”
- Evaluate the Transition Option Critically: Treat the private edition transition option as a Plan B, not a guaranteed entitlement. Assess if your estate truly needs 2031–2033. If only one out of, say, ten divisions is lagging, it might be cheaper to accelerate that division or seek an alternate solution for it, rather than extending everything. Remember, the option is all-or-nothing for each system: you’ll be paying premium support for those extra years, so ensure the business value is there.
- Model Your Costs for Each Path: Develop a detailed, multi-year cost model that compares scenarios (status quo, early S/4 move, and transition option). Include everything – licensing, maintenance, cloud subscriptions, hardware, implementation, even inflation. This not only guides internal strategy but can also be presented to SAP during negotiations to justify why a better price is needed (“Our CFO won’t approve this cloud move unless the 5-year TCO is at least neutral compared to staying on ECC”).
- Address License Gaps Before Transformation: It’s far better to true-up licenses now than under time pressure later. Use DAAP to resolve indirect access if it makes sense, convert any mismatched user licenses, and ensure you’ve licensed all the SAP engines in use. Entering a migration or contract renewal with a clean license position removes one significant source of stress (and eliminates a leverage point SAP could use against you).
- Engage with SAP – but Keep Control of the Narrative: By all means, have discussions with SAP about their offerings (RISE, transition options, etc.) and let them assess your systems (through a RISE value assessment or a similar approach). But maintain a healthy skepticism. Vendor sales reps will emphasize urgency (“time is running out!”) – balance that by doing your due diligence. It’s okay to push back and say you’re evaluating all options.
- Consider Third-Party Support or Hybrid Approaches: If the economics of SAP’s offerings don’t pan out for you, don’t overlook third-party maintenance or other bridges. For example, some customers may use a third-party provider to support ECC after 2027 (instead of SAP’s extended maintenance) if they plan to decommission those systems within a year or two. This is a less common route for SAP (due to integration and IP considerations). Still, it’s a potential cost-saver for certain situations – and at least a negotiation lever to mention.
- Negotiate Early and Holistically: When you open negotiations with SAP (ideally by 2026 for any 2027 changes, or earlier if you aim to sign a RISE deal), bundle all pending issues together. It’s often better to have one comprehensive negotiation covering your S/4 conversion, the transition option, digital access, and other related aspects, rather than piecemeal talks where you lose track of the overall give-and-take. In a holistic negotiation, you can trade concessions (e.g., committing to RISE in exchange for a bigger discount or an audit waiver).
- Secure Executive Alignment and Budget: Transitioning to S/4HANA or opting for the ECC transition period is not just an IT decision – it’s a business decision that will require funding and support. Ensure that the CFO and business unit leaders understand both the rationale (e.g., risk avoidance, future innovation) and the associated cost implications. Present the choices clearly: pay now or pay more later. Having leadership buy-in on the chosen path will make the execution (and negotiation with SAP) much smoother.
- Stay Vendor-Neutral in Mind: Throughout this process, maintain a mindset that prioritizes your organization’s interests. SAP will push for what benefits SAP. It’s your job to question, validate, and negotiate until the plan and contract make sense for you. Sometimes that means saying “no” to an offer and exploring alternatives. Often, demonstrating that resolve brings SAP back to the table with a better proposal. Remember, you are ultimately the customer – even a vendor as influential as SAP has to listen if you present a united, well-researched position.
Checklist: 5 Actions to Take Now
For ECC customers considering their next steps, here’s a quick-action checklist to get started:
- Audit Your SAP Landscape and Contracts: Make an inventory of all SAP systems (ECC and satellite products). Note their versions, any dependent components (such as compatibility packs) in use, and their current support end dates. Additionally, review your SAP contracts for clauses related to support and cloud conversions. This baseline indicates the urgency and extent of your situation.
- Assess Migration Readiness: Perform an S/4HANA readiness assessment. Identify gaps: custom code that requires adaptation, data that needs cleansing, and processes that lack an equivalent in S/4 (and thus may utilize compatibility packs). This will help determine whether a 2027/2030 migration is feasible or if you’re falling behind. Pay special attention to whether you’re on a HANA database or not – migrating to HANA is a prerequisite for both S/4 and the transition option.
- Evaluate Licensing and Usage Now: Run internal measurements for user licenses, indirect usage, and HANA database consumption. Reconcile these with your purchases. If you find under-licensing, decide whether to true up via DAAP or other license purchases proactively. If you find shelfware (unused licenses), note that for potential exchange or credit in a RISE deal. Having a clear license position is critical before engaging SAP in any future-state discussions.
- Engage Stakeholders and Consider Scenarios: Convene a cross-functional team (IT, procurement, finance, key business owners). Lay out scenario options: e.g., “Scenario A: Migrate all by 2028,” “Scenario B: Staggered migration + transition option for 2 systems,” “Scenario C: Full reliance on transition option to 2033,” etc. Discuss the pros/cons of each in terms of risk, cost, and business impact. Importantly, gather input from the business units – if one division absolutely cannot change systems by 2030, that’s a factor; if another is ready now, they may be able to go first to S/4. This alignment step ensures the decision isn’t made in a vacuum.
- Initiate Informal Discussions with SAP (or Advisors): Once you have an internal direction, have early conversations externally. You may consider engaging a third-party advisor or user group to obtain unbiased perspectives on what others are doing. And when ready, have a high-level meeting with your SAP account executive to inform them of your general plan (“We are evaluating RISE vs. staying on ECC longer”). Be careful not to commit to anything in these chats – the goal is to gather intel on SAP’s posture (e.g., what incentives might they offer? how flexible are they?) and to let them know you are a savvy customer weighing all options. This sets the stage for more formal negotiations down the road.
Following this checklist will put you in a proactive stance. By understanding your situation, aligning your team, and opening channels of communication, you’ll be prepared to either transition off ECC on your timeline or leverage SAP’s offerings to your advantage – rather than reacting late in the game.
FAQ
Q: Who is eligible for SAP’s ERP private edition, transition option?
A: This offering is geared towards existing SAP ECC customers with large, complex landscapes who need more time beyond 2027/2030 to move to S/4HANA. To qualify, you will need to sign up for a RISE with SAP (private cloud) contract (or a similar SAP cloud agreement) and migrate your ECC system to SAP’s cloud infrastructure by the end of 2030. Only certain products are covered – primarily core ECC (SAP Business Suite 7 components, such as ERP Central Component, and a few others that SAP will approve). Companies that can complete their S/4 migration by 2027 or 2030 are not target candidates and wouldn’t need this. Essentially, SAP is limiting the transition option to its largest customers who demonstrate a clear need and commitment (via a contract) to eventually move to S/4HANA. It’s not automatically available to every ECC user by default – you must meet the conditions and sign up for it.
Q: How does the transition option relate to SAP’s 2027, 2030, and 2033 support deadlines?
A: Think of it this way: 2027 is the end of mainstream maintenance for ECC (the date SAP initially set when it extended support from 2025). 2030 marks the absolute end of extended maintenance – meaning that if you pay the premium, SAP will support ECC until December 31, 2030. Without the transition option, after that date, you’re on your own (only custom or third-party support). The period from 2031 to 2033 now becomes an extended window only for those who opt for the transition option. Under that program, SAP will continue to provide patches and support from 2031 through December 31, 2033. So, effectively:
- Customers not taking any special actions must either be off ECC by 2027 (to remain fully supported) or pay for extended maintenance to extend their support to 2030.
- The transition option adds three more years (2031, 2032, 2033) of support beyond 2030, but only for those who migrate their ECC into the SAP private cloud environment as part of a RISE subscription.
By 2033, even the transition option stops – SAP is clear that this is not an indefinite extension of ECC. They expect any remaining ECC instances to be converted to S/4HANA by the time 2034 begins. In summary, 2027 and 2030 remain unchanged for the general SAP base; 2033 is a special new deadline for those opting into this subscription-based extension.
Q: What will the transition option cost compared to current support or RISE?
A: Substantially more, in most cases. While exact pricing will be customer-specific (and negotiable), SAP has indicated that the subscription fee for 2031–2033 under the transition option will be higher than a “comparable” S/4HANA cloud subscription before 2031. Essentially, you’re paying a premium for SAP to maintain older software. Also, factor in that to even get there, you likely will start a RISE contract by 2028–2030; during those earlier years, you might be paying a normal RISE subscription or at least incurring costs for moving your ECC to the cloud. In contrast, if you moved to S/4HANA via RISE outright, you’d be paying that subscription (perhaps at a lower rate) without the extra uplift. One way to look at it: current on-prem support is ~22% of your license value annually. The transition option will be a subscription that includes cloud infrastructure and support – it could equate to approximately 1.5 times or 2 times your current annual support (this is just an illustrative estimate; actual costs will vary). The key point: budget for a jump in run-rate costs in 2031–2033 if you take this path. Be sure to also budget for the migration effort to transition to SAP’s private cloud by 2030 (these services may incur an additional cost unless negotiated into the deal). On the flip side, SAP might offer incentives (credits, discounts) during initial RISE years to soften the blow, especially if you’re a strategic customer – so definitely negotiate. However, expect the transition option to cost more than simply “staying on ECC with maintenance,” as it essentially converts into a cloud service model, with SAP doing more (and charging more) to keep your legacy system running.
Q: Do we need to adopt SAP’s Digital Access (document licensing) model as part of this transition?
A: It’s not an official requirement to adopt Digital Access, but practically speaking, it’s highly recommended to resolve indirect licensing issues before or during your transition. Whether you move to RISE, stay on ECC longer, or eventually go to S/4HANA, indirect usage must be properly licensed. You have two main choices: stick with the traditional named-user approach (ensuring that any external system usage is covered by a named user or interface license), or switch to the Digital Access model (document-based). SAP’s clear preference (and auditing stance) is for customers to go with Digital Access. The Digital Access Adoption Program (DAAP) is a voluntary opportunity – not mandatory – but it’s the easiest way to sort out compliance on favorable terms. If you’re going into a new long-term SAP agreement (like a RISE contract for transition option or S/4), that’s an ideal time to also convert to Digital Access if it’s right for you, because you can potentially bundle it into the deal. However, if your analysis shows that staying with named users is cheaper and you’re confident you’re compliant, you can continue without Digital Access. Just be aware that SAP will likely scrutinize indirect use in audits. In a nutshell: No, you don’t have to adopt Digital Access, but you should make an informed decision on it. Many companies accept DAAP offers to avoid potential future audit issues – especially since transitioning to S/4 or the cloud may expose new integration use cases. Weigh the cost vs. risk, and decide if switching models now (with discounts) is better than potentially facing a compliance bill later.
Q: What are the risks of choosing the transition option path?
A: The transition option can mitigate certain risks (like running ECC unsupported), but it introduces others:
- Lock-In and Commitment Risk: By opting in, you’re effectively committing to SAP’s cloud and eventually to S/4HANA. Suppose some alternative or strategy emerges (say, a viable non-SAP solution or a merger that changes IT direction). In that case, you have less flexibility because you’ve signed a long-term deal with SAP.
- Cost Escalation: As noted, it’s pricey. There’s a risk that your organization will pay a lot more over those years, which could be seen as wasted if your S/4 migration still hasn’t happened by 2033. You must ensure you use those extra years productively. Otherwise, you’ve paid premium fees just to postpone the inevitable.
- Execution Risk: The plan requires you to move ECC onto HANA and into SAP’s cloud by 2030. That in itself is a project. Some companies might underestimate that effort – it’s essentially a technical migration (perhaps an OS/DB migration to HANA and re-hosting). If you fail to meet the prerequisites, you may forfeit the option and still end up unsupported. Therefore, there’s a risk associated with the execution of the migration step.
- Unsupported Components: Not all ECC-related products are covered till 2033. Some things remain end-of-life in 2030 (for example, if you use an old SAP CRM on the side or Business Warehouse on ECC, those may not be in scope). You may find that parts of your landscape are still unsupported while others are covered, which complicates your support situation.
- Audit/Compliance Tightening: SAP will be actively involved with you through the cloud contract, so expect less flexibility in compliance requirements. You may face true-ups for user counts or need to adhere to cloud metrics. There’s not necessarily more audit risk than normal, but being in a subscription means compliance is monitored continuously. There’s also no option to “skip paying and just run” as some might have done with on-prem (not paying maintenance and running unsupported). In the cloud model, if you don’t pay, you don’t run.
- Opportunity Cost: Those funds and resources spent to keep ECC running could have been used to modernize. By 2033, you might be functionally behind competitors who went to S/4 earlier and have been leveraging new capabilities (AI, analytics, etc.). So the risk is falling behind in innovation by stretching ECC’s life.
In summary, the transition option is a time-buying move – you must use that time wisely to justify the downsides. The risk of not doing so is ending up in 2033 having spent more money, with still-outdated systems, and no further extensions available. Mitigate that by having a clear S/4 migration plan tied to the option, strict internal milestones, and a solid contract that protects you as you go through this journey.
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