Contents
Key takeawaysWhen you have most roomWhat we have seenWhat SAP offersTesting against year threeCredits to ask forAccount team linesProtecting the priceWhat to do nextFAQYour room to negotiate an S/4HANA migration peaks before you commit to a platform and a date. Fix the user count, model the year three run rate without credits, and negotiate conversion and licenses as one deal.
- Timing. Your negotiating power peaks before the platform and the timeline are committed.
- Credits. Migration credits flatter year one and rarely lower the steady state.
- One deal. Negotiate the conversion, the user count and the renewal terms together, so SAP cannot trade one against another.
- Count first. An independent FUE count built from usage data shifts price more than the headline discount does.
- Deadline. The 2027 ECC maintenance deadline is SAP's pressure point, and extended maintenance to the end of 2030 gives you room to plan early.
- Uplift cap. A renewal uplift cap protects the discount after the migration completes, and SAP's first draft often omits it.
An S/4HANA migration is a platform decision and a commercial decision made at the same time. Many companies run them as separate projects. The program team picks the path and the go live date, and procurement receives a quote afterward, when SAP already knows the date, the scope and that you have to sign.
Run the two as one negotiation and the timeline works for you. Run them apart and the conversion program sets the price. I worked at SAP, Oracle and IBM before we started Redress, and what follows is the advice I give buyers facing this decision.
When do you have the most negotiating power in an S/4HANA migration?
You have the most room before you commit to S/4HANA and fix the timeline. Once the program is funded and the ECC exit date is set, SAP knows you have to move, and the room to change price and terms shrinks quickly.
Why start two years before the ECC exit?
Two years gives you time to count users from real usage, build a working alternative and let SAP's quarter ends come to you. A company that starts six months out hands all of that away. In our deals the early starters did measurably better, as the figures in the next section show.
| Before signature | What should be done |
|---|---|
| 24 months | Migration plan started. USMM and LAW results pulled, and the full contract and entitlement listing requested from SAP. |
| 18 months | Independent FUE count built from usage data. An alternative chosen, with a named owner and a budget. |
| 12 months | Five year cost modeled with all credits removed. Component pricing requested behind every bundle. |
| 6 months | Conversion, user count and renewal terms negotiated together, with the contract terms drafted in your wording. |
| 3 months | Close timed to an SAP quarter end, with one further quarter held in reserve. |
What makes an alternative credible to SAP?
A real evaluation, even a partial one, changes SAP's discount ceiling. It can mean staying on ECC under extended or third party support, moving one line of business to another vendor, or pricing public edition against private edition. An evaluation with a budget and an owner shifts the deal more than any argument made in the meeting room.
How much does the 2027 deadline actually constrain you?
It constrains you less than the sales pitch suggests, because SAP itself sells support beyond it. The 2027 mainstream maintenance deadline is real, and it pressures late movers. It is also the date SAP's account team builds its closing plan around, so never negotiate under it. SAP has published these terms for ECC and the rest of Business Suite 7:
- Mainstream maintenance. Ends at the end of 2027 for the Business Suite 7 core applications, including ECC 6.0 on its latest three enhancement packages.
- Extended maintenance. Available from 2028 to the end of 2030, for a premium of two percentage points on the maintenance basis.
- Customer specific maintenance. Applies if you skip extended maintenance or once it ends. Support continues in a reduced form, without new legal change packages.
- ERP private edition transition option. For large systems moved to SAP ERP, private edition before December 31, 2030, SAP offers continuity from 2031 to 2033 on SAP HANA, only with its max success plan and at a price that depends on when you commit.
Price the extended maintenance premium before your first commercial meeting. Three more years of known cost is often cheaper than signing a migration deal on SAP's schedule.
S/4HANA Negotiations: The Discount Is Dead. The Tier Is the Deal.
What have we seen in recent S/4HANA migration negotiations?
Prepared buyers close well below the first quote. Our engagement file for 2024 and 2025 holds 38 S/4HANA migration negotiations, and the ranges below describe that group of roughly 30 to 40 deals. Where the buyer negotiated conversion and licenses together, the gap from first quote to signature averaged 25 to 40 percent, and the best case reached 40 percent.
Three patterns came up again and again:
- Early starters did better. Buyers who began two years before their ECC exit captured 10 to 20 points more discount than those who started late.
- Credits hid the run rate. Migration credits masked a year three run rate 20 to 35 percent above year one.
- The cap was missing. SAP's first contract draft had no renewal uplift cap in roughly 7 of 10 deals.
The table ranks what shifted the price in those negotiations. The two largest items sit with the buyer, and neither depends on how hard SAP is pushed in the room.
| Factor | Typical swing | Who controls it |
|---|---|---|
| FUE count remap | 18 to 30 percent | Buyer, with usage data |
| Early timing | 10 to 20 percent | Buyer, with planning |
| Headline discount | 10 to 22 percent | SAP, under pressure |
| Renewal uplift cap | Protects the rows above | Buyer, at drafting |
| Milestone credits | Real year one value | Buyer, at drafting |
The last two rows carry no percentage of their own. The cap protects everything above it once the first term ends, and milestone credits only deliver their year one value if the milestones are written into the contract.
SAP RISE Negotiation Guide
Pricing benchmarks, FUE sizing checks and the contract clauses we ask for in RISE and S/4HANA migration deals.
Get the white paper →What does SAP offer in an S/4HANA migration deal?
SAP usually brings migration credits, conversion programs and bundled RISE infrastructure. Each one makes year one look better and none lowers the steady state on its own, so read every item against year three instead of the launch year.
Migration credits
Credits reduce what you pay in the launch year and leave the subscription base untouched. The RISE with SAP Migration and Modernization program, for example, offered credits against maintenance, cloud services or cloud subscriptions that SAP said could cut migration cost by up to 50 percent, for customers moving through the end of 2024.
Programs like this are time limited, so ask what is on offer in the quarter you plan to sign. Our migration credit benchmarks show what current offers look like.
Bundled RISE
A RISE with SAP bundle wraps the S/4HANA subscription, hyperscaler infrastructure, technical managed services and a set of tools into one price per FUE tier. It is convenient. It does not lower cost by itself, and it hides what each part costs, so ask for the subscription, infrastructure and services priced as separate lines.
Conversion routes for on premises customers
If you stay on premises, SAP generally offers two routes. A product conversion keeps your ECC contract and exchanges licenses for their S/4HANA equivalents. A contract conversion credits existing license value toward a new S/4HANA contract.
The credit, which licenses count toward it, and the support base carried into the new contract are all open to negotiation. Our guide to S/4HANA conversions and migration credits covers both routes in detail.
How do you test a migration offer against year three?
Strip every credit out, fix the user count and compare the steady annual cost. Then add each credit back at the value its milestone actually delivers. The hypothetical below shows why the count usually matters more than the credit.
Say you run ECC with 1,500 Professional users, 3,000 Limited Professional users and 6,000 employees on self service. RISE counts Full Usage Equivalents (FUE): 1 FUE equals one advanced user, five core users or 30 self service users. Assume a price of $1,500 per FUE per year and a five year term.
| Line | SAP's first sizing | Usage based count |
|---|---|---|
| Advanced users | 1,500 users, 1,500 FUE | 1,100 users, 1,100 FUE |
| Core users | 3,000 users, 600 FUE | 3,400 users, 680 FUE |
| Self service users | 6,000 users, 200 FUE | 6,000 users, 200 FUE |
| Total FUE | 2,300 | 1,980 |
| Annual subscription | $3,450,000 | $2,970,000 |
| Year one credit | $600,000 | None assumed |
| Year one cost | $2,850,000 | $2,970,000 |
| Year three cost | $3,450,000 | $2,970,000 |
| Five year total | $16,650,000 | $14,850,000 |
The recount reclassifies 400 Professional users who only display and approve as core users. SAP's offer wins year one by $120,000, then costs $480,000 more every year, with year three 21 percent above year one. Over five years the credit is worth $600,000 and the recount $2,400,000, leaving the usage based count $1,800,000 ahead.
Where does the usage data come from?
USMM shows the license type assigned to each ECC user, and LAW consolidates those results across systems. Both show classification, often years out of date. What each person actually ran sits in the ST03N workload statistics; export them monthly, since detailed history is not kept for long. Our guide to FUE counting covers the mapping step by step.
Why we reject the advice to lock in credits early
The standard advice is to treat SAP's migration credits as proof of a strong deal and to sign fast before they lapse. We disagree. In migrations we have advised, generous year one credits routinely sat on top of an inflated user count and a renewal with no uplift cap, and the year three run rate erased the headline saving.
SAP gives credits freely because they cost it little and protect the base. Model the steady state without them, fix the count, then value each credit against its milestone. Treating the credit as the win, instead of the run rate, is the most common migration mistake we see.
What migration credits should you ask for?
Ask for credits that map to milestones, a transition period at a known rate, and a fee ramp that matches a phased go live. Refuse headline credits that expire unnoticed halfway through the program.
Conversion funding tied to delivery
Ask SAP to fund part of the conversion work and pay it against delivery milestones, such as the sandbox conversion, the first productive go live and the ECC shutdown. A lump sum at signature disappears into year one. Write in that if SAP or its partner causes a delay, the credit dates move with the milestone.
A phased ramp
Match the subscription ramp to the phased go live so you pay for capacity as you use it. If the first wave covers two of five regions, the opening FUE commitment should reflect those users, with the rest stepping in as each wave goes live.
A transition period at a known rate
During the migration you pay ECC support and the new subscription at the same time. Ask for a fixed transition period in which ECC support stays at its current rate, or is credited against the subscription, until the last ECC system is switched off.
What will SAP's account team say, and how should you reply?
Expect the same few lines in almost every migration deal. Each has a factual answer, and preparing it in advance keeps the conversation on your numbers.
- "The incentive expires at quarter end." Ask for the credit schedule in writing and value it against the five year cost. If the deal only works with the credit, the base price is the problem.
- "After 2027 you will be unsupported." Extended maintenance runs to the end of 2030 at a published premium of two points, and you have priced it.
- "Transition option pricing goes up if you wait." SAP published the scale. Commitments made by the end of 2025 move across in 2031 without uplift, 2026 signings carry a standard 20 percent uplift, and pricing for later commitments will only be set in 2028. First check whether you qualify, since SAP requires a system of at least 2 TB on SAP HANA, migration by the end of 2030 and its max success plan.
- "RISE is cheaper because infrastructure is included." Ask for infrastructure and managed services priced separately, and compare them with what you pay for hosting today.
- "The FUE count comes from your own system." It comes from license types assigned years ago. Present your usage based count and ask SAP to show, user by user, where it disagrees.
How do you protect the price after the migration completes?
You protect it with terms signed at the start, because the signature only sets the first price. Five terms decide whether the discount survives the first renewal, and SAP's first draft often leaves them out.
Renewal uplift cap
Lock the maximum annual increase and the maximum increase at renewal. Without a cap, the price resets toward SAP list terms when the first term ends. Our uplift cap benchmark shows what other buyers have secured.
User true up method
Define the measurement window, the user definitions and who classifies each user. A clear method beats an open ended recount run by SAP under its own rules.
Exit and data rights
Define the data export format, timing and assistance. RISE is a managed service, and a managed service without a clean exit clause is a lock in.
Digital access
Settle your digital access position and cap it at signature, so documents created by third party systems do not reopen the price in year three.
Growth price hold
Ask for additional FUE at the same net rate per FUE for the whole term. Without it, every user added after go live is priced at whatever SAP proposes that quarter, and the growth erodes the discount you won on the base.
The migration credit is the part of the deal SAP gives away gladly. The renewal uplift cap is the part that decides whether your saving survives.
What to do next
- Two years out. Start the migration plan two years before the ECC exit date.
- Count. Build an independent FUE count from real usage data.
- Model. Work out the year three run rate with every credit removed.
- Compete. Stand up a credible alternative so SAP prices against real competition.
- Combine. Negotiate conversion, licenses and renewal terms as one deal.
- Test the number. Run the SAP RISE TCO calculator against SAP's quote before you respond.
- Get help before the close. Engage independent SAP advisory before the commercial close.
Frequently asked questions
When is your negotiating position strongest in an S/4HANA migration?
Before the program budget is approved and the ECC exit date is fixed. Two signals tell SAP you are committed: board approval of the migration budget and the choice of a systems integrator. Negotiate the commercial terms before either becomes known to the account team, because afterward the room to change price and terms narrows fast.
What does SAP put on the table during a migration deal?
Usually migration credits, conversion programs and bundled RISE infrastructure. Ask for each item as a separate line with its own value, conditions and expiry date, so you can see what the deal costs once the credits are gone.
Should I negotiate the migration and the licenses together?
Yes. Put the conversion, the user count, the digital access position and the renewal terms in one negotiation. Handled separately, SAP can give ground on the items you watch while protecting the subscription base that sets your cost for the next decade.
How big a discount is realistic on a migration deal?
Well prepared buyers reach a 25 to 40 percent gap between the first quote and the signed deal. The result depends on a clean user count and a credible alternative far more than on company size, so a midsize buyer with good data can outperform a much larger one.
What migration credits should a buyer ask for?
Conversion funding, a fixed ECC support rate while old and new systems overlap, and a year one ramp that follows the phased go live. Every credit should name the milestone that releases it, so the value arrives when the work does instead of lapsing unnoticed.
How do I protect the price after the migration completes?
Sign a renewal uplift cap, a defined user true up method and a digital access cap before go live. These clauses outlast the people who negotiated them, so record the reasoning behind each one where the team handling the first renewal will find it.
Does the 2027 ECC deadline weaken my position?
It can, if you let it. Mainstream maintenance ends in 2027, but extended maintenance runs to the end of 2030 at a published premium. Starting two years out keeps the date from becoming SAP's closing argument, and a priced fallback gives you a real option to walk away.
Should I run a competitive alternative?
Yes, even a partial one. SAP's discount ceiling depends on what it believes you could actually do. A funded evaluation of third party support, another vendor for one line of business, or a different SAP edition changes the deal more than any argument made at the table.