Switching to Third-Party Support for SAP: Pros and Cons for Your SAP Environment
Executive Summary:
CIOs and CTOs are increasingly evaluating third-party support for SAP ERP (ECC and S/4HANA) as a means to reduce costs and increase flexibility.
Third-party support providers, such as Rimini Street, offer to maintain SAP systems at roughly half the cost of SAP’s support, allowing enterprises to extend the life of their stable ERP environments.
However, switching support comes with trade-offs, including the loss of official SAP upgrades and potential legal and contractual considerations, that technology leaders must weigh against the substantial savings and personalized service benefits.
Why Third-Party SAP Support Is Gaining Attention
SAP’s customers are under pressure from rising maintenance costs and looming deadlines.
SAP Enterprise Support fees typically run at 18–22% of the license value per year, and SAP has recently instituted annual increases (e.g., +3.3% in 2023, +5% in 2024) after a decade of flat rates.
For a large enterprise with $10 million in SAP licenses, that means paying around $2.2 million annually – a figure that can increase each year due to inflation indexing.
Furthermore, SAP ERP Central Component (SAP ECC) is approaching the end of mainstream maintenance in 2027 (extended support is available until 2030 for an additional premium), creating a “forced upgrade” timeline for customers to migrate to SAP S/4HANA or face unsupported systems.
These factors have CIOs exploring alternatives. Third-party support providers (also known as independent support) have emerged to maintain SAP systems outside of SAP’s support contracts.
Companies like Rimini Street and Spinnaker Support promise to keep existing SAP environments running smoothly beyond SAP’s support deadlines and at significantly lower cost.
As over half of SAP’s ERP clients still run ECC on-premises (with many undecided on S/4HANA), interest in third-party support has grown.
The goal is to save money and buy time for an eventual migration – or even avoid an expensive upgrade altogether – without compromising day-to-day ERP operations.
Read Case Study: Saving $8M on SAP Support with License Optimization and Third-Party Maintenance.
Cost Savings and Value Proposition
The primary appeal of third-party support is cost reduction. Independent support vendors typically charge 50% or less of SAP’s annual maintenance fee. In practice, organizations achieve immediate savings of millions of dollars.
For example, an enterprise paying $2 million per year to SAP could negotiate a third-party support contract for around $1 million, resulting in a $1 million annual savings (50%).
Over 5 years, that’s $5M back to the IT budget. Some providers even claim total maintenance savings of up to 90% when factoring in the avoidance of upgrade projects and extended hardware life. However, a 50% reduction in support fees is the more common benchmark.
Pricing Example (Illustrative) – Assume $10M in SAP licenses (ECC or S/4HANA on-premises):
| Support Option | Annual Support Cost (est.) | 5-Year Cost (est.) | Key Notes |
|---|---|---|---|
| SAP Enterprise Support (22%) | ~$2.2M (plus inflation) | ~$12M (with annual increases) | Full vendor support, includes upgrades and patches. Recent policy adds 3–5% yearly fee hikes. |
| Third-Party Support (via independent provider) | ~$1.1M (roughly 50% of SAP fee) | ~$5.5M (often fixed rate) | Significant savings, multi-year fixed contracts common (no annual increase). No access to new SAP versions/patches from vendor. |
Beyond lower fees, third-party contracts often lock in rates for 3–5 years with no escalation, providing budget predictability. SAP’s own support, by contrast, can increase and typically auto-renews annually unless notice is given.
The cost advantage of third-party support is not just theoretical – many Fortune 500 firms have publicly reported saving tens of millions of dollars over several years by switching.
Those freed funds can be reallocated to innovation: CIOs use the savings to fund digital projects, cloud initiatives, or analytics efforts that drive business value rather than just “keeping the lights on.”
Service Quality and Scope of Support
Cost aside, third-party support providers differentiate themselves with a more personalized support experience.
Enterprises often complain that with SAP support, they are one of thousands of customers: responses can be slow, and support tickets may result in “please apply Note XYZ” or advice to upgrade rather than a tailored solution.
In contrast, third-party providers assign dedicated engineers to each account who become familiar with the client’s SAP landscape.
Support SLAs are competitive – some providers tout 24/7 availability and even five-minute response times for critical issues – and prioritize problem resolution over bureaucratic processes.
Crucially, third-party support covers areas SAP typically does not. For instance, custom code and customizations are the backbone of many SAP environments, yet SAP’s standard policy is that customizations are the customer’s responsibility.
A third-party support contract usually includes support for custom ABAP code, interfaces, and customizations as part of the service.
This means that when a bespoke program or integration breaks, the third-party team will help troubleshoot and fix it, filling a gap that often forces companies to hire external consultants when they are on SAP support.
Additionally, independent providers often support older versions far beyond SAP’s end-of-life dates.
If you run a stable SAP ECC 6.0 system or an early S/4HANA release, a vendor like Rimini Street will continue to provide patches, tax and regulatory updates (for payroll, VAT changes, etc.), and technical support for as many years as you need.
This “extended lifespan” support is valuable for organizations that are not ready to migrate or those that only require basic system upkeep without new features.
Clients also report that third-party vendors proactively share optimization tips and respond more quickly, as support is their core business (not selling new licenses).
Companies not buying new SAP licenses are sometimes treated as low priority (“dormant” accounts) by SAP, whereas they become high priority for an independent support firm.
Read Reducing SAP Footprint for ECC: Unused Licenses and Legacy System Retirement.
Risks and Drawbacks to Consider
Switching to third-party support is not without trade-offs and risks, and these must be weighed carefully:
- No Access to New Software Updates: When you leave SAP’s support, you lose the right to apply new official patches, upgrades, and versions. Your system will be frozen on its current version. For SAP ECC, this may be acceptable (many consider ECC functionally complete for their needs). However, for S/4HANA, which evolves with quarterly updates, this means forgoing new features and improvements. Third-party providers do offer workarounds and some fixes (and will support your current software indefinitely), but you won’t receive SAP’s latest enhancements. This can potentially put you at a disadvantage in terms of innovation if your business values cutting-edge SAP functionality.
- Future Upgrade Complexity: If you plan to eventually migrate to S/4HANA or another SAP product, being off SAP maintenance can introduce hurdles. SAP typically requires customers to be in good standing on support to execute version upgrades or to convert legacy licenses to S/4HANA licenses. If you’re not on support, you may face back-maintenance fees or re-licensing costs to get current again. In some cases, companies treat the move to third-party support as a one-way step, only to switch to a completely new platform. But if there’s a chance you’ll want to return to SAP’s fold for an upgrade, be sure to factor in contractual implications (e.g., SAP may charge a reinstatement penalty or disallow license conversion offers).
- Legal and Compliance Considerations: Third-party support for SAP is legal – if you own a perpetual license, you have the right to self-support or hire another firm. However, the industry has seen high-profile lawsuits (Oracle vs. Rimini Street being the most famous) over how third-party providers obtain updates and use intellectual property. SAP itself has strict terms in its support agreements. While reputable providers now operate within the bounds of the law, due diligence remains essential. Engage your legal team to review your SAP license agreement for any restrictions (in general, SAP contracts do not ban third-party support explicitly, but you must not use SAP intellectual property improperly). Ensure any provider you choose follows legal methods for delivering fixes (for example, not distributing SAP’s proprietary code unlawfully). In short, the risk is low for customers if everything is done above board; however, awareness is still important.
- Loss of SAP Direct Support and Ecosystem: This is obvious but worth reiterating – once off SAP support, you cannot log support tickets with SAP, and you won’t receive direct SAP guidance on issues. You’ll rely entirely on the third party’s expertise. Capable third-party engineers can handle most day-to-day issues, but if there’s a deeply complex product bug, you can’t escalate to SAP’s development teams. Additionally, your company may have less influence in SAP user groups or customer councils, as you’re not a paying maintenance customer. Some CIOs mitigate this by maintaining relationships through user groups (like ASUG/SUGEN) and by purchasing new SAP products if needed on separate contracts. But recognize that you are effectively decoupling from SAP’s official support ecosystem.
- Potential Internal Resistance: It’s not just SAP that may push back (expect SAP to try hard to retain your support dollars); internal stakeholders, such as your SAP project teams or executives, might also have concerns. Fears about “unsupported systems,” worries that auditors or regulators might frown on third-party support, or simply inertia, can all pose challenges. CIOs should be prepared with a solid business case and references from peer companies to reassure stakeholders that this path, although unconventional, is a proven option among Fortune 500 companies. Effective change management is essential to ensure that your IT team and users understand how to effectively engage with the new support provider.
In summary, the downsides primarily involve losing access to SAP’s updates and official support.
For a company that heavily relies on SAP’s latest technology (e.g., cutting-edge S/4HANA capabilities, cloud integrations available only via SAP), third-party support could slow down the pace of innovation.
But for many running mature SAP environments, these trade-offs are manageable compared to the cost savings.
ECC vs. S/4HANA: Strategic Timing and Roadmap Implications
Your decision may hinge on where you stand in the SAP product lifecycle:
- SAP ECC (Business Suite 7): Organizations still on ECC 6.0 are the primary candidates for third-party support. ECC is a stable, proven platform that SAP is phasing out. If you’re not ready or willing to move to S/4HANA by 2027, third-party support can extend the life of ECC well into the 2030s. Rimini Street has pledged to support ECC until 2040, which is well beyond the scheduled end of SAP’s support. CIOs can thus buy an extra decade of usage, avoiding costly migration or extended SAP support fees (+2% premium for 2028–2030) in the interim. Many ECC customers fall into this category: they see the migration to S/4 as high-cost and high-risk, so holding steady on ECC with external support while formulating a modernization strategy can be very attractive.
- SAP S/4HANA: If you’ve already migrated to S/4HANA (or are planning to soon), the calculus changes. S/4HANA is SAP’s future-facing ERP with new updates and features released regularly (and support promised through at least 2040 by SAP). Third-party support for S/4HANA is technically available (providers will support any S/4HANA version you run), but the value proposition is different. Since S/4 is still evolving, most enterprises on S/4HANA want to stay current on upgrades – something only SAP support enables. However, there are scenarios where even S/4HANA customers might consider third-party support. For example, if you are on an older S/4 release and do not plan to continuously upgrade, or if you run a hybrid landscape where core ERP is stable but you add innovation via side systems. In such cases, an independent support provider could maintain your S/4 system (at a lower cost) while you innovate in a “composable” architecture around it. Generally, though, adoption of third-party support among S/4HANA users is currently low. CIOs should carefully weigh if saving maintenance dollars on S/4 is worth pausing the uptake of new SAP capabilities.
- Surround Strategy vs. Full Migration: Third-party support can be a tactical move to delay or avoid a major migration. Some enterprises use it to create a “bridge” – e.g., moving ECC to third-party support for 3-5 years, during which they invest the savings into front-end innovation or cloud projects, and then possibly revisit an ERP upgrade later. Others may decide to keep their core ERP as-is and pursue a “surround strategy” (adding cloud apps, RPA, AI, etc., around the edges of ECC) to meet business needs without moving to S/4 at all. This ties into a larger strategic question: Do you view S/4HANA as an essential next step for innovation, or can your business continue to thrive on a well-supported legacy system augmented by new tech? The answer will differ by company. As a technology leader, ensure that if you choose third-party support, it aligns with your 5-10 year IT roadmap – whether that roadmap includes S/4HANA down the line or an entirely different direction.
Planning the Switch: Contracts and Vendor Selection
Switching to third-party support for SAP is a significant decision that requires careful planning and execution.
Here are key considerations for CIOs/CTOs in the transition process:
- Contract Review and Timing: SAP support agreements auto-renew annually (often on January 1) and typically require 90 days’ notice before the end of the term to cancel. For many, that means by September 30. Mark your calendar and involve procurement early. Missing the notice window could lock you into another year of fees. Review your entitlements – if you have unused SAP licenses (“shelfware”), consider terminating them to avoid unnecessary support costs. Understand that SAP generally has an all-or-nothing policy on maintenance: you can’t drop support on only part of your license portfolio unless you terminate those licenses. Plan the scope of what you will move off of SAP maintenance.
- Select a Reputable Provider: The third-party support market for SAP is dominated by a few established players. Rimini Street (operating since 2005) is the largest and supports thousands of SAP and Oracle customers globally. Spinnaker Support is another well-known firm with a solid track record. There are regional providers as well. Evaluate providers on experience, client references (preferably in your industry), global coverage, and service offerings. Important factors include whether they handle necessary regulatory updates for your SAP modules (e.g., HR/payroll compliance changes), their security practices, and guaranteed response and resolution times. It’s wise to issue an RFP or, at the very least, have detailed discussions with multiple vendors to compare their offerings. Many customers have found that just exploring third-party support can even strengthen their negotiating position with SAP for better terms, but only if you’re willing to make the switch.
- Negotiation and Transition Planning: Once you have chosen a provider, negotiate a clear and comprehensive contract that outlines all the details. Ensure the scope encompasses all critical systems and modules required, and clarify the handover process. Typically, you’ll schedule the cutover to third-party support the day after your SAP contract expires. Expect to download and archive any final SAP support notes or patches you are entitled to while still under SAP support – you should apply any last critical patches just before your support ends, as afterwards SAP’s support portal will be inaccessible. The third-party provider will usually assist with this onboarding step (some offer tools or guidance to harvest any remaining updates you have rights to). Also, work out how they will interface with your team (e.g., ticketing system, named contacts, etc.). Develop an internal communication plan so your IT staff and end-users know that after a certain date, “call the new support hotline” instead of SAP. A smooth transition requires aligning your internal help desk and procedures with the new support model.
- Licensing and Future Flexibility: Keep records of your SAP license status. You typically retain a perpetual right to use the software even after ending maintenance, but you won’t get new licenses or upgrades. If there’s a chance you might re-engage with SAP in the future (for an upgrade or additional products), discuss this with your SAP account representatives beforehand – sometimes they offer bridge arrangements or will outline the process to reinstate support (often at a premium). Knowing this upfront can influence how you structure the third-party support term (e.g., maybe a 3-year stint off support, then reevaluate). Be aware that while on third-party support, you can still purchase other SAP products separately if needed (some companies continue to buy new SAP cloud services while having legacy systems on independent support). This hybrid approach can be part of a long-term strategy.
In short, due diligence in contracting and a well-managed cutover are essential.
With proper planning, many enterprises have successfully transitioned to third-party support, experiencing minimal disruption and quickly reaping the financial benefits.
Recommendations
- Align with Your Strategy: Decide based on your IT roadmap. If your organization plans to stay on SAP ECC for several more years or is delaying the implementation of S/4HANA, third-party support can be a strategic fit. If you need the latest SAP innovations on an annual basis, sticking with SAP support might be a safer option.
- Build a Business Case: Calculate the multi-year ROI. Tally how much you’ll save over 3–5 years on support fees and avoided upgrades. Weigh this against any costs (transition effort, potential rejoining fees later). A solid financial case will help get executive buy-in.
- Review License Agreements: Understand Your Contractual Obligations. Check your SAP contract for renewal and notice terms. Ensure you have perpetual licenses. Engage legal counsel to confirm you can switch support without breaching any terms.
- Time Your Exit Carefully: Avoid auto-renewal traps. Plan to notify SAP of support termination at least 90 days before the end of your maintenance period. Coordinate this with the start date of your third-party contract for a seamless handover.
- Choose Providers Wisely: Vet the third-party vendor thoroughly. Look for providers with a proven track record in SAP support, global 24/7 coverage, and expertise in your SAP products (ECC, S/4, industry solutions). Speak to reference clients about their experience.
- Negotiate Service Scope: Ensure critical needs are covered. Require support for custom code, integration issues, and regulatory updates in the contract. Also, clarify SLAs (response and resolution times) and any additional services (like advisory or technical account management).
- Prepare for Transition: Get Your Team Ready. Before discontinuing SAP support, download any final patches and knowledge articles to which you’re entitled. Train your internal help desk on new support processes and communicate to all stakeholders how to engage the new support partner.
- Mitigate Security Risks: Stay current with security updates. Without SAP’s patches, coordinate with your third-party provider on how they handle security vulnerability fixes. They often develop their own fixes or mitigation steps. Ensure this is part of the service to maintain your system’s security and compliance.
- Keep SAP in the Loop (Strategically): Maintain an open door. Even if you leave SAP support, continue to stay in dialogue with SAP about your future needs. You may buy new licenses or cloud services from SAP while on third-party support for core systems. A professional relationship can ease any future interactions if you choose to return to SAP’s fold or negotiate a migration.
- Monitor and Reevaluate: Continuously assess value. Treat third-party support as one element of your strategy. Monitor the provider’s performance and the business impact. Reevaluate after a couple of years – are the cost savings and service levels meeting expectations? This will help determine whether you continue with the provider, expand their scope, or consider alternative approaches.
FAQ
Q1: Can we still upgrade to S/4HANA in the future if we leave SAP support now?
A: Yes, it’s possible, but it may require extra effort. You retain the right to use your SAP software; however, without SAP maintenance, you won’t receive automated conversion or upgrade paths. If, in a few years, you decide to migrate to S/4HANA, you may have to pay SAP back-maintenance or purchase new S/4 licenses outright. Many companies on a third-party support plan intend to eventually move to S/4 or another cloud ERP – they simply delay it until it makes better business sense. The key is to save money now and set those savings aside for a future upgrade if that’s in your roadmap. Before canceling SAP support, discuss potential reinstatement terms with SAP so you’re aware of the costs associated with upgrading later. With good planning, third-party support can be a bridge to a future S/4HANA migration on your own timeline.
Q2: Is using a third-party support provider legal and compliant with SAP contracts?
A: If you own a perpetual license to SAP software, you are generally allowed to use whoever you want to support that software. There is no clause that forces you to buy support only from SAP. Third-party support is a legitimate and legal option – this has been upheld in court cases as well (the courts have confirmed the concept is legal, though they cautioned providers to respect intellectual property). The main compliance step is to stop downloading or using SAP’s support materials once you leave their support (since you won’t have the right to new patches). Reputable providers have processes to operate legally. It’s wise to have your legal team review everything, but thousands of SAP customers globally have switched to independent support without license violations. Just ensure you don’t try to “mix and match” by taking new SAP patches while not paying for support – pick one route or the other.
Q3: How much money can we save by switching to third-party support for SAP?
A: Companies typically save 50% of their annual SAP support fees immediately. For many, that’s hundreds of thousands to millions of dollars per year. Over several years, this adds up significantly – e.g. $5M+ saved over five years on a large SAP estate. Beyond the direct reduction in maintenance fees, there are also indirect savings. You won’t be forced into expensive upgrades or hardware refreshes just to stay supported, which can save project costs. Some organizations have reported saving 70–90% in total maintenance costs when they include these avoided expenditures. However, results vary – if you eventually need to re-license or upgrade, that will incur costs down the road. The bottom line: expect to cut support OPEX in half and gain budget flexibility in the near term. These savings can be redirected to higher-value initiatives, which is often the main justification CIOs use to green-light the move.
Q4: Will our system continue to receive critical fixes and updates, including security patches, if we opt for third-party support?
A: You will not receive official SAP patches once the system is taken out of maintenance; however, third-party providers develop their own fixes and workarounds for many issues. For known bugs in the software, they often already have a fix or can engineer one. For security vulnerabilities, leading third-party firms have dedicated security teams that monitor threats and provide mitigation instructions or custom patches when needed. They also handle regulatory updates (tax and legal changes) by delivering updated configurations or code, ensuring you stay compliant. It’s important to discuss this with any provider – ask how they handle security updates and what their track record is. In practice, companies with third-party support have continued to run their systems securely. The providers stake their reputation on keeping your ERP stable and safe. That said, you should maintain good IT security hygiene (access controls, network security) as always, because you won’t have SAP automatically pushing patches to you. Ensure that security coverage is explicitly included in the support agreement with the third party.
Q5: What happens if we have a problem that the third-party provider cannot solve?
A: Third-party support firms employ highly experienced SAP engineers, many of whom have come from SAP or possess decades of hands-on expertise. They resolve the vast majority of issues in-house. In rare cases where an extremely deep product defect is present, the provider will work on a workaround or even create a custom code fix. Remember, as the owner of the software license, you also have the option to engage external SAP consultants or contact SAP on a pay-per-incident basis, should the need arise (although this is uncommon and can be costly). Some customers keep a small contingency fund from their savings, just in case they need outside help for an unforeseen issue, but this is rarely tapped. Essentially, when you leave SAP support, you are trading dependence on SAP for dependence on a new partner, so choosing a high-quality provider is crucial. Verify their escalation procedures and, if unsure, start with a non-mission-critical system. In practice, enterprises that use third-party support report higher resolution rates and often have better support experiences than they did with SAP. Just make sure to have a clear escape plan – for example, a clause that lets you exit the contract if service levels are not met – to keep the provider accountable.
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