Breaking news! SAP has announced an extension to its 2025 end-of-support deadline.

This news hasn’t come as much of a surprise to customers or the wider ERP market (many have been refusing to comment on the elephant in the room); though for organisations struggling with large-scale migrations, it probably came as a relief.

We certainly weren’t surprised, given that SAP already has a history of breaking its own deadlines. Since 2010, when SAP HANA was first released, SAP has established and then rearranged end-of-support deadlines for 2017, 2019 and 2025 – all because of mounting customer pressure and lack of confidence in S/4HANA.

In 2017, SAP stated that it would end support for Oracle products hosted within the SAP environment. In 2019, it claimed that many of its own products would be left unsupported. Both SAP support deadlines were eventually combined into one 2025 cut-off point, and that was the ultimatum as we knew it.

Until now.

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What are SAP’s newest terms?

According to the information on SAP’s news website, the latest terms to the (latest) SAP support deadline are these:

• SAP is committed to providing maintenance for S/4HANA, through to 2040
• The original 2025 deadline has been extended to 2027, affecting the support and maintenance for:
  • ERP 6.0
  • Customer Relationship Management 7.0
  • Supply Chain Management 7.0
  • Supplier Relationship Management 7.0 applications
  • Business Suite powered by SAP HANA
• Beyond the 2027 deadline, any customers still in the transition period can purchase extended maintenance through to the end of 2030, at a premium of two percent above SAP’s current support costs of 22%.
• Any customers who don’t transition over to S/4HANA at all “will automatically be transferred to the customer-specific maintenance model.”

Why has SAP extended the deadline?

Until this latest update, SAP has been suspiciously quiet on what would happen to customers who refused to move onto S/4HANA, besides describing it as the “less attractive option.”

Now, customers on ERP 6.0 and Business Suite 7 have a clearer understanding of their options and their consequences, should they decide to stick to what they’ve got.

SAP’s informative update is certainly a welcome change; but why has it decided to move the deadline once again?

The elephant in the room:
SAP customers have been reluctant to move

It has been researched and documented that current SAP customers have been reluctant to make the move over to S/4HANA. In a December 2019 survey of 467 user organisations, 58% had no intention of moving across in the next two years. Also, 27% wouldn’t upgrade in the next three.

But SAP and various media outlets have been reluctant to share or comment on this information (more info on this here) preferring instead to push on ahead with the deadline and their marketing messages.

The prevailing shared strategy between IT leaders has clearly been the “wait and see” strategy. These customers could then wait and see what happened to other organisations who did make the change, and whether SAP released further information and/or extended the deadline.

(Those who did wait and see are probably feeling quite pleased with themselves right about now.)

So why are SAP’s customers hesitant to move to S/4HANA?

• Business and process disruption:
  A migration over to S/4HANA will typically require an organisation to move onto a new system entirely. This is a reimplementation, not just another upgrade. Making the change would cause a rewrite of existing processes and user familiarity, and it would also likely create a need for retraining – and possibly increasing – IT departments.
• Poor support for existing customisations:
  The reimplementation of S/4HANA would mean that if you host on-premise, any integrations and customisations you’ve developed would have to be reviewed and adjusted on the new system. And if you’re implementing S/4HANA hosted on SAP Cloud, your options to customise are severely limited, as customers are not provided direct access to the ABAP repository in SAP S/4HANA Cloud.
• Time:
  The move to S/4HANA isn’t just disruptive to business flow; it’s likely to be disruptive for a long time. The reimplementation time frame will vary, depending on the size of your company, but SAP has previously estimated 12-18 months, minimum. The very fact that the deadline has been extended again gives us an idea of just how long the process can potentially take.
• Value:
  Switching to S/4HANA would be both expensive and highly risky. The need to completely redo business processes and replicate functionality in ECC with the equivalent S/4HANA functionality, does not present much in the way of business value nor return on investment.
• Lack of use cases:
  SAP customers are reluctant to move across to the immature S/4HANA system, as there aren’t enough examples of other organisations doing so successfully to then act as a use case. (the organisation has been caught in a vicious cycle here. Its customers don’t want to move across as there aren’t enough use cases, so customers won’t move, which means fewer use cases – and so on.)

These perfectly valid reasons demonstrate that most organisations just aren’t ready to move

SAP’s co-CEO Christian Klein has received feedback that although enterprises were keen to move across to S/4HANA, larger organisations especially wouldn’t be ready for 2025.

SAP is probably more interested in the number of organisations moving across, and less the size of the organisations themselves. However, SAP seems to have taken this information onboard.

What does the extension mean for you?

Put simply: not much. If you’ve already migrated to S/4HANA or you’re in mid-transition, then the choice has been made.

The remaining SAP customers who haven’t moved to S/4HANA yet, are currently in the same position they were in two years ago. They have seven years left to go before the deadline. And if they had no plans to move until now, is a two-year extension really going to change their minds?

SAP extending its 2025 deadline to 2027 will likely cause many CIOs to breathe a sigh of relief. Beware that this isn’t the time to just forget about SAP for another few years! We still do not think S4/HANA is a worthwhile upgrade for many organisations. We still think that organisations are paying over the odds for their SAP Support.

Ken Metcalfe, Technology and Innovation Manager at Support Revolution

What are your options?

SAP still opted to extend the deadline rather than abandon it entirely; so regardless of when support ends for its legacy products, it seems SAP is set on it happening eventually. The problem hasn’t gone away. You now have two more years to make a decision as to what your organisation should do next.

A 2025 or a 2027 deadline; either way, there’s never a bad time to explore your options when it comes to ERP upgrades. Should you make the upgrade, wait and see, or switch to third-party support?

We cover these options and more in the guide below. This should help you and your organisation make the choice that’s right for you.