SAP have extended their end-of-support deadline once more, from 2025 to 2027, and released more information on what’ll happen for customers who refuse to move. What does this new information mean for your organisation?
SAP extends support deadline to 2027
Breaking news! SAP have announced an extension to their 2025 end-of-support deadline.
This news hasn’t come as much as 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 have a history of breaking their own deadlines. Since 2010, when SAP HANA was first released, SAP have 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.
Specifically, in 2017, SAP stated that they’d end support for Oracle products hosted within the SAP environment; 2019, they claimed that many of their own products would be left unsupported. Both deadlines were eventually combined into one 2025 cut-off point, and that was the ultimatum as we knew it.
Need guidance on your ERP upgrade options?
Our latest whitepaper explains what the ERP upgrade cycle is, how to escape it, and what your options are.
What are SAP’s newest terms?
According to the information on SAP’s news website, the latest terms to their (latest) deadline are these:
- SAP are 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:
- SAP ERP 6.0
- SAP Customer Relationship Management 7.0
- SAP Supply Chain Management 7.0
- SAP Supplier Relationship Management 7.0 applications
- SAP 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 have SAP extended the deadline?
Until this latest update, SAP have 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 have they 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 intentions of moving across in the next two years. 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 attitude between IT leaders has clearly been to ‘wait-and-see’. 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 customer’s 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 – it is not just another upgrade. Making the change would cause a rewrite of existing processes and user familiarity, and 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.
The move to S/4HANA isn’t just disruptive to business flow; it’s likely to be disruptive for a long time. The reimplementation timeframe will vary, depending on the size of your company, but SAP have 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.
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 of 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. (SAP have been caught in a vicious cycle, here. SAP 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 are probably more interested in the number of organisations moving across, and less the size of the organisations themselves. But! SAP seem to have taken this information onboard.
What does the extension mean for you?
Put simply: not much. If your organisation has already migrated over to S/4HANA, or is currently in mid-transition, then the choice has already been made.
The remaining SAP customers, who haven’t moved to S/4HANA yet, are currently in the precise same position they were in, two years ago: with 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 their 2025 deadline to 2027 will likely cause many CIOs to breathe a sigh of relief, but 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, and 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 they end support for their legacy products, it seems SAP are set on it happening eventually. The problem hasn’t gone away, but you now have an additional two years to make a decision as to what your organisation should do next.
A 2025 or 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, switch to third-party support?
We cover these options and more, in order to help you and your organisation make the choice that’s right for you.