SAP’s S/4HANA Migration Challenge Enters Second Decade
More than a decade after SAP introduced its S/4HANA in-memory ERP system, the vast majority of legacy customers continue to face significant challenges building compelling business cases for migration, according to recent research. Sources indicate that 95 percent of existing users describe constructing a positive case for upgrading as requiring substantial effort or being genuinely challenging.
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Widespread Confusion Over SAP’s Evolving Policies
The survey of 455 technology leaders and business managers revealed deep uncertainty about SAP’s changing approach to software licensing and support. According to the report, 83 percent of respondents did not fully understand SAP’s latest migration policies and deadlines, while 84 percent expressed concern about how current messaging would impact their operations. This confusion comes amid what analysts suggest are aggressive support deadlines for the legacy ECC system that many organizations have invested years and millions customizing to their specific needs.
Mainstream support for ECC reportedly ends in 2027, with extended support concluding in 2030. Under special circumstances involving early commitment to cloud migration packages, users can potentially extend support until 2033. However, the research sponsored by enterprise application support provider Rimini Street found that 94 percent of respondents see significant value in extending their existing SAP systems rather than migrating under current conditions.
Strategic Planning Complications and Alternative Paths
The report states that SAP’s decisions to modify support deadlines, introduce new transition programs, and rename products have contributed to user uncertainty and complicated strategic planning. This environment is reportedly encouraging organizations to explore alternative approaches to meeting their enterprise resource planning needs rather than following SAP’s prescribed migration path.
Dale Vile, distinguished analyst at Freeform Dynamics, noted that SAP customers are increasingly embracing the concept of open “composable” architecture, where users loosely couple third-party solutions to address their ERP requirements. “This business-led rather than supplier-led approach has been commonplace in other areas of information technology for a while as it pays dividends in terms of flexibility, control, and access to new innovations,” he explained.
Cloud Transition Creates Additional Complexity
While S/4HANA initially offered both on-premise and cloud computing deployment options, SAP now strongly favors a cloud SaaS model, stating that innovations including artificial intelligence will only be available through these deployments. This shift has created additional complications for organizations with significant existing investments in on-premise infrastructure.
Last month, DSAG, the SAP user group for Germany, Austria, and Switzerland, called for greater transparency in cloud licensing to facilitate migration of on-premise systems to the cloud. This request followed SAP’s replacement of its RISE with SAP product package with SAP Cloud ERP Private, which uses a new Full-Use-Equivalent metric for pricing that differs from licensing in other cloud and on-premise deployments.
Migration Involves Fundamental Business Transformation
The transition from ECC to S/4HANA represents more than a simple technology upgrade, according to industry experts. SAP recommends that users eliminate customizations built into their legacy software and either adopt new business processes or rebuild software within SAP’s cloud platform. This requirement for fundamental business process transformation contributes significantly to the challenge of building compelling migration business cases.
Recent analysis from Gartner found that 61 percent of SAP customers using the legacy ECC platform had yet to license S/4HANA software. This slow adoption rate persists despite SAP providing core business applications for some of the world’s largest corporations, particularly in Europe where industrial giants including Volkswagen Group, Siemens, and Airbus rely on SAP systems.
Approximately 35,000 organizations continue to use ECC globally, including many of the world’s largest industrial groups. As these enterprises evaluate their options, many are monitoring industry developments and market trends that might influence their strategic technology decisions. The ongoing challenges with quantum computing sector innovation and other related innovations across the technology landscape are providing additional context for these complex migration decisions.
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SAP has stated its commitment to guiding customers toward “integrated, cloud-powered operational excellence,” describing its SAP Cloud ERP Private Edition as “a gateway to a future of limitless potential and unprecedented business agility.” However, the ongoing challenges in migration business case development suggest that convincing the company’s extensive legacy customer base may require more than visionary language as the 2027 mainstream support deadline approaches.
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