SAP’s New ERP Transition Offer: Key Impacts and Insights for Service Providers

SAP’s new subscription offer, “SAP ERP, private edition, transition option,” expected to be available by 2Q25, will give SAP customers an additional three years to transform their ECC6-based legacy SAP systems.

Customers can subscribe to this new option from 2031 until 2033, as a natural extension of the current extended support period that runs to 2030, which also requires a premium. Mainstream support is set to end in 2027.

The offer is being introduced amid a tense environment for SAP customers. Many organizations have already migrated to SAP’s cloud options: One-third (34%) of European organizations currently use S4/HANA Private Cloud Edition. But many customers are still at the beginning of their transformation path.

According to an IDC study, 17% of European organizations currently have no migration plan, and 7% remain undecided. Another key point is that the RISE with SAP program has attracted only 7% of organizations planning to migrate to S/4HANA in the coming months.

In a blog post, SAP shared further details about the new offer:

• It applies only to ECC — not the entire Business Suite 7 — with SAP validating eligible systems.
• It targets large-scale, complex SAP implementations engaged in the RISE with SAP program.
• Adaptations will be required to subscribe to the new offer, including data transformation efforts and addressing dependencies on third-party technologies. The subscription will be limited to the HANA database.
• Eligible organizations are required to migrate to S4/HANA private edition before the end of the extended maintenance period in 2030.
• SAP emphasizes that this is not an extension of the maintenance period but a new subscription service.

Impacts on Service Providers

As highlighted in IDC MarketScape: European SAP Modernization Services 2024 Vendor Assessment (IDC, December 2024), service providers play a pivotal role in SAP migration and modernization strategies across Europe.

The dual focus of service providers is a key trend: enhancing the value proposition of RISE with SAP while positioning SAP modernization as a cornerstone of broader business transformation. Migration to S/4HANA is framed as a critical step in overall enterprise modernization.

The introduction of this transition option requires service providers to adjust their strategies and emphasize certain services.

Strengthening Assessment and Consulting Services

Developing robust consulting services is crucial for assessing legacy systems. This involves analyzing the current state of the code base, system dependencies, and architecture, and discovering business processes.

By offering in-depth assessments, providers can help orgs build tailored modernization road maps aligned with corporate strategies. Many service providers have enhanced their expertise in process mining, often using tools like Signavio (or Celonis or their own internal tools), and have established dedicated centers of excellence across Europe.

The new subscription offer reinforces the need for these assessments. We believe service providers should:
• Evaluate existing systems for compatibility with SAP HANA (the only supported database).
• Help clients manage third-party software dependencies.
• Develop extended road maps that fit both business objectives and operational constraints.

Additionally, providers will need to guide clients on cost analysis to weigh the benefits of the new offer, particularly in cases where completing the migration by 2030 may not be feasible, or what would be the cost of the transformation with RISE with SAP, including in the new subscription.

Build Long-Term Customer Relationships

The new subscription and extra period should push service providers to start creating long-term modernization plans that balance evolving business needs and IT budgets. This involves fostering deeper client relationships with SAP users targeted by the new subscription.

Integrate AI to Optimize Business Processes

The integration of AI will play a central role in business process transformation by 2025, according to SAP’s roadmap. Service providers can embrace a long-term vision and capitalize on this by offering AI-driven process optimization and further enhancing the value of RISE with SAP.

Providers will need to implement training programs for both developers and end users to ensure broad adoption of new models and systems. This requires repositioning key roles (e.g., SAP developers) to transition from managing highly customized code to supporting externalized, standardized processes under the RISE with SAP model.

Change management will be critical, particularly for organizations with complex processes. They will increasingly demand structured, gradual change management programs from their partners to ensure both technical and organizational readiness.

Enhance BTP and Integration Services

Expertise in SAP’s Business Technology Platform (BTP) has become a market differentiator. The new subscription option will likely push service providers to focus on deeper integration services, AI, and third-party cloud services to rebuild business processes on top of S/4HANA.

For large-scale projects, balancing a “clean core” of standardized processes and customized processes will be critical, making integration via BTP a must-have capability.

Modernize Data Models and Streamline Data Migration

Data modernization is a core component of the HANA migration process. Providers will need to help businesses redesign data models and develop tools and accelerators to streamline the transformation. Many providers are partnering with specialized vendors such as SNP. These efforts will be vital as organizations assess the feasibility and costs of migrating to HANA while leveraging SAP’s new subscription model.

IDC has published a number of documents designed to provide a better understanding of the SAP systems modernization market and the role played by service providers in this context.

These include:

• The IDC MarketScape: European SAP Modernization Services 2024 Vendor Assessment (IDC, December 2024) analyzes the positioning of service providers in Europe and their service portfolios when it comes to SAP modernization.
• SAP Modernization Services in Europe: Insights from IDC’s 2024 European Cloud Survey (IDC, December 2024) provides insights into organizations’ intentions on the transformation of their SAP systems, in particular the evolution of S4/HANA private edition and public edition implementations in Europe.