Plan B for SAP Renewals
Introduction: Why You Need an SAP Renewal Plan B
SAP is known for aggressive renewal tactics. Many organizations feel pressured into extending SAP contracts on SAP’s terms, often with rising costs or bundled cloud deals. Without a backup plan, you risk being forced into a costly SAP contract renewal that doesn’t align with your budget or IT roadmap.
Having a credible Plan B for SAP renewals is critical. An SAP exit strategy gives you leverage—if SAP knows you are prepared to walk away, they are more likely to offer better terms.
Being ready with SAP renewal alternatives empowers CIOs and CFOs to negotiate from a position of strength rather than fear. Read our overview for SAP Contract Renewal & Optimization Strategies.
SAP Renewal Alternatives: What If You Don’t Renew?
If you choose not to renew your SAP contract, you need an alternative plan for support and system continuity.
Fortunately, there are several SAP support alternatives if you don’t renew:
- Leaving SAP maintenance contracts: For SAP ERP (ECC) customers with perpetual licenses, you can simply stop paying maintenance. You retain the right to use your SAP software, but you lose SAP’s support and updates. Some companies choose to self-support for a period, relying on internal IT teams to handle minor issues. This approach saves maintenance fees but can be risky if critical fixes or compliance updates are needed.
- SAP third-party support options: Many organizations turn to third-party support providers as a cost-effective alternative; these independent firms can support your existing SAP ECC or S/4HANA system at roughly 50% lower cost than SAP’s standard support fees. These providers handle bug fixes, tax/regulatory updates, and troubleshooting on the versions you run. With SAP third-party support, you aren’t forced into upgrades and can keep a stable system for as long as needed. The trade-off is that you won’t get new SAP releases or enhancements, so you must plan major upgrades on your own timeline.
- Considering an SAP RISE exit strategy: If you’re on SAP’s RISE (S/4HANA Cloud) or another SAP cloud subscription, one alternative is to migrate those workloads off SAP’s cloud to your own environment (for example, on AWS or Azure). This move effectively exits the RISE contract but requires careful planning. A SAP RISE exit strategy likely involves negotiating new licensing (since RISE is subscription-based) and performing a technical migration. The benefit is greater control over infrastructure costs and the ability to get competitive hosting rates; however, this path can be complex and needs thorough preparation to avoid downtime or data loss.
Always look into this before renewal: SAP Renewal Optimization – Right-Sizing Licenses & Reducing Shelfware.
Understanding SAP License Ownership Rights
Your strategy depends on what type of SAP licenses you have. Perpetual license holders (common with SAP ECC or on-premise S/4HANA) own the software rights indefinitely.
Even if you leave SAP maintenance, you keep the license and can legally continue using the software; SAP cannot take away your SAP license ownership rights just because you stop paying support. This ownership is a key fallback: it lets you consider third-party support or self-support because you won’t lose access to the software itself.
On the other hand, subscription licenses (such as SAP RISE or SaaS products like SuccessFactors) work more like rentals. If you stop paying for a subscription, your rights to use that SAP software end.
There is no perpetual usage to fall back on; your system access will be shut off when the contract lapses. Companies with perpetual licenses have more flexibility in leaving SAP maintenance contracts, while those with cloud subscriptions must plan an exit carefully to avoid business disruption.
SAP Extended Maintenance vs Third-Party Support
For customers on SAP ECC facing the end of standard support, SAP has offered extended maintenance beyond the usual end of maintenance (for example, past 2027). However, SAP extended maintenance costs significantly more than standard support – often an extra 2%–4% on top of the usual maintenance fees.
This means you could pay around 24%–26% of your original license cost per year (versus the standard ~22%) to have SAP’s backing until you eventually migrate to S/4HANA. Extended maintenance might make sense if you absolutely require SAP’s direct support (e.g., for compliance or in a heavily customized environment). Still, it remains a very costly way to buy time.
In contrast, third-party support offers a cheaper, more flexible alternative, typically charging about half of SAP’s fees and supporting older software versions without pushing you to upgrade.
They also often cover customizations and provide tax and legal updates, extending the life of your existing SAP ECC system. The downside is that third-party support cannot give you new SAP patches or innovation (since only SAP can provide proprietary updates).
If your system is stable and cost savings are the main goal, third-party support can carry you through the SAP ECC end-of-maintenance period at a much lower cost. Some companies even consider a hybrid approach.
For example, they might use SAP’s extended maintenance for a year or two during a critical period, then switch to third-party support once things are stable. This staggered strategy provides SAP’s backing when needed while still achieving significant cost savings in the long run.
Self-support is another option, albeit usually a short-term stopgap. A company might rely on in-house IT and postpone any support contract for a few months while deciding on the next step.
This self-support strategy eliminates support fees entirely, but it’s risky—without any vendor assistance, you must handle all issues and compliance requirements alone.
Most businesses only self-support as a temporary measure while transitioning to third-party support or a new platform.
Risks of SAP Contract Lapse in Cloud Subscriptions
In an SAP cloud subscription model (such as RISE with SAP, SuccessFactors, or other SAP SaaS offerings), failing to renew has immediate consequences.
When an SAP cloud contract ends, your access to the software and data is typically terminated shortly thereafter. This is very different from on-premise, where you could keep running the system.
The primary risk of SAP cloud subscription termination (letting your cloud contract lapse) is loss of access: your users will be locked out of the system, and any business processes running on that platform will halt.
Data retention and export become critical at the time of contract termination. SAP may delete or archive your data after a certain period once your subscription lapses. You must plan to export your data and databases before the contract ends or ensure the agreement includes provisions for data retrieval.
Without careful planning, a cloud subscription lapse could result in permanent data loss or a frantic rush to recover information from backups.
Companies considering leaving RISE or any SAP SaaS should negotiate transition terms in advance. For example, you might seek a short-term extension or read-only access period to safely migrate data to a new environment.
It’s also wise to line up the new platform (whether moving back on-premise or to another cloud) well before the SAP contract expiration. Negotiating a short-term extension (even 3–6 months) can provide a safety net, ensuring you don’t face a hard cutoff while migrating critical systems.
Negotiation Leverage: Using Plan B to Pressure SAP
One of the biggest advantages of having a Plan B is the leverage it creates for SAP contract renewals. SAP’s sales and account teams know when customers feel trapped—they may hold firm on high prices or unfavorable terms if they believe you have no other choice.
By contrast, if you make it clear that you have viable alternatives, you shift the power dynamic.
Showing SAP that you are evaluating SAP support alternatives (like third-party support or alternate hosting) or even considering other ERP solutions sends a strong message: they could lose your business.
Use your SAP exit strategy to put pressure on SAP during renewal talks; for instance, gather quotes from third-party support providers or outline your migration plan to another platform. Let SAP know that your leadership is aligned on these alternatives.
If SAP believes you are serious about leaving, they are more likely to offer discounts, flexible terms, or special incentives to keep you.
The key is credibility: a vague bluff won’t work – you need to demonstrate that timelines are in place, budget is allocated, and executive backing exists for the Plan B.
Timing is crucial, so be aware of your SAP contract termination rights and notice periods (many agreements auto-renew or require notice 3–6 months before expiration).
Plan to communicate your intent (or willingness) to terminate at the right moment. For example, issuing a formal notice of termination if negotiations stall can be a powerful lever that prompts SAP to come back with a better offer rather than lose a customer. However, be prepared to follow through with your Plan B if they call your bluff.
Comparison of SAP Renewal Alternatives
| Option | What It Means | Pros | Risks/Cons | Best For |
|---|---|---|---|---|
| Renew SAP Support | Stay on standard SAP maintenance | Continuous updates; official support | High cost (≈22% fees); no flexibility | Companies still investing in ECC or S/4 |
| Third-Party Support | Use independent support provider | ~50% cost savings; no forced upgrades | No new SAP versions; must plan upgrades | Stable ECC landscapes |
| SAP Extended Maintenance | Pay premium to stay on ECC longer | Official SAP support; longer runway | Expensive (+2–4% fees); limited innovation | Regulated industries needing SAP’s backing |
| RISE Exit / Hyperscaler Hosting | Move S/4HANA to AWS/Azure (leave RISE) | Flexible infrastructure; competitive bids | Complex migration; potential SAP pushback | Large enterprises with strong IT/cloud teams |
Step-by-Step SAP Exit Strategy Checklist
- Confirm your SAP license type: Verify if you have perpetual licenses or subscription-based licenses. This determines your flexibility (perpetual means you can use the software without renewal).
- Review contract termination rights: Check your SAP agreements for renewal dates, notice periods, and termination clauses. Mark the latest date you can notify SAP of non-renewal.
- Benchmark third-party support options: Get quotes and service details from SAP third-party support providers. Compare costs (often ~50% less) and offerings to see if they meet your needs.
- Assess a RISE exit strategy: If you use SAP RISE or cloud, evaluate moving your SAP system to a hyperscaler or on-premise environment. Determine technical steps, new licenses needed, and a realistic timeline.
- Plan data export and continuity: For any SAP cloud product, prepare to export your data well before the contract ends. Have a plan to keep business operations running if SAP access is cut off.
- Align leadership on Plan B: Ensure the CIO, CFO, and other executives support the fallback plan. Get consensus on the willingness to leave SAP support or migrate systems if necessary.
- Leverage Plan B in negotiations: Let SAP know (tactfully) that you have alternatives in place. Use the existence of a credible Plan B to push for better renewal terms and pricing.
FAQ: SAP Renewal Alternatives & Exit Strategy
Q1: What happens if we don’t renew SAP support?
A1: For ECC, you keep the software but lose SAP support and updates. For RISE or other cloud subscriptions, access to the software and data ends if you don’t renew.
Q2: Can we move to third-party support after leaving SAP maintenance?
A2: Yes, if you own a perpetual SAP license, you can switch to an independent support provider. Third-party support typically cuts support costs by about 50% while covering bug fixes and compliance updates.
Q3: What is the SAP RISE exit strategy?
A3: It’s a plan to leave SAP’s RISE cloud offering by migrating your S/4HANA system to another environment (AWS, Azure, or on-premise) and obtaining any needed licenses outside the RISE subscription.
Q4: Can we negotiate short-term extensions instead of a full renewal?
A4: Yes, many customers negotiate a short 3–6 month extension for support or cloud access. This provides extra time to make decisions or complete migrations without committing to a long renewal.
Q5: Do we lose our SAP licenses if we leave SAP maintenance?
A5: No, not if they are perpetual licenses. You retain the right to use the software indefinitely. You just lose SAP’s updates, new releases, and direct support services.
Q6: Is SAP Extended Maintenance worth it?
A6: It’s quite costly. Only consider extended maintenance if you critically need SAP’s official support (for compliance or risk mitigation) and cannot transition to an alternative in time.
Q7: Does having a Plan B really help in SAP negotiations?
A7: Yes, when SAP sees you have real alternatives (like third-party support or alternate hosting), they’re more inclined to offer better pricing or concessions to keep your business.
Read about our SAP Contract Negotiation Service
