SAP Maintenance & Support Cost Management
Introduction
SAP’s maintenance and support fees are notoriously high – typically about 22% of your software license value every year.
For enterprises with large SAP environments, this can amount to millions of dollars annually, making SAP support one of the biggest recurring IT costs. Organizations on traditional perpetual SAP licenses (as opposed to newer cloud subscriptions) feel the weight of these fees in their IT budgets year after year.
Often, after just five years, a customer may have paid more in maintenance fees than the original cost of the software itself.
Yet many CIOs, CFOs, and IT Asset Managers struggle to see commensurate value for that 22%. These fees cover technical support and software updates; however, if your systems are stable or your usage is moderate, the costs may seem disproportionate.
This article serves as a guide to cutting the waste, negotiating smarter, and exploring alternatives to optimize or reduce your SAP maintenance spend.
By understanding what you’re paying for and taking proactive steps, you can rein in ongoing SAP support costs without exposing your business to undue risk.
Understanding SAP Maintenance Costs
SAP typically charges an annual maintenance fee of ~22% of the original license price for on-premise customers.
What does this fee include? In general, it entitles you to SAP’s standard support services: access to help desks and support engineers for issue resolution, regular patches and bug fixes, security updates, and the right to implement new versions or enhancement packs for the products you’ve licensed.
In other words, if SAP releases an update or minor upgrade to software you own, your maintenance contract allows you to download and use it. You also gain limited innovation benefits – SAP provides some tools, knowledge resources, and occasional advisory services to help you adopt new features.
However, these “innovation rights” are limited. The support contract doesn’t mean SAP will hand you entirely new products or major modules for free.
If SAP develops a next-generation product (for example, the move from SAP ECC to SAP S/4HANA), you typically must purchase that separately or pay license conversion fees. Thus, many customers feel the maintenance fee mainly keeps the lights on, rather than driving innovation.
The value gap between cost and benefit is a common gripe. Enterprises often question whether they’re getting their money’s worth from that yearly 22%.
In practice, many companies utilize only a fraction of the support they pay for – perhaps opening a handful of support tickets, applying a few patches, or attending a few SAP knowledge sessions each year. If your SAP environment is stable and your internal IT team or partners handle most issues, the ROI of SAP support can appear low.
Yet, stopping support without a plan isn’t wise due to significant risks. Let’s clarify those risks: if you let your SAP support lapse (or ignore it), you lose access to security patches and regulatory updates, which could leave your systems vulnerable or non-compliant with industry requirements.
You also forfeit SAP’s help for critical break-fix situations. Running an unsupported SAP system means that if something goes wrong, you’re on your own (or must pay SAP hefty fees on a case-by-case basis to help). In highly regulated industries or for mission-critical systems, this lack of official support can pose compliance issues and business continuity risks.
In short, the 22% maintenance fee is steep, but it serves to keep your SAP systems current and supported.
The key is ensuring you’re not overpaying for what you actually need.
Start by establishing a clear baseline of your SAP maintenance commitments and usage.
Checklist – Know Your SAP Maintenance Baseline:
- Current maintenance fee percentage identified: Do you know what percentage of your license value you pay in support, and what the annual dollar amount is? (It’s usually ~22% – confirm it in your contract.)
- SAP support utilization tracked: Are you tracking how much you actually use SAP support services (number of support tickets, frequency of applying patches, etc.) and the value derived?
- Peer benchmarking completed: Have you compared your support fees and terms with those of industry peers or benchmarks to determine if your deal is in line or if you’re overpaying relative to others?
SAP Maintenance Cost Challenges
For many organizations, SAP support costs bring a set of challenges that go beyond the hefty price tag. One issue is annual cost escalation – the maintenance fee tends to increase over time even if your license footprint stays the same. SAP often builds in annual uplifts tied to inflation or contract terms.
The result is that you might pay 3-4% more each year for the same level of service, with no obvious added value. This compounding cost can significantly inflate your IT spend over a decade. Another common pain point is paying support on “shelfware” – licenses or SAP modules you own but aren’t actually using.
If you bought 1,000 SAP user licenses but only 700 are actively in use, you’re still paying maintenance on all 1,000. That means a chunk of your 22% fee is pure waste on unused software. Shelfware often accumulates due to over-purchasing, mergers, or business changes, and it can quietly drain your budget if not addressed.
Customers also feel locked into SAP’s upgrade timetable. SAP ultimately decides how long it will support a given product version. For instance, support for SAP ECC (the older ERP system) has an end-of-mainstream-support date, after which SAP either charges extra for extended support or ceases to provide fixes altogether.
This effectively forces customers to plan expensive upgrades (like migrating to S/4HANA) on SAP’s schedule, not necessarily when it makes business sense internally.
The cost challenge here is twofold: you not only pay maintenance every year, but also need to allocate project budget for upgrades to remain supported – a one-two punch to your IT finances.
The overall business impact of unmanaged support costs is significant. Dollars tied up in keeping the lights on with SAP maintenance are dollars not invested in innovation.
Every euro or dollar invested in a steep support contract is funding that you can’t allocate to new digital initiatives, process improvements, or modern platforms.
In essence, excessive SAP support spend can crowd out innovation and agility, leaving the IT department feeling like they’re just treading water.
Risks of Unmanaged SAP Support Spend:
- Wasted budget on shelfware: Without oversight, you continue paying support for licenses and components you don’t use, yielding zero return on that spend.
- No leverage at renewal time: If you haven’t gathered data or explored alternatives, you have little negotiating power when SAP comes to renew the support contract – you’ll likely just accept the standard terms and increases.
- Missed cost-saving alternatives: By treating SAP maintenance as a static, fixed cost, you may overlook options such as adjusting your license counts or utilizing third-party support that could result in significant cost savings.
Checklist – Support Pain Point Awareness:
- Have you identified unused SAP licenses (shelfware)? Take inventory of what modules and user licenses are actually in use versus what you’re paying for.
- Are past maintenance fee increases tracked? Review how your SAP support costs have grown. Knowing if you’ve been hit with annual uplifts (and how much) helps build the case for cost control.
- Is there a business case linking support savings to innovation? Quantify what portions of your IT budget are tied up in SAP support and illustrate how freeing up some of that money could fund other projects. (For example, “If we save 20% on support, we could invest an extra $X in new analytics capabilities.”)
Cost Reduction Strategies Within SAP Contracts
The good news is that there are strategies to reduce SAP maintenance costs without having to immediately abandon SAP support.
By being proactive with your SAP contracts and license management, you can optimize your costs and negotiate more favorable terms.
Here are some key approaches:
License Rationalization (Shelfware Elimination):
This is often the most effective way to reduce costs. Analyze your SAP license inventory and pinpoint any “shelfware” – unused or underused licenses and modules. If you discover that certain licenses (e.g., extra user packs or add-on components) are not needed, you can terminate those licenses and remove them from your maintenance base.
SAP’s policy requires maintenance on 100% of your installed licenses, but if you completely give up a license (surrender it and stop using it), you are within your rights to stop paying for its support. In practical terms, this might involve decommissioning an old SAP component or reducing your user count to the actual number in use.
The immediate benefit is lower annual fees (since maintenance is calculated on a smaller license base). For example, if you drop $1 million worth of unused licenses, you save approximately $220,000 per year in maintenance (22% of $1 million).
The challenge is ensuring that you truly don’t need those licenses in the future – getting them back later could require purchasing new licenses or reimbursing support fees.
Accurate usage data and careful planning are critical for this strategy to succeed, especially in large SAP environments.
Contract Optimization (Negotiating Better Terms):
When it’s time to renew your support or negotiate a new SAP agreement, there are opportunities to improve the terms. One key tactic is to negotiate a cap on annual maintenance fee uplifts.
Instead of accepting open-ended yearly increases (which SAP may justify with inflation or other factors), insist on a clause that limits any increase to a small percentage or ties it to a standard index.
For instance, you might negotiate that your support fee cannot increase by more than 2% per year for the next three years. This provides predictability and cost control.
Another contract lever is pushing for flexible terms around license changes – for example, the ability to swap certain licenses for others of equal value or to get credits for unused licenses if you invest in new SAP products.
SAP won’t volunteer these concessions (since maintenance revenue is fiercely protected).
Still, if you have leverage (such as a competitive alternative or a large upcoming purchase), you can sometimes include terms that favor the customer’s cost management.
Ensure that any negotiated terms are clearly written into the contract, as verbal assurances will not be effective in the years to come.
Audit and Compliance Leverage:
SAP software audits can be stressful, but a clean bill of health can become a negotiating asset. If you’ve verified that you’re fully compliant (not using more licenses than you bought, and following the rules), you remove a key pressure point SAP often uses to sell more licenses or cloud subscriptions.
In negotiations, you can leverage this clean compliance posture to refocus the conversation on value and cost. Essentially, you’re signaling: “We’re good customers in compliance; the issue on the table is the cost versus value of maintenance.”
In some cases, customers may even request a compliance audit or use a recent clean audit report when seeking maintenance fee concessions.
While SAP rarely outright “discounts” the standard 22% fee, you might secure a temporary discount or credit if you commit to certain actions (like an expansion or upgrade, as we’ll discuss next) and demonstrate you have alternatives.
The key is to use all leverage points – including the option of canceling support on shelfware or even moving to third-party support – to strengthen your bargaining position.
Upgrade Planning (Future Commitments):
Another strategy is to exchange future commitments for present-day savings.
SAP is highly motivated to get its customer base onto S/4HANA and other new platforms so that you can use them to your advantage.
If your organization has a roadmap to upgrade to S/4HANA or adopt an SAP cloud solution in the next few years, inform SAP and see if they’ll sweeten the maintenance deal in the interim.
For example, some enterprises have negotiated a reduced maintenance rate or fee waivers on certain products for a year or two in return for signing a letter of intent to migrate to S/4HANA by a specified date. SAP may offer credits that can be applied to the new S/4 license or subscription if you stay on maintenance now.
Essentially, SAP might say, “Stay with us (don’t go to third-party support or cancel anything) and commit to our future product, and we’ll make your current maintenance less painful.”
This can create a win-win situation: you receive short-term cost relief, and SAP secures a future sale. Be cautious with this approach, however.
You are locking in a direction (which might limit your flexibility if strategies change), and you must ensure any promised incentives are clearly documented. Use this approach only if adopting the new SAP product aligns with your business strategy and timeline.
The following table summarizes these approaches to cutting SAP support fees, with their pros, risks, and ideal scenarios:
| Strategy | Pros | Risks / Considerations | Best Use Case |
|---|---|---|---|
| Shelfware elimination (license rationalization) | Immediate cost savings – stop paying for what you don’t use. | Requires accurate usage data and potentially surrendering licenses permanently. | Organizations with significant unused licenses or modules (“shelfware”). |
| Uplift caps in contract (negotiate rate limits) | Predictable cost management – limits unexpected fee growth year over year. | SAP may resist giving this, unless you have leverage or a large renewal at stake. | Enterprises entering a support renewal or new contract – especially those with bargaining power (large spend or competitive alternative). |
| Pre-commitment to upgrade (future roadmap leverage) | Can unlock incentives or credits – SAP may give discounts now to secure future business (e.g., S/4HANA migration credits). | Locks in your future roadmap with SAP; if plans change, you might lose benefits or face penalties. | Companies planning to move to S/4HANA or another SAP product in 2–3 years and confident in that plan. |
Checklist – Before Negotiating with SAP:
- Identify and quantify shelfware: Know exactly which licenses or components you can potentially drop, and how much maintenance money that represents in savings.
- Prepare 3-year cost projections: Model your SAP support costs over the next few years under different scenarios (status quo, reduced footprint, third-party support, etc.). This data will support your negotiation arguments and targets.
- Align on an internal SAP roadmap: Ensure your leadership and IT team have a clear understanding of future SAP plans (e.g., are you moving to S/4HANA and when?). This consensus is crucial so you can confidently use (or avoid) the promise of future purchases in your negotiation strategy.
Third-Party SAP Support as an Alternative
An increasingly popular option for SAP customers is to switch to third-party support providers. Firms like Rimini Street and Spinnaker Support specialize in providing support for SAP (and other enterprise software) independent of the original vendor.
In essence, you continue running your SAP systems, but you pay these third-party companies for support and maintenance services instead of paying SAP’s 22% fee. The allure of this route is straightforward: cost savings.
Third-party support providers typically charge around 50% of SAP’s maintenance fee (or even less), instantly cutting your annual support costs in half. Many organizations report savings of millions of dollars per year by making this move, which can be redirected into other initiatives or directly to the bottom line.
Aside from lower cost, third-party support offers some additional benefits.
One major benefit is extended support for legacy systems. SAP has fixed timelines for how long it will support older products (for example, standard support for SAP ECC ends by 2027), but third-party providers are willing to support your existing SAP version for 5, 10, 15 years – as long as you need.
This means you can avoid forced upgrades, keeping a stable SAP system running and fully supported beyond SAP’s own end-of-support date, without paying SAP’s high fees for extended support. Another benefit customers cite is a more personalized and responsive service.
Third-party vendors often assign a dedicated primary support engineer to your account, with deep expertise, who can address issues more efficiently and thoroughly than going through SAP’s ticket system.
They’ll also support customizations and integrations – areas where SAP’s support might say, “that’s custom, not our problem,” a third-party will still help you fix the issue.
For companies that have heavily tailored their SAP systems, this kind of support can be very valuable.
Of course, there are risks and trade-offs to weigh. The biggest consideration is that by leaving SAP’s official support, you lose access to SAP’s updates and intellectual property.
Third-party providers cannot provide you with new SAP software versions that were released after you left SAP support – for example, you won’t get new enhancement packs or versions of SAP software.
You’ll be frozen on the version you have at the time of switching. The third-party will still give you patches and fixes, but those will be their own solutions (they might develop or custom-engineer a fix if something breaks, since they can’t deliver SAP’s official patch).
Similarly, you give up the ability to easily migrate to new SAP products as part of your support. If you plan to eventually migrate to S/4HANA and have left SAP support, you will likely need to purchase S/4 licenses from scratch or pay a substantial “reinstatement” fee to SAP.
In other words, there is a re-entry cost if you ever want to return to SAP maintenance or upgrade to a new SAP-provided version.
Companies need to think long term: if you go third-party, it often makes sense if you intend to stay on your current SAP platform for many years or if you’re considering moving off SAP entirely.
If you know you must upgrade to a new SAP product in two years, third-party support might only make short-term sense (and you might delay that upgrade further to maximize the benefit).
Another risk is more operational: you are relying on an external firm to deliver critical patches and fixes. Reputable third-party providers have a track record, but they are not SAP’s internal development team.
There may be scenarios (though rare) where a new regulatory change or technology update arises, and SAP’s own patch is not available to you; in this case, your provider must engineer a solution.
Due diligence is key: ensure any third-party support vendor you consider has strong expertise in your specific SAP products, and ask about how they handle security patches, tax and legal changes, and major bug fixes.
Finally, consider the relationship with SAP: switching to third-party support can strain your relationship with the vendor for other deals.
While you retain the legal right to use your licenses, SAP sales may be less inclined to offer you favorable terms on anything while you’re not a support customer. This isn’t a deal-breaker, but it’s a reality to be aware of.
So, when does third-party support make sense? It is not a universal solution, but it shines in certain scenarios:
When Third-Party SAP Support Makes Sense:
- Stable, mature SAP systems in long-term use: If you’re running a stable SAP ECC or Business Suite environment that meets your needs, and you plan to use it for several more years without major changes, third-party support can keep it running smoothly ata lower cost.
- Minimal need for new features: Organizations that don’t need the latest SAP enhancements or new modules (i.e., you’re not relying on SAP’s innovation updates) are good candidates. You’re essentially in “maintenance mode” with your ERP – ideal for a third-party to maintain.
- Cost savings prioritized over SAP roadmap: If senior leadership is focused on cost reduction and you’re not committed to near-term SAP upgrades or cloud transformations, the savings with third-party support often outweigh the loss of future SAP deliverables. This can be a strategic holding pattern to conserve cash, especially if you’re uncertain about migrating to S/4HANA or considering non-SAP alternatives in the future.
Checklist – Third-Party Evaluation Readiness:
- Inventory of systems and licenses complete: Have you mapped out which SAP systems (and which parts of those systems) would be shifted to third-party support? Ensure they are ones you intend to keep on their current versions for a prolonged period.
- No urgent upgrades planned (5+ year horizon): Are your SAP upgrade or migration plans on hold? Ideally, you should anticipate not needing SAP-provided upgrades for at least five years if you move to third-party support. This avoids a scenario where you need something you can’t obtain without SAP maintenance.
- Stakeholder buy-in on external support: Is your organization (IT, procurement, risk management, and business leadership) aligned and comfortable with the idea of an external company supporting critical systems? It’s essential to establish clear expectations internally and ensure that everyone understands the trade-offs and is aligned with the strategy.
Financial Governance & Continuous Optimization
Whether you stick with SAP’s maintenance, move to a third-party solution, or use a mix, one principle remains key: ongoing financial governance. Managing SAP support costs is not a one-time project – it requires continuous attention and optimization.
Begin by integrating SAP maintenance reviews into your annual IT planning and budgeting process. For example, conduct a yearly (or semi-annual) audit of your SAP licenses and support usage.
This could involve reviewing user counts, usage logs, and checking if any new software has emerged (such as a project that went live and was subsequently scaled down, leaving unused licenses).
Regular reviews will ensure that if your business downsizes or changes, you can adjust your SAP licenses accordingly and avoid paying maintenance on new, unused shelfware that has been inadvertently created.
Another aspect of governance is tracking key performance indicators (KPIs) related to supporting cost efficiency. Treat your SAP support like an investment that should yield returns – and measure those returns.
For instance, track how the support cost compares to the value of the software in use, or the percentage of the support budget that is potentially wasted. If you undertake a cost-cutting initiative, monitor the results year over year.
Did the percentage of unused licenses drop? Did support as a percentage of overall IT spend go down? Regular KPI tracking will help identify if cost optimization efforts are stalling and require a refresh. It also helps executives understand whether you’re getting better value out of SAP maintenance over time.
Integrating these practices into your IT financial governance involves assigning responsibility and establishing processes. Assign a specific owner for SAP maintenance cost management – often this will be an IT Asset Manager, a representative from Procurement, or someone in IT Finance.
Their job is to monitor SAP support contracts, track renewal dates, coordinate usage audits, and lead negotiations or RFPs for third-party support as needed. This ensures accountability. Additionally, make SAP support fees a visible line item in budgeting discussions, rather than a hidden, assumed cost.
When planning the annual IT budget, review the SAP maintenance spend and any initiatives to adjust it explicitly. Over time, you can even set target reductions or efficiency goals (e.g., “reduce SAP support spend by 10% next year through license optimization or alternative support”).
By treating it as a controllable expense, your team will be more likely to find creative ways to continually optimize it.
To facilitate this ongoing oversight, consider establishing a regular report or dashboard on SAP support ROI.
This might include data such as the number of support tickets raised versus the associated costs, any major incidents averted due to support, and the current trend in spending. Present this to IT leadership quarterly. It keeps the topic on the radar, and successes (or problems) won’t go unnoticed.
In summary, continuous governance ensures that after making significant moves, such as negotiations or switching providers, you don’t fall into complacency.
SAP’s environment, your business, and the tech landscape all evolve – by keeping a tight governance loop, you’ll catch issues early and squeeze maximum value from whatever maintenance strategy you adopt.
To measure effectiveness, here are a few suggested KPIs for SAP support optimization and what they indicate:
| KPI (Key Performance Indicator) | Why It Matters | Target Benchmark |
|---|---|---|
| Support spend as % of license value | Measures whether your maintenance fees are aligned with the size of your SAP estate. If you have eliminated shelfware or negotiated down, this percentage should drop over time (standard SAP support is ~22%). | ≤ 22% (at or below the typical SAP rate – lower is better if you optimized or switched to third-party). |
| % of licenses under maintenance that are unused (shelfware percentage) | Highlights how much of your support cost is pure waste on unused software. A declining number means you’re cleaning up shelfware effectively. | < 5% (aim to have very minimal shelfware; nearly all licenses you pay support on should be in active use). |
| Annual support cost per SAP system | Indicates efficiency and potential redundancies. If this figure goes down, it could mean you decommissioned systems or consolidated, gaining economies of scale on support. If it’s rising, your landscape complexity (and cost) might be growing without added value. | Decreasing year-over-year (each year, supporting each system should cost a bit less as you optimize and remove waste). |
Checklist – Governance Actions:
- Appoint a support cost owner: Assign someone to be accountable for SAP support cost management (e.g., an ITAM or procurement lead who regularly reviews contracts and usage).
- Establish regular reporting: Set up a quarterly (or at least annual) review of SAP support value metrics, reporting on usage versus cost and progress on any savings initiatives to IT leadership.
- Include support in IT budget goals: Don’t treat maintenance as untouchable overhead. Include specific support cost optimization or reduction targets in your annual IT budgeting and vendor management plans, just as you would for new project investments or other expenses.
Related articles
- Why SAP Maintenance Costs 22% – What You Get and Don’t Get
- Can You Negotiate SAP Maintenance Fees? Yes – Here’s How
- Third-Party SAP Support vs SAP Support: Is the 50% Savings Worth It?
- Getting the Most Out of SAP Support: Tips to Optimize Service
5 Actionable Next Steps
Finally, to start putting these strategies into action, here are five concrete steps your organization can take right now to work toward lower SAP maintenance and support costs:
- Run a shelfware analysis – Identify any unused SAP licenses or modules in your environment, and initiate a plan to retire and stop paying support on those assets. Even a small reduction in license counts can yield substantial savings over time.
- Benchmark your fees – Compare your SAP support costs and terms with those of industry peers or established benchmarks. Use this data to set realistic savings targets and to build a case internally (and with SAP) that your maintenance deal should improve.
- Explore contract levers – Review your SAP contract for any upcoming renewal or extension opportunities. Plan to negotiate uplift caps, flexible terms, or other cost protections into the contract. If needed, engage experienced negotiators or advisors to strengthen your position.
- Assess third-party support – Even if you don’t immediately switch, do a due diligence evaluation of third-party support for your SAP landscape. Model out the cost savings vs. the trade-offs for your specific situation. This provides an alternative option and also offers additional leverage in discussions with SAP.
- Build governance into IT finance – Integrate SAP support cost management into your ongoing processes. Assign ownership, set up regular audits and reports, and tie it into budget reviews so that maintaining or reducing support spend becomes part of your organization’s DNA.
By following these steps and strategies, CIOs and CFOs can transform SAP maintenance from a static drain into a manageable, optimized expense.
The goal is not to jeopardize your SAP operations, but to strike the right balance between cost and value – ensuring you get the support your business needs at the lowest practical cost.
With diligence and the right approach, you can significantly reduce ongoing SAP costs and free up resources for innovation and growth.
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