The Persistent Business Case Challenge
More than ten years since SAP introduced its flagship S/4HANA in-memory ERP platform, the technology giant continues to face significant resistance from its established customer base. Recent research reveals that a staggering 95% of legacy SAP users describe building a compelling business case for migration as either requiring substantial effort or presenting genuine challenges. This persistent hesitation highlights deeper issues within SAP’s transition strategy that extend beyond simple technical upgrades.
The comprehensive survey of 455 IT leaders, SAP specialists, and business managers uncovered widespread unease about SAP’s evolving licensing and support policies. Eighty-three percent of respondents admitted they don’t fully understand SAP’s latest migration requirements and deadlines, while 84% expressed concern about how current messaging would impact their operational stability. This uncertainty comes at a critical time when organizations are navigating numerous industry developments that demand strategic technology investments.
Support Deadlines and Customer Investment Protection
SAP has established what many perceive as aggressive support timelines for its legacy ECC system, which thousands of organizations have customized extensively over years—often at costs reaching millions of dollars. Mainstream support for ECC concludes in 2027, with extended support ending in 2030. Under specific conditions and with early commitment to cloud migration packages, some customers may extend support until 2033, but this requires significant advance planning.
The research, sponsored by enterprise application support provider Rimini Street, found that 94% of organizations see substantial value in extending their existing SAP systems rather than undertaking immediate migration. This preference for maintaining current investments reflects broader concerns about manufacturing sector losses that can result from disruptive technology transitions.
The Composable Architecture Alternative
Distinguished analyst Dale Vile of Freeform Dynamics notes that SAP customers are increasingly embracing the concept of open “composable” architecture, where organizations loosely integrate third-party solutions to meet their ERP requirements. “This business-led rather than supplier-led approach has been commonplace in other areas of IT for a while as it pays dividends in terms of flexibility, control, and access to new innovations,” Vile explained.
This trend toward modular technology solutions reflects how companies are responding to data management challenges that impact profitability across industrial sectors. The composable approach allows organizations to maintain core systems while selectively adopting new capabilities as business needs evolve.
Cloud Transition Complications
Following S/4HANA’s 2015 launch, users initially had the choice between on-premises or cloud deployments. However, SAP now strongly favors a cloud SaaS model, stating that key innovations—including artificial intelligence capabilities—will only be available through cloud deployments. This shift has created additional complexity for organizations with significant on-premises investments.
Last month, DSAG, the SAP user group for Germany, Austria, and Switzerland, called for greater transparency in cloud licensing to facilitate migration from on-premises systems. This request came after SAP replaced its RISE with SAP product package with SAP Cloud ERP Private Edition, introducing pricing based on a new Full-Use-Equivalent metric that differs from licensing in other deployment models. These ongoing SAP migration challenges demonstrate how licensing complexity continues to hinder adoption.
Business Process Transformation Requirements
The transition from ECC to S/4HANA represents more than a technical upgrade—it demands fundamental business process changes. SAP recommends that users eliminate customizations developed in legacy systems and either adopt new standardized processes or rebuild applications within SAP’s cloud platform. This requirement often means abandoning years of business-specific optimizations, creating additional resistance among long-term customers.
Recent findings from Gartner reveal that 61% of SAP customers using the legacy ECC platform had not yet licensed S/4HANA software by March of this year. This hesitation occurs despite the potential benefits of AI and automation technologies that SAP promises through its cloud offerings.
Industry Impact and Future Directions
SAP provides core business applications for many of the world’s largest industrial organizations, particularly in Europe where companies like Volkswagen Group, Siemens, and Airbus rely on its systems. Approximately 35,000 organizations continue to operate ECC globally, including some of the world’s most significant industrial groups. The ongoing challenges in the UK steel industry highlight how macroeconomic factors further complicate major technology investments.
As organizations weigh their options, many are exploring strategic technology partnerships that offer more flexibility than traditional ERP migration paths. SAP maintains 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, for many legacy customers, the business case for this transition remains unconvincing after a decade of availability.
The persistent gap between SAP’s cloud-first vision and customer readiness underscores broader tensions in enterprise software evolution. As organizations balance innovation needs with operational stability, the S/4HANA migration dilemma continues to represent one of the most significant challenges in industrial computing today.
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