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Under pressure, SAP shuts down Russian operations

On-prem software may remain albeit without support nor maintenance

SAP announced on Tuesday it was exiting Russia after 30 years of operations in the country, leaving on-prem customers with no software support.

“Our hearts and hopes are with the people of Ukraine. More than anything, we want this war to end,” the German software giant declared, referring to Russian president Vladimir Putin's illegal invasion of Ukraine, in a canned statement announcing its exit.

SAP paused all Russian sales in early March in accordance with international sanctions. However, the biz faced criticism for still supporting its products in Russia. Ukrainian president Volodymyr Zelenskyy called SAP out in a viral tweet, alongside Microsoft and Oracle, for supporting technology in Russia.

Oracle tweeted on March 14 it had left Russia altogether, leaving existing customers without software updates or support. Microsoft did not. Ukraine's vice prime minister Mykhailo Fedorov stepped up the pressure with a series of accusatory tweets that tagged SAP.

On March 24, the biz announced it would end its Russian cloud computing services. Two days later Mykhailo praised SAP and said it had not only agreed to support a digital blockade to Russia, but would one day open an R&D center in Ukraine.

SAP software can be licensed for on-prem use, or obtained as a cloud-based subscription service, making it not simple to shut off its product entirely in Russia.

"There are customers in Russia that have bought and deployed their SAP products on premise and run these products within their own internal IT departments," said SAP in late March. "This means that regardless of any SAP decision not to provide support or engagement of any kind, these customers are still able to continue using these products independently of SAP."

SAP chief financial officer Luka Mucic reportedly said in a Tuesday call: "There is no magical red button that SAP could push to make these software licenses disappear from the computers."

SAP is giving cloud subscribers in Russia who are not otherwise subject to sanctions three options: have their data deleted, returned, or migrated to a datacenter outside of Russia. Those who choose migration will be forced to find an alternative solution eventually, as SAP said it will not renew the subscriptions.

For on-premises products, SAP said it was evaluating ways to exit support and maintenance while honoring its obligations to non-sanctioned customers.

SAP has a decent-sized presence in the region, reportedly supplying over half of Russia's top 100 companies by revenue with its services in pre-war, pre-pandemic 2018. However, its combined business in Russia, Belarus, and Ukraine only make up 1.5 per cent of its total revenue. ®

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