SAP barely moving needle to migrate users off ECC before support ends
Gartner finds only a third are somewhat prepared for S/4HANA transition
Global tech researcher Gartner has found that only 33 percent of SAP users relying on its legacy ECC ERP system have bought or subscribed to licenses to start their transition to S/4HANA.
The data from Q2 2023 also showed that while a third of ECC users had failed to buy S/4HANA in any form, just a fifth were live with the latest version of SAP's ERP platform in at least one of their components.
Maintenance support for ECC runs out at the end of 2027, but users of enhancement pack 5 (EHP5) or earlier will see their mainstream support cut at the end of 2025. Meanwhile, the German software giant is struggling to move users to a subscription model of S/4HANA in the cloud, via its RISE with SAP and GROW with SAP packages.
"Gartner still sees little evidence that migrations to SAP S/4HANA are taking place at the rate needed to meet SAP's target to terminate mainstream maintenance support for ECC in 2027," the research note said.
One of the reasons may be the sluggish uptick of ECC customers shifting to the new platform. Data from the second quarter of last year shows 30 percent of users with any kind of S/4HANA license, while SAP has only managed to move the number by three percentage points in a year.
Gartner said many SAP ECC customers have not yet made a final decision about S/4HANA, but most are evaluating their options. "It is acceptable to decide that you will not adopt S/4HANA, or that you will opt for partial adoption or even third-party support, as long as you define your next steps. Consider the implications of moving your ERP applications from an owned model to a consumption-based SaaS model to help ensure alignment with your business goals," the research house advised.
Despite the clock ticking on the support deadline for ECC, Gartner encouraged users to take their time to plan their next move.
"Time is running out for organizations planning to move to SAP S/4HANA," the research note said. "Not every organization will complete its migration before the announced end-of-life support date for SAP ECC. The more complex your environment, the more likely it is that migration will be a multiyear journey, and will require more resources – from your organization and from an implementation partner.
"Resist the temptation to cut the planning process short. Consider the wider implications of moving forward to stay in step with the end-of-life target dates."
The figures follow SAP's own research, released at the recent DSAG conference for users in German-speaking nations, showing that half of ECC users are on EHP5 or earlier and, as such, will fail to qualify for extended support beyond 2025.
SAP was offered the opportunity to respond to the Gartner research.
Jens Gleichmann, managing director of German SAP consultancy Crossload, said the shift from ECC to S/4HANA was about more than technology; it would also impact how IT organizations operate.
- Qualtrics culls 780 jobs amid 'complex' growth spurt
- City council Oracle megaproject got a code red – and they went live anyway
- MongoDB promises to keep its hands off application building
- Techies at Europe's biggest council have 8 weeks to pull finance reports from Oracle system
"Currently [many ECC users] are on Oracle or IBM Db2 databases," he said. "They have a lot of skilled people but there's a structural problem, because normally, you have a database team and an SAP team. With the move to S/4HANA, you get a whole new database, but the database team thinks this is an SAP topic, so the SAP guys have to administrate the database. This can be a strange shift, which creates a lot of internal challenges."
Meanwhile, users should be careful about buying into SAP's preferred method to move customers from legacy software to its latest S/4HANA platform running on a subscription basis in the cloud.
Users can cash in ECC perpetual licenses to help move to subscription deals in the cloud under SAP programs RISE with SAP and GROW with SAP, which the German vendor launched with service partners and cloud hyperscalers. But some fail to grasp how this can affect their future choices, Gleichmann said.
"If you switch to S/4HANA with RISE with SAP, you will only get a subscription. If you are not happy or satisfied with the service and want to move out of the RISE subscription, you don't have a valid license to run it on-prem anymore. It is really close to a vendor lock. Most of the customers are not aware of what it means to no longer own a license."
In response to the numbers released at the DSAG conference, SAP said it had been transparent with customers, and in February 2020 announced that IT would provide mainstream maintenance for core applications of [ECC] SAP Business Suite 7 software until the end of 2027, followed by optional extended maintenance until the end of 2030.
"This information has been made available on the SAP Support Portal, in our product availability matrix, the respective SAP Support Notes and in a press release and interviews," the spokesperson said.
"For SAP ERP 6.0 this refers to three latest enhancements packages starting with EHP6 and including newer versions. In October 2014, we announced that systems on EHP5 or earlier product versions will remain in mainstream maintenance until end of 2025 followed by customer-specific maintenance from 2026 onwards. This includes problem solving for known issues at unchanged fees." ®