SAP support auto-renewal gotcha: Do nothing now, pay for another year

Single digit price hikes suspected for UK and Europe and double digit mooted for everywhere else

Updated Like car insurance, software support contracts can renew annually by simply doing nothing, a phenomenon with which SAP users should be all too familiar... but sometimes they are not.

Unless SAP-supported users tell the vendor otherwise by September 30, their current contract will renew in January and continue until the beginning of 2026.

"If you want to change your maintenance provider for 2025 you need to notify SAP by the end of September," said Jon Gill, veep at Spinnaker Support, which provides third party support for SAP software. "If you try to notify them on the first of October, you can't leave until January 2026." Meanwhile, SAP is in the process of deciding pricing for the coming year.

"At some point in the next couple of weeks or months, SAP will confirm what the price increase is going to be," Gill told us. "I think it'll probably be around 3 percent, although I've heard as high as 5 percent. Outside of the UK and outside of Europe, double digits."

SAP has reaffirmed its stance on ending mainstream maintenance for legacy ERP platform ECC. While the end-of-2027 cutoff has been well publicized, this only applies to certain enhancement packs (EHP6-8); the end date for EHP5 and earlier is 2025, a timing that can catch users out, as we reported last year.

Customers who want to continue using ECC beyond 2027 can get extended maintenance from SAP at a 2 percent premium, but the level of support remains uncertain.

"There's not a lot of clear detail about it," Gill said. "They're not explicitly saying customer-specific maintenance, which is some security patches, fixes for known problems, but with no SLAs around that. My personal view is it will be an enhanced level of support on that. They'll maybe have the same kind of thing, but with SLAs, [although] I've not seen anything that gives absolute clarity at this point."

A spokesperson for Rimini Street, another provider of third-party SAP support, pointed out that SAP has become more aggressive in pushing customers to S/4HANA Cloud and RISE with SAP, the German software giant's lift-shift-and-transform approach of getting customers from on-prem legacy systems to its latest cloud-based ERP system.

"Their leadership has stated that they intend to convert €11 billion in maintenance revenue to SaaS worth 2-3x in revenue. Their investors like that. Their customers, not so much," the spokesperson said.

Earlier this month, The Reg reported that RISE adoption has slowed as a proportion of SAP's total revenue, while 63 percent of ECC customers have not yet licensed S/4HANA – a figure that is only falling slowly, according to Gartner data.

In 2022, SAP stoked user criticism after it hiked support rates by a maximum of 3.3 percent, while it has said the latest innovations will only be available on S/4HANA in the cloud.

"Even after doubling down on maintenance end dates, raising annual fees for on-premises customers and not offering their premium innovations to those running S/4HANA on-premises, many are still resistant to signing on the RISE dotted line," the Rimini Street spokesperson said. ®

Updated to add at 1420 UTC

SAP confirmed with us that new prices apply from January. We have asked it to clarify whether a September auto-renewal would preclude customers from getting hit by the price hike until September 2025.

A spokesperson told us the increase was capped at 5 percent: "With effect on January 1, 2025, SAP will adjust the annual fee for the SAP support agreements based on the local CPI rate but not more than a percentage increase of 5 percent."

It added that the "adjustment is applied percentual to the yearly maintenance payment and [is] not based on the original licensing cost. It also does not represent a list price increase for our support offerings" but was rather linked to country's own Consumer Price Indexes. It added: "Nobody globally will pay more than 5 percent even if their local CPI rate is higher."

Updated to add at 1542 UTC

SAP returned to clarify after this update that "a customer has until 30th September to decide if they want to cancel the contract. If the customer decides to cancel, the contract would end December 31st 2024. If not, the contract will be renewed from 1st of January 2025 to 31st December 2025 and is subject to the CPI increase from January 1st 2025 onwards. Customers must give three months' notice to terminate the contract."