SAP's grand cloud escape plan €2B short of the runway

Summary

Five years after launching its rescue plan to lift ERP users to the cloud and switch them to the latest software, SAP is off target by about €2 billion, The Register can reveal. Users reliant on SAP's legacy ERP software – including global businesses such as Airbus and BMW – are facing the end of mainstream support in 2027, but the German software giant has already changed its stance on support deadlines. As it misses migration targets, some experts see a change in emphasis. In October 2020, SAP CEO Christian Klein promised a new strategy after cuts to its sales and margin outlook caused a 23 percent share price crash. Speaking to investors, he said it would involve "accelerated technical migration of our customers' most important business applications to the cloud" in a platform powered by SAP S/4HANA, the in-memory database. The following January, SAP introduced customers to the new plan called RISE with SAP. For starters, RISE with SAP promised a lift-and-shift of complex SAP environments into public, private, and hybrid clouds. In addition, it planned to move users of ERP software older than S/4HANA onto the latest in-memory platform launched in 2015. Third parties signing up to the plan included Accenture, Atos, Capgemini, Cognizant, and Deloitte Consulting, as well as cloud providers AWS, Microsoft Azure, and Google Cloud. Early last year, it emerged that SAP may have strayed off target. Figures from the end of Q4 2024 showed only 39 percent of worldwide ECC customers – from a total of 35,000 – had bought or subscribed to licenses to start their transition to SAP S/4HANA. The figure was up marginally on the 34 percent recorded for the same quarter a year earlier. These are the most recent figures available on ECC migration. Last year, SAP replaced RISE with SAP S/4HANA Cloud Private Edition with SAP Cloud ERP Private Edition, creating confusion over licensing. The move also made it more difficult to compare like-with-like in terms of reported migration figures...