Extended deadline for SAP Business Suite 7
In a decision that surprised few, SAP granted a stay of execution for Business Suite 7.
The German enterprise applications giant today announced that it will continue standard maintenance support for key SAP Business Suite 7 software applications until the end of 2027, with optional extended maintenance available until the end of 2027. end of 2030.
At the same time, SAP announced that support for SAP S/4HANA will be extended to 2040. SAP S/4HANA is the next-generation ERP system that the company claims will enable customers to radically change business processes and operations, and to develop or expand new business models.
SAP previously announced that support for Business Suite 7 would end in 2025, forcing customers to upgrade to SAP S/4HANA or remain on Business Suite 7 without support.
However, the large SAP installed base of Business Suite customers have been reluctant to embark on an expensive and complex SAP S/4HANA migration, as it requires more work than a standard system upgrade that includes replacing the Customer’s Business Suite database by SAP HANA in -memory database.
SAP remains committed to S/4HANA and customers should expect a “long-term commitment from SAP to this platform,” said Christian Klein, SAP co-CEO and board member, in a statement. Press release.
More time needed
Committing to S/4HANA for the long term while extending support for SAP Business Suite 7 should reassure customers who want to move to S/4HANA but are wary of the time it will take for the move, said Andreas Heckmann, vice-director of SAP. President and Head of Customer Success Services.
“We’ve had a lot of customer communication and talked to user groups, and we’ve seen that we have an ever-growing wave of customers moving to S/4HANA,” Heckmann said. “But customers say they don’t just want to migrate to S/4HANA, they have a huge business transformation and 2025 is fast approaching. So they would be more comfortable if they had a little more time to manage this huge commitment to drive through the entire transformation of the business.”
Heckmann cited a recent survey from ASUG, the SAP User Group of the Americas, which indicates that the vast majority of SAP customers are considering moving to S/4HANA, and another from DSAG, the German-speaking SAP User Group , indicating that customer investment in S/4HANA is increasing significantly.
SAP customers now have the time to properly plan and manage an S/4HANA migration, said Jan Gilg, SAP senior vice president and head of SAP S/4HANA.
“Now is a good time to give customers safety and security so they have clarity and know what options they have for 2030 so they can really plan properly,” Gilg said. “Feedback we’ve received from user groups indicates that they’re actually quite happy, but need help planning.”
Welcome news for customers
The announcement reverberated through the SAP ecosystem, with observers seeing the pros and cons of SAP. Many believe SAP customers are probably breathing a sigh of relief, while some competitors believe it strengthens their case for abandoning S/HANA plans altogether.
“This was to be expected and good news for SAP, its customers and the ecosystem,” said Holger Mueller, vice president and principal analyst at Constellation Research. “This gives customers more time to evaluate the migration to S/4HANA, understand the value proposition and decide when to upgrade. For the ecosystem, this is good news, as it provides more time for consultant qualification and more achievable project timelines.
It also gives SAP time to prove the S/4HANA value proposition and make the upgrade issue a “no-brainer,” Mueller said.
“It’s certainly no surprise, because customers don’t like to be rushed into anything, and 2025 will have been too soon,” said Predrag Jakovljevic, senior industry analyst at Technology Evaluation Centers. “SAP has risked departures to companies like IFS, which are looking for this ‘viable alternative to SAP’… As for the commitment to work on S/4HANA until 2040, it shows SAP’s confidence – at least in the future. outside – in the product, and customers love certainty.”
No excuse to sit on the sidelines
The news shouldn’t have come as a surprise to anyone paying attention to the S/4HANA conversion numbers, said Geoff Scott, CEO of ASUG, but rather it’s an acknowledgment that there’s a lot of work going on. an S/4HANA migration and that customers will benefit from the additional time. However, customers should not sit idly by and miss out on the benefits of S/4HANA technology either.
Geoff Scott CEO, ASUG
“The good news is that customers don’t have to make a drastic change to pay homage to a date, but the technological revolution we’re all living in – with the digitization of products and services – shows no signs of slowing down of its dynamic pace,” Scott said. “And that’s the reality that all businesses need to understand. So while SAP’s announcement provides more flexibility for those on the sidelines, I don’t see this as justification for staying on the sidelines.”
Scott’s perspective was echoed by Ekrem Hatip, Senior Solutions Architect at Syntax Systems, a Montreal-based company that provides managed services for SAP systems.
“Although SAP has extended its support deadline for SAP Business Suite 7…customers shouldn’t become apathetic,” Hatip said. “Migrating mission-critical applications to the cloud can be a complex process, and companies that haven’t started yet should use this extra time to solidify a cohesive strategy and timeline for migrating to S/4HANA.”
However, the argument that customers shouldn’t use the extension as an excuse to stay on older versions misses a bigger point, said analyst Jon Reed, co-founder of Diginomica.com, an enterprise software news and research site.
“Clients shouldn’t procrastinate on the issue of digital transformation and how to respond to disruptions in their industry,” Reed said. “How SAP fits into this answer is a separate discussion, and SAP needs to earn a seat at this table based on platform, ease of integration, time to value, quick wins, modular steps and quality partners who understand the vision and have the experience and global capabilities of the intelligent enterprise in the future.”
Competitive pinch makes extension necessary
Extending Business Suite support was necessary as SAP was beginning to feel increasing pressure from competitors who see an opportunity in customers’ reluctance to begin the S/4HANA migration process, said Josh Greenbaum, Director at Enterprise Applications Consulting.
SAP was starting to be punished on the ground by competitors pointing to 2025 and saying, “We’ll take care of you better than that,” Greenbaum said. “Many customers are either upgrading to S/4HANA just because of 2025, or more importantly finding their CEOs and boards wondering whether they should upgrade to S/4HANA or look at a competitor.”
SAP customers now have a better way to move to S/4HANA because there is more certainty, he said.
“Some companies are still using R/3, so it’s reasonable to expect that some customers will want to run [SAP Business Suite] after 2027, and at least right now, there is a plan for them,” he said. “The real problem was that there was this cliff that looked like everyone was going to fall in 2025, and it wasn’t healthy for anyone. . Now, instead of a cliff, there’s a bridge, and that can make a big difference for many businesses in terms of long-term planning.”
Nevertheless, the extension of support for Business Suite 7 confirms the argument made by some competitors: SAP legacy customers have a choice and an S/4HANA migration does not need to take place if the analysis profitability is not there.
The Business Suite support extension gives the illusion of customer concern but only delays the issue, said Darren Roos, CEO of IFS, an SAP competitor that provides manufacturing-focused ERP systems.
“Even with a two-year extension, there simply aren’t the skills or resources available to migrate everyone before that deadline.” Roos said. “For many customers, there is still no real, quantifiable value in S/4HANA, and most people who have already committed to reimplementing still do not have an ongoing project to move away from their existing ECC instance.”
Customers should base their ERP choice on the model that works best for them, not on timelines that primarily benefit the vendor, Roos said.
Adding two more years of standard maintenance for Business Suite 7 doesn’t solve the bigger problem that S/4HANA is struggling to deliver a quick return on investment for many SAP customers, said Eric Robinson, vice president of Group and Managing Director of SAP Services at Rimini Street, a company that provides third-party support services for SAP platforms.
“Business Suite 7 software still has many years of life and value left, and many SAP customers would do well to maximize the value of their current robust SAP systems with alternatives like third-party support that can offer support until 2035 at least.” Robinson said. “This allows them to shift funds toward innovation initiatives that will more quickly generate competitive advantage and lower-risk growth. Once S/4HANA and other competing systems have matured, SAP customers can select flexibly the most suitable system for their future business platform.”