Extended lead time for SAP Business Suite 7

In a decision that surprised few people, SAP granted a stay of execution for Business Suite 7.

The German enterprise applications giant announced today that it will continue general maintenance support for core SAP Business Suite 7 software applications through the end of 2027, with optional extended maintenance available until the end of 2027. the end of 2030.

At the same time, SAP announced that support for SAP S / 4HANA will be extended until 2040. SAP S / 4HANA is the next-generation ERP system that the company says will allow customers to radically change their business. 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 switch to SAP S / 4HANA or stay on Business Suite 7 without support.

However, the large installed base of SAP 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 base replacement. Customer’s Business Suite data 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

Long-term commitment to S / 4HANA while extending support for SAP Business Suite 7 should reassure customers who want to migrate to S / 4HANA but are wary of the time it takes to migrate, said Andreas Heckmann , executive vice president of SAP. President and Head of Customer Success Services.

“We’ve had a lot of communication with customers and talked to user groups, and we’ve found that we have an ever-growing wave of customers moving to S / 4HANA,” Heckmann said. “But customers are saying they don’t just want to migrate to S / 4HANA, they have a huge business transformation and 2025 is just around the corner. So they would be more comfortable if they had a little more time to manage this huge commitment to go 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 SAP language user group. German, indicating that customer investments in S / 4HANA are increasing significantly.

SAP customers now have the time to properly plan and manage an S / 4HANA migration, said Jan Gilg, senior vice president of SAP and responsible for SAP S / 4HANA.

“Now is a good time to provide safety and security for clients so they have clarity and know what options they have for 2030 so they can really plan properly,” said Gilg. “The feedback we received from user groups was that they were actually quite happy, but needed help with the planning. “

Welcome news for customers

The announcement spilled over into the SAP ecosystem, with observers seeing pros and cons for SAP. Many believe SAP customers are probably breathing a sigh of relief, while some competitors feel it strengthens their case for abandoning S / HANA plans altogether.

“That was to be expected and this is good news for SAP, its customers and the ecosystem,” said Holger Mueller, vice president and senior analyst at Constellation Research. “This gives customers more time to assess the migration to S / 4HANA, understand the value proposition and decide when to upgrade. For the ecosystem, this is good news, as it gives more time for the qualification of consultants and more achievable project timelines. “

It also gives SAP time to prove the S / 4HANA value proposition and make the upgrade issue “obvious,” Mueller said.

“This is certainly no surprise, because clients 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 risked departures for IFS, which is looking for this” viable alternative to SAP “… As for committing to work on S / 4HANA until 2040, this shows SAP’s confidence – at least externally – in the product , and customers love the certainty. “

No excuse to stay 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 it’s more of a recognition that there is a lot of work in a migration. S / 4HANA and that clients will benefit from the extra time. However, customers should also not sit back and miss out on the benefits of S / 4HANA technology.

While SAP’s announcement gives more flexibility to those on the sidelines, I don’t see it as a justification for staying on the sidelines.

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 all live in – with the digitalization of products and services – shows no signs of slowing down. dynamic pace, ”Scott said.“ And that’s the reality that all businesses need to understand. So while the SAP announcement gives more flexibility to those on the sidelines, I don’t see it as a justification for staying on the sidelines. “

Scott’s point of view 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 the support timeframe for SAP Business Suite 7 … customers should not become apathetic,” Hatip said. “Migrating mission-critical applications to the cloud can be a complex process, and companies that have not yet started should use this additional time to consolidate a cohesive strategy and schedule 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.

“Customers shouldn’t dwell on the issue of digital transformation and how to respond to disruptions in their industry,” said Reed. “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 have the vision and have the overall experience and capabilities of the intelligent enterprise in the future. “

Competitive nip makes extension necessary

The expansion of Business Suite support was necessary as SAP began to feel increasing pressure from competitors who see an opportunity in customers’ reluctance to begin the S / 4HANA migration process, said Josh Greenbaum, director of Enterprise Applications Consulting.

SAP was starting to be punished in the field by competitors pointing fingers at 2025 and saying, “We’ll take better care of you than that,” Greenbaum said. “Many customers are either upgrading to S / 4HANA. only because of 2025, or, more importantly, found their CEOs and boards of directors wondering whether to switch to S / 4HANA or look to a competitor. “

SAP customers now have a better way to move to S / 4HANA because there is more certainty, he said.

“Some companies still use 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’s 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 was not healthy for anyone. Now instead of a cliff there is a bridge, and that can make a big difference to many businesses in terms of long term planning. “

However, the expansion of support for Business Suite 7 confirms the point made by some competitors: Legacy SAP customers have choices and an S / 4HANA migration does not need to be performed if the analysis business case is not there.

The Business Suite support extension gives the illusion of a customer concern, but only delays the problem, said Darren Roos, CEO of IFS, a competitor to SAP that provides manufacturing-focused ERP systems.

“Even with a two-year extension, there just aren’t the skills or resources available to migrate everyone before this deadline.” Roos said. “For many customers, there is still no real, quantifiable value in S / 4HANA, and most people who have already committed to reimplementation still do not have a current 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 deadlines that primarily benefit the vendor, Roos said.

Adding two more years of standard maintenance for Business Suite 7 does not address the larger problem that S / 4HANA struggles to deliver a rapid return on investment to many SAP customers, said Eric Robinson, vice president of group and general manager 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, and many SAP customers will be much better off maximizing the value of their current robust SAP systems with alternatives like third-party support which can offer support up to ‘at least 2035, “said Robinson.” This allows them to transfer funds to innovation initiatives that will generate competitive advantage and growth faster at much lower risk. Once S / 4HANA and others Competitive systems will have matured, SAP customers will be able to flexibly select the system best suited to their future business platform. “

Mary H. Martino