Over the years, SAP has continuously worked with customers to help them transition toward the intelligent enterprise and provided the tools and the support they need every step of the way.
The Intelligent Enterprise is centered around the digital core of SAP S/4HANA. Here, the company is seeing great adoption, with more than 14,100 customers that already have chosen it and several thousand customers deep in the process of adapting.
SAP aims to ensure customers can transition to SAP S/4HANA as efficiently and seamlessly as possible while leveraging the unique capabilities of the solution instead of only doing a technical upgrade.
Since every customer’s transformation journey is unique, and the usual customer approach is to indeed drive a fundamental change in their business models and processes, earlier this year, SAP decided to give clarity and extended commitments on maintenance for SAP Business Suite 7 and SAP S/4HANA. The extensions were made to better serve customers and give them the flexibility to take full advantage of the opportunities SAP S/4HANA offers.
Nearly three months since the initial announcement, Jens Bernotat, global vice president of Strategy and Ecosystem for Customer Solution Support and Innovation at SAP, discusses the strategy behind the extension, how the news was received, and why it is meaningful for customers.
Q: What were the details of the announcement and initial reactions from customers, user groups, and the market?
A: Back in February, we gave clarity and an extended maintenance commitment for SAP S/4HANA until the end of 2040 and for SAP Business Suite 7 until the end of 2027. With SAP Business Suite 7, customers can decide for an optional extended maintenance until 2030 to support strong momentum and flexibility for all our customers based on their respective individual paces and the complexities of their projects. We understand many of our customers are undergoing deep business transformation powered by the solution’s capabilities – something that takes a different amount of time for each company – and we wanted to provide them with true flexibility and confidence to plan for the future.
Overall, we’ve had a tremendous amount of positive feedback from analysts, user groups, and customers. It was clear that SAP would comment on the future maintenance timeline of SAP Business Suite 7 sometime soon, but I think our official commitment to SAP S/4HANA until at least 2040 came as a pleasant surprise. Though, for us, it’s what made the most sense. We know our customers want clarity on what the future holds for their individual transformation journeys, and through this long-term commitment, we’ve simply laid out what this looks like with a precise planning baseline.
In a time where businesses all over the world are experiencing unprecedented changes, why is it still important to think about a transformation to SAP S/4HANA?
We understand our customers are focused on keeping their businesses running as best they can in the current times. One thing we clearly see is that digital transformation is undoubtedly an important aspect to consider at the moment – both to keep businesses running and as the future direction many companies will take.
Driven by the current crisis, we’ve seen a massive push toward digital by businesses and consumers alike. You don’t have to look much further than today’s children, many of whom have so quickly adapted to online learning and collaboration due to stay-at-home orders. Now more than ever, digitalization is coming into everyone’s life at an accelerated rate as businesses look to digitize some of their physical processes.
The exciting thing is that SAP S/4HANA is made for the digital world and can help businesses adapt their existing processes for digital, which will give them a head start on their inevitable transformation journeys.
Why did SAP consider extending SAP Business Suite 7?
The clarity and extended commitment for SAP Business Suite 7 is clearly connected to the great momentum around SAP S/4HANA. As of February, when we announced the extension, we had 13,800 customers decided for SAP S/4HANA, with thousands of them already in the process of moving, and many more planning for it. Since then, the move to SAP S/4HANA has further accelerated.
We also noticed our customers did not just want a technical migration but wanted a deep understanding of the new capabilities SAP S/4HANA could provide that they could leverage to be more successful than ever before. A technical migration can be compared to how one might buy a new car which has a new tool such as a navigation system but still uses the car in the same way as the old one, without leveraging new capabilities. By extending SAP Business Suite 7, we’re able to give our customers time to best understand how they can utilize the full potential of SAP S/4HANA for maximum efficiency, just how one would by knowing how to use the navigation system in their new car.
Additionally, we also realized our customers needed clarity on what SAP Business Suite 7 would look like after 2025. Customers knew that next steps were going to be delivered in due time. Now customers have clarity on how they can orchestrate their transition from SAP Business Suite 7 to SAP S/4HANA.
What does the maintenance extension mean for customers? What are the new choices and benefits?
With these volatile economic times, we’re able to give our customers investment protection, flexibility, and more time to master their transition from SAP Business Suite 7 to SAP S/4HANA by 2027 with no contractual change or additional cost. Following this phase, we’re also offering a choice on how they can continue with maintenance for SAP Business Suite 7 if their transformation journey requires it. Customers needing additional support with a longer conversion phase to SAP S/4HANA will be able to extend maintenance support to 2030. This comes with a premium of two percentage points on the existing maintenance basis for core applications of SAP Business Suite 7 for all support offerings. For customers that do not choose extended maintenance by the end of 2027 but choose to carry on with SAP Business Suite 7, software systems will automatically be transferred to the customer-specific maintenance model. This includes problem solving for known issues at unchanged fees.
Overall, we want to ensure all our customers have the adequate amount of time and resources to effectively make their transition towards the intelligent enterprise.
If customers decide on a transformation plan, how does SAP support those on the journey?
There’s a specific prescribed process and methodology we follow for each customer as they move to SAP S/4HANA, whether they want a new net implementation or prefer to convert their existing system into an SAP S/4HANA system.
We help our customers transition by providing a set of accelerators and tools that define the business case for each customer – tools in SAP S/4HANA, how customers can drive ROI, deployment options, transitional features from SAP Business Suite 7, and the models customers need to drive success. By giving our customers comprehensive and standard best practices for each implementation, we’re able to provide a smooth and seamless journey to SAP S/4HANA and overall customer success.
We’re proud of how the extension announcement was received and are excited to see how this will enable our customers to innovate and further progress on their transformation journey toward the Intelligent Enterprise.
