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Dive Brief:
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SAP extended an olive branch to existing customers grappling with complex ERP migrations, offering business continuity support services through 2033, executives said during the company’s Q4 2024 earnings call Tuesday.
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The company stood firm on sunsetting maintenance support for SAP ERP Central Component on-premises solutions in 2027 and ending extended services in 2030. It will, however, add a private cloud subscription transition option for enterprises that need more time to complete their RISE with SAP migration.
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Transition services are not an extension of on-prem support, but the option will be available to all customers who commit to a RISE with SAP migration beginning in 2031. “We don’t want to leave the customers behind,” SAP CEO Christian Klein said. “We see acceleration in the cloud, but it’s really reaching with a helping hand to a very few large customers who need this offering to fully transform and migrate to the cloud.”
Dive Insight:
SAP is engaged in a delicate dance as it tries to induce customer migrations without pushing them away. The company doubled down on public cloud last year, adding financial incentives and technical support services to the RISE with SAP and GROW with SAP ERP migration programs and spending billions on an organization restructure.
The ongoing efforts moved the needle as the company’s cloud revenues increased 25% year over year to 17.1 billion euros ($17.8 billion), helping to drive double-digit total revenue growth for the third consecutive quarter. “We more than doubled cloud revenue since 2020 and raised it to half of SAP’s total revenue,” Klein said.
SAP’s cloud ERP suite was a core driver of growth, increasing 34% in 2024 and accounting for 84% of total cloud revenue, according to CFO Dominik Asam, who also spoke during the call.
In addition to the transition services, SAP plans to expand its RISE with SAP offering this year, adding the LeanIX IT management solution, Signavio business process software suite and WalkMe digital adoption platform to the migration package.
The company will also introduce licensing options that let customers upgrade cloud solutions “across the whole SAP business suite, all without additional negotiations,” Klein said.
As part of SAP’s transformation, the company created a migration division last year helmed by board member Thomas Saueressig, who served as CIO and global head of IT services prior to joining the board in 2019.