SAP adoption surges in Europe as enterprises embrace cloud

Enterprises in Germany, Austria, and Switzerland are accelerating their transition to cloud-based ERP solutions, with SAP playing a key role in their digital transformation strategies.

Besides, there has been a significant rise in SAP S/4HANA and cloud adoption, reflecting a broader shift toward scalable and efficient IT infrastructure, according to a report by Germany’s largest SAP user group, DSAG.

This trend aligns with broader European movements, where companies accelerate digital transformation efforts and seek greater operational efficiency through advanced technologies.​

IT budgets expand, SAP investments show mixed trends

The report indicates that 40% of companies in the DACH region (Germany, Austria, Switzerland) are increasing their overall IT budgets, while SAP-specific investments are rising for 47% of enterprises.

However, there is a notable decline in organizations maintaining a stable SAP budget, with only 23% keeping spending unchanged compared to 32% in 2024. Meanwhile, 25% of companies reported a decrease in SAP investments, up from 19% last year, suggesting that some firms are reassessing their spending strategies.

“The decline in stable SAP budgets and the rise in reduced spending could indicate cost-cutting measures, migration delays, or consolidation of SAP systems,” Jens Hungershausen, DSAG Chairman of the Board said in the study. “However, the increased participation of larger enterprises in this year’s survey may have also influenced the budget trends.”

S/4HANA cloud gains traction

According to the study, which was commissioned by both DSAG and SAP and included responses from 243 participants, SAP S/4HANA continues to be a focal point for enterprises, with its cloud versions seeing significant growth.

While 51% of companies still use SAP Business Suite (down from 68% in 2024), S/4HANA On-Premises adoption remains steady at 42%. Notably, S/4HANA Private Cloud usage has surged to 33%, up from 11% last year, while S/4HANA Public Cloud adoption doubled to 13%.

Investment trends also reflect a clear shift toward cloud solutions, with 68% of enterprises planning to invest in S/4HANA Cloud — an increase of 50% compared to last year. Conversely, S/4HANA On-Premises investment plans have dropped slightly to 42%, and SAP Business Suite investments have stabilized at 23%.

This shift towards cloud-based ERP solutions is evident even in the US. A report by the Americas’ SAP Users’ Group (ASUG) highlights that private cloud environments are the leading choice for those running SAP S/4HANA, with 42% of respondents either already using a private cloud or planning to within the next two years.

“The momentum towards cloud-based ERP solutions is evident, driven by enterprise-wide digital transformation strategies and the need for scalable IT infrastructure,” Hungershausen noted. “Larger companies, in particular, are leading the charge as they leverage cloud solutions to modernize their operations.”

Growing confidence in RISE with SAP

SAP’s RISE with SAP program, designed to facilitate cloud migration, has gained considerable traction. This year, according to the study, which was conducted between January and February 2025, 48% of respondents are either using or planning to use RISE with SAP, compared to just 16% in 2024. Moreover, companies expressing no plans to adopt RISE with SAP have dropped from 61% last year to 23%.

GROW with SAP, an offering aimed at mid-sized businesses, is also witnessing increasing interest with 17% of companies now considering it, up from previous years. However, 38% still find the offering irrelevant to their operations.

Similarly, ASUG’s research indicates that RISE with SAP S/4HANA Cloud, private edition, is the most widely utilized RISE option among its members, with 59% planning to leverage it in the next year or considering it for future use.

Strategic cloud migration is still key

Despite the strong push toward cloud-based solutions, the DSAG report underscores the importance of a balanced approach to cloud adoption. Many enterprises remain cautious, ensuring that cloud migration aligns with their strategic goals rather than being a forced transition.

This cautious approach is echoed in the ASUG report too, which notes that while SAP S/4HANA migrations remain complex, organizations are having an easier time compared to previous years. Proper resource allocation, internal support, change management, and business-wide collaboration are identified as keys to successful migrations.

As enterprises in the DACH region continue to embrace digital transformation, SAP’s role remains pivotal. The shift towards cloud-based solutions is accelerating, but the need for tailored, business-driven migration strategies will be crucial in shaping the future of SAP adoption.