Nearly half of SAP ECC customers may stick with legacy ERP beyond 2027

Attendees of SAP’s Sapphire conference in Florida in mid-May heard a lot about the vendor’s umbrella Business Suite and its Joule AI agents, but the German software giant made little mention of customer uptake of its flagship ERP, S/4HANA.

SAP executives were mum on the company’s progress to convince customers to move from its legacy ECC ERP to S/4HANA, with the end of support for ECC coming at the end of 2027 for many users.

It’s no surprise that SAP leaders avoided talking about the migration numbers, says Fabio Di Capua, a vice president in the technology and service providers team at Gartner.

“I’m a skeptical analyst, so when I see vendors not reporting numbers immediately, they are not good,” he says. “Because if they were good, they will be the first one to shout, ‘We did it, everybody.’”

S/4HANA uptake: By the numbers

At the end of 2024, only 39%, or about 14,000, of the 35,000 SAP ECC customers had migrated to S/4HANA, according to Gartner. At the current rate of migration, Gartner projects there will still be 17,000 holdouts, or nearly half of the ECC customer base, by 2027.

More than a third of ECC customers, 13,000, will remain with the legacy ERP in 2030, the analyst firm projects.

Mickey North Rizza, vice president of the enterprise software group at IDC, is a bit more optimistic about the migration numbers, but just barely. She expects 40% to 45% of ECC users to remain with the older ERP through 2027.

SAP released the first version of S/4HANA in late 2015, but even with SAP’s RISE guided transformation package, launched in January 2021, migration has been steady but slow, Di Capua notes. SAP also launched its GROW transition program for medium-sized organizations in March 2023.

“When SAP tried to make people move to RISE, we told them, ‘You convinced less than half of your clients to migrate in 15 years,’” he says. “‘How can you think you will migrate the next 50% in five years?’”

The complexity of ECC installations, many heavily customized, and the cost of migration are the two big barriers, Di Capua says. While migration can cost as little as $2 million, it can run up to $1 billion for large enterprises with complex installations.

Gartner has worked with clients anticipating three- to seven-year migration projects. In many cases, SAP customers are looking at a compete redesign of their processes, a change management effort, and in some cases, an additional human capital or procurement solution, he says.

Third-party helpers

Many SAP customers are considering third-party support for ECC or counting on SAP extending its own deadlines, after its timeline has already slipped a couple of times. In February, SAP announced a new migration option, called “SAP ERP, private edition, transition option,” which will allow some large customers to continue using ECC until 2033.

Some SAP customers are also turning to third-party vendors for some ERP functionality, including human capital, procurement, and supply chain, Di Capua says.

IDC’s North Rizza gives credit to SAP for extending the support timeline, and launching new migration tools, after recognizing customer difficulties with the transition.

“They started to recognize where the organizations were having problems, and one of them was around the fact that they can’t move their entire organization off of the old product set to the new product set,” she says. “So, what they’re trying to do is help the clients understand that there’s a pathway helping them do this.”

SAP: All is good

SAP, for its part, says it sees high demand for its products and for cloud services, including the cloud version of S/4HANA. In the first quarter of 2025, the company’s cloud revenue was up about 26% from the previous year, notes Jan Gilg, chief revenue officer and president for SAP Americas and its Global Business Suite.

The good news for SAP is that two-thirds of its new cloud customers are new to the vendor, notes Mark Moerdler, managing director and senior research analyst at Bernstein Research.

Gilg also disputes Di Capua’s observation that SAP customers are turning to add-on, third-party ERP services.

“To the contrary, standalone line-of-business applications are becoming increasingly obsolete in the era of generative AI,” Gilg says in an email forwarded by SAP PR. “We are seeing customer demand for an integrated suite of cloud solutions because the cloud has changed the game of how data is accessible.”

Several companies, including IBM, also report huge benefits from migrating to S/4HANA. In IBM’s case, the tech giant has seen a 30% reduction in infrastructure-related operational costs since completing its migration to SAP’s cloud ERP platform in July 2024.

Still, SAP appears to be fighting an uphill battle as it tries to convince the remaining ECC users to move to its newer ERP, analysts say. As SAP tries to move customers to its cloud services, some ECC users have pushed back due to pre-existing contracts with hyperscalers, says Akshara Naik Lopez, a senior analyst in the enterprise apps and services group at Forrester.

“Many organizations use many applications, and they migrate those loads to AWS or Azure for speed,” she says. “They have these massive contracts, and people want to add and host S/4HANA on these hyperscalers through those contracts.”

Customer frustrations have led to SAP offering heavy discounts starting around the second quarter of 2024, Naik Lopez says. She projects that more than 40% of ECC customers will still be with the legacy ERP beyond 2027.

Many ECC users, especially those that have kept up with version updates and other fixes, seem to feel no pressure to change, she adds.

“If you ask these companies, they will say their ECC environment is very robust, very stable,” Naik Lopez says. “Support from SAP is ending for the product, but it does not mean that the ECC environment is, all of a sudden, going to stop working, or they are going to have some new issues that clients never face. The environment will behave exactly the same as before.”