IT leaders seek alternatives for SAP, VMware, and Java

CIOs are increasingly looking to shake up their enterprise software portfolios, and no software suite is too large or too entrenched to be off limits for potential replacement.

Driven by increasing licensing costs, end of vendor support, and the promise of AI-coded alternatives, IT leaders are adding several major enterprise software packages to their replacement lists, including VMware, SAP’s ERP suites, and Oracle’s Java. Representatives of those three companies didn’t respond to requests for comment.

One factor driving the trend is the ever-improving functionality of AI-powered coding tools, leading some CIOs to explore building their own software in targeted cases instead of relying on outside vendors.

The potential for AI coding tools to replace SaaS suites drove the so-called SaaSpocalypse, a sharp decline in the stock prices of several SaaS vendors earlier this year. Replacing SaaS products with AI-coded software has largely remained theoretical, at least so far, but a few IT leaders have begun to experiment with the possibility.

At the same time, some software vendors have pushed customers away with more expensive pricing models or the end of support for enterprise mainstays.

Broadcom raised prices significantly after purchasing virtualization market leader VMware nearly three years ago, and a recent survey by third-party support vendor Rimini Street found 90% of IT leaders at VMware customers looking for alternatives.

SAP meanwhile has announced the end of support for its popular, perpetually licensed ECC ERP package and is pushing customers to adopt its subscription-based S/4HANA suite. SAP’s ever-shifting end-of-customer-support deadline has prompted customer backlash.

While VMware and SAP are at the center of the software-replacement bullseye, some CIOs are keeping all options open in hopes of breaking away from ever-increasing software subscription prices.

About 22% of IT leaders are actively reconsidering core enterprise systems such as ERP and CRM, according to research from IT analyst firm Gartner. But many are also actively reassessing niche and point software solutions, especially low-complexity edge applications, says Patrick Connaughton, chief of research at Gartner.

“IT leaders aren’t planning wholesale replacements of core systems yet,” he says, but that’s likely to change in coming years, he adds, with more than nine in 10 IT leaders expecting disruption in the software market. AI agents, for example, are replacing expensive UIs and seat-based pricing, and AI-enabled coding is prompting IT leaders to rethink whether they need to buy enterprise software, he notes.

“Most IT leaders expect their current software models to be upended as customer fatigue with vendor lock-in, bloated suites, and diminishing returns drives a shift away from point solutions,” Connaughton says. “A fundamental buy-versus-build inversion is under way as rapid adoption of agentic coding tools enables organizations to build custom alternatives faster and at lower cost.”

The incumbent advantage

Still, incumbent vendors have advantages, with institutional trust, regulatory moats, and data lock-in keeping most CIOs from making major replacements in the next three to six years, Connaughton says.

Nevertheless, IT leaders see some momentum toward a great software replacement.

John Burns, senior director of finance systems and transformation at equipment rental firm Herc Rentals, eyes ERP as a huge target for replacement, with finance departments often paying twice, once in license fees and again in workarounds. Other finance software tools are also on Burns’ hit list.

SAP ending mainstream maintenance for ECC in 2027 is a significant driver for IT leaders to look for alternatives or for third-party support, Burns says.

“Price increases and end-of-support drive the decision,” he adds. “AI agents aren’t replacing ERP yet. An agent needs a clean general ledger to read from and write to. The ERP underneath stayed.”

Burns has mitigated Herc Rentals’ reliance on its ERP by adding other tools around it. “I surrounded the ERP with best-of-breed tools so they could unplug the ERP on their timeline rather than worry about the product sunsetting,” he explains.

But extricating yourself from a major software vendor is a huge process, Burns admits. Companies need to map data, redesign controls, and retain staff, and before switching vendors, CIOs should ask their CFOs how many business disruptions they’re willing to endure, he advises. If the answer is zero, the CIO may want to reconsider the switch.

“Software companies know the aggravation cost of switching is high, and change is the hardest part,” Burns says. “On every ERP and enterprise performance management migration I’ve run, the license was the smallest line item.”

Kevin M. Coles, founder of factional CIO and CTO firm Coles Technical Group, believes VMware also has a huge target on its back, but other vendors are not immune.

“The licensing change turned a quiet line item into a board-level number,” he says. “Close behind is the long tail of SaaS that’s adding AI tiers and raising prices at renewal, often for features nobody asked for.”

Coles agrees with Burns’ observation that switching can lead to major headaches.

“Customers stay even when they say they’ll leave because the license is rarely the real cost of switching,” he says. “The real costs are the integrations nobody documented, the reports finance depends on, the staff who only know one console, and the year of running two systems side by side. Most surveys measure frustration, not switching cost, so the numbers overstate how many will actually move.”

CIOs should consider how long a switch will really take and the cost of a day of disruption to the business, he recommends. “If nobody can answer, you’re not ready to negotiate, let alone migrate,” he says.

IT leaders should also determine whether the replacement software is actually independent or if it leans on the same identity, cloud, or integration layer they’re trying to reduce their dependence on, he adds.

“The most useful thing a CIO can do is run that exercise now, before the renewal notice arrives,” Cole says. “Even if you stay, a credible exit plan is the best leverage you’ll ever have in the negotiation.”

IT leaders also often talk about replacing their ERP and CRM vendors, but don’t often pull the trigger, Coles adds.

CRM on the list

Pino Soro, chief business transformation officer at low-code app development vendor Quickbase, sees both ERP and CRM systems on the hit list.

“CIOs are taking a harder look at large, expensive platforms where costs keep going up, but flexibility hasn’t kept pace,” he says. “ERP and CRM systems are natural starting points, particularly for organizations that are locked into a vendor or are paying for features their teams barely use.”

Many CIOs are also trying to consolidate their tech stacks, Soro says. “When teams are paying for three or four different tools to manage what could be a single workflow, that’s an obvious place to start questioning the spend,” he adds. “With AI making it easier to build software, CIOs have more options to consolidate, customize, or build their own solutions than they did even a year ago.”

In addition to VMware and SAP, another target for replacement is Oracle’s Java, says Brad LaPorte, strategic advisor at IT advisory firm Lionfish Tech Advisors. All three are on the target list for similar reasons, he adds.

“The vendor changed the deal, not the software,” he says. “VMware changed the price and the packaging. SAP put a clock on ECC. Oracle switched Java to per-employee pricing in 2023, which means a subscriber now pays for staff who’ve never opened a Java app.”

But wanting out and getting out are two very different things, LaPorte stresses. In a survey released in February by cloud management software vendor CloudBolt, 86% of IT decision-makers at large North American companies said they were shrinking their VMware use, he notes. Yet, just 2% of respondents had shifted three-quarters of their environments away from the virtualization giant.

LaPorte compared switching enterprise software vendors to moving between houses.

“Java is a studio apartment — pack a few boxes and you’re out,” he says. “VMware is the house you’ve lived in for 15 years, with wiring from half your business running through the walls, and getting out means opening every one of those walls while keeping the lights on. SAP is the house where the most likely next address is SAP’s newer building, on SAP’s schedule.”

While many companies have looked at alternatives, detangling themselves from a software suite like VMware can take up to four years, LaPorte notes.

“They stay because moving is harder than complaining, and most of the reasons to stay are rational,” he says. “Nobody moves out of a 15-year house in a weekend.”

For IT leaders considering a switch, LaPorte recommends first identifying all their use cases and reasons for the change.

“Inventory before you price,” he says. “Map every workload, every integration, and every admin account that touches the platform, and only then price the exit, because most exit estimates I’ve seen cover the license and miss the wiring entirely.”

IT leaders should also plan for a half-moved house, to extend LaPorte’s comparison to moving between homes.

“For two to four years you’ll run two estates, with two patch cycles, two sets of privileged accounts, and two attack surfaces,” he says. “The old house is the one that gets broken into; because everyone’s attention has moved to the new address, nobody is watching the doors at night, and everybody on the project assumes the locks are somebody else’s job.”