- Zach Frye
- Reading Time: 4 minutes
Key Insights on Leadership Changes, ECC Support Extension, and AI Investments to Strengthen Your SAP Negotiation Strategy
Yesterday, SAP conducted their 2024 earnings call and 2025 business outlook, revealing timely information that SAP customers can use at the negotiation table. While SAP’s performance in 2024 was strong, primarily backed by increased Cloud revenue and increased adoption of RISE, customers main takeaway should be directed towards several key announcements SAP made. These announcements include executive leadership changes, extending ECC maintenance support to 2033 and the continuous evolution of SAP’s Business AI offering.
These announcements will likely have a material impact on organizations’ cloud transformation leverage and relationship opportunities with SAP. We’ve captured our most critical insights from SAP’s latest announcements below that IT Executives and Procurement leaders should be aware of as they continue planning for 2025.
SAP’s Latest Announcements That Customers Should Be Aware of:
1. SAP Leadership Changes and Effects on Customers Relationship
During the earnings call, SAP CEO Christian Klein announced a series of executive leadership changes. These changes come off the heels of several prominent leaders departing the organization in 2024. Most notably, CTO Juergen Mueller, CRO Scott Russell and CMO Julia White all left SAP last year. These departures transpired during a significant organizational restructure of approximately 9,000 positions, which was centered around development and market expansion of SAP’s AI business practice.
Klein announced the position of Chief Revenue Officer will be co-lead by Jan Gilg (currently President & Chief Product Officer for Cloud ERP), who will oversee SAP Americas, and Manos Raptopoulos (currently President SAP EMEA), who will oversee the SAP EMEA, APAC & MEE regions. It will be important to monitor what impact SAP’s decision to name Gilg the CRO in the Americas may have on customers’ relationship with Lloyd Adams, President of SAP North America, who has served a prominent role in sponsoring several organizations’ Cloud transformation efforts.
Chief AI Officer Phillip Herzig will maintain his current title while also assuming the responsibility of Chief Technology Officer. In addition, Sebastian Steinhauser has been appointed to Chief Operating Officer and will be joining the SAP Executive Board while Ada Agrait has been promoted to Chief Marketing Officer. Finally, Thomas Saueressig, Head of Customer Services & Delivery, has been granted a 3-year extension on SAP’s Executive Board. This is particularly notable as we’ve seen Saueressig be more directly involved with SAP RISE customers’ evaluation processes.
Given the significant number of changes, we’d anticipate there to be a domino effect on other SAP leaders, including executive sponsors for certain companies. Therefore, it will be important to be aware of potential impacts on your relationship with SAP’s leadership.
2. 2033 ECC Maintenance Extension
After facing increasing pressure from customers who are becoming more aware of the RISE migration complexities, and growing anxiety in the market related to SAP’s end of support for ECC licenses, SAP announced an extension of ECC support from the end of 2030 to the end of 2033. This offering, which SAP named “SAP ERP, Private Edition, Transition Option” will allow for additional timing and flexibility for Cloud migrations and ensure organizations are running a compliant and supported landscape moving forward.
SAP will be marketing this extension program as a solution for large, multinational organizations running several ERPs that are already committed to RISE and simply require additional time to transform and consolidate fully onto RISE. However, after receiving numerous questions on this subject during the earnings call, Klein clarified that “legally,” SAP would be offering the 2033 Maintenance Support Transition extension to all their customers. SAP stated additional program details for this extension would be disclosed later this year.
Organizations must understand SAP will continue to manufacture the business case to move to RISE and will not waiver off annual support fee increases, termination of Business Suite 7 by the end of 2027 and applying additional charges for extended support beyond 2027. SAP will also likely force organizations to pay a premium for the newly announced transition option extension through 2033. It’s important to have a comprehensive RISE evaluation strategy, that considers the latest update around ECC support being extended.
3. Doubling Down on Business AI
SAP made a significant effort to highlight the success stories of their newly launched AI Business platform, with growing excitement for additional expansion of their AI offerings in 2025.
To reflect on 2024, SAP hired over 9,000 associates who are fully dedicated to the strategic growth of their AI practice. These investments led to over 130 Generative-AI use cases in 2024 and the integration of over 1,300 skills into Joule, an AI solution that automates 80% of end users most used activities. SAP disclosed that 50% of their customers’ Cloud Orders in 2024 included SAP AI functionality.
Looking ahead to 2025, SAP’s working to capitalize on solving customers’ challenge of fully accessing internal and external data to reap the full benefits and value of their AI offerings. SAP represented that IT organizations spend roughly 50% of their budget on data and analytics, often falling short of realizing the potential of the data and thus missing out on the capabilities AI can offer with said data. SAP believes Joule, which they deemed to be the “Super Orchestrator” of SAP Business AI, will address organizations challenges capturing data.
Despite acknowledging customers’ uncertainty in the value that AI Business presents to the market, SAP will double-down their efforts and investments in this space. Organizations must be prepared to evaluate the level of flexibility, security measures and overall value SAP’s AI functionality presents, and be aware of the levers SAP will pull with AI to drive faster RISE adoption.
Commercial Considerations for SAP Customers Cloud Migrations
SAP was transparent about aggressively pushing one-time migration credits, as opposed to being flexible with enhanced discounts for their Cloud licenses. This behavior is aligned to what we’ve seen SAP provide in the market, particularly in the second half of 2024.
Klein acknowledged these migration credits will apply to both organizations who’ve already partially migrated to their cloud platform, and to organizations that have yet to initiate their migration. As SAP’s Cloud Strategy continues to evolve and their leverage over customers is increasing, SAP customers should be aware of the expanded opportunity to capitalize on their incentive programs, driving additional commercial value for customers cloud transformations. However, it’s important that organizations are aware there’s additional commercial negotiation opportunities with SAP beyond their credit offerings that can drive additional value and mitigate risk.
In the coming weeks, UpperEdge will be releasing a series of targeted content designed to spotlight SAP’s evolving go-to-market strategy, the impacts to your SAP relationship, and both the benefits and risks to your technology roadmap. We’ll also provide additional perspective into what your peers in the market are doing relative to their SAP Cloud strategies and integrated evaluations.
For even more information on how UpperEdge can help you navigate SAP’s latest announcements, 2025 strategy and your upcoming negotiations, Contact Us for tailored insights based on your needs or explore our SAP Advisory Services.
