SAP Concessions Offer On-Premises Customers More Flexibility

In a significant development for organizations relying on legacy SAP systems, the European Commission has accepted binding concessions from SAP regarding maintenance and support services. This follows an investigation into practices that potentially restricted customer choice and inflated service costs for on-premises ERP deployments.

The core issue concerned SAP’s approach to contracts—specifically whether customers were being locked into longer commitments than necessary. With these new agreements, businesses gain greater freedom to select support providers, terminate licenses under specific circumstances (like product phaseouts or business changes), and adopt more flexible pricing models like single-metric contracts. Reinstatement fees for returning customers have also been reduced.

Industry analysts note that while SAP likely views this as a necessary resolution, the concessions represent a shift in how the company manages its installed base. For customers still operating on-premises, these changes create new opportunities to optimize their IT spending and align support with evolving business needs.

Michael Bloch, executive director at DSAG (the German-speaking SAP User Group), commented that “many companies will benefit from this decision,” particularly those who haven’t yet migrated to the cloud. He noted that while third-party maintenance providers currently serve a niche market in Europe, these changes could spur greater adoption as customers seek alternatives to SAP’s standard offerings.

The implications extend beyond cost savings—customers now have more strategic options for managing their SAP investments and potentially extending the life of customized on-premises systems while selectively integrating cloud components where appropriate.

What’s your perspective on this development? Do you see it as a positive step toward greater customer choice, or do you believe it could create uncertainty in the market?

Tags: sap, europe, it-infrastructure, erp-systems, compliance