SAP is moving entirely to the cloud, much to the dismay of on-premise customers. A financial incentive package that can reduce transformation costs by up to 50 percent should convince them.

Last year, ERP specialist SAP announced it was moving to the cloud, much to the dismay of its on-premise customers. SAP wants to migrate its customers from their existing SAP system to SAP S/4HANA by the end of 2027. To get its dissatisfied on-premise customers on board, SAP is offering an incentive package that can reduce transformation costs by up to 50 percent. The company wants to support its customers in the transition to the cloud.

On-prem customers are at a disadvantage

Last year, the ERP specialist SAP announced that it wanted to bring all customers into the cloud. Customers running S/4HANA on their own infrastructure were not happy about the “forced” transition to the cloud. In addition, such a migration to the cloud costs months and hundreds of thousands of euros or more. SAP initially gave its customers the choice between S/4HANA in the cloud or on-premise, but now it appears that customers who chose the latter are missing out on functionality.

Many customers were unhappy with this preference for customers who were already in the cloud or moving to the cloud. Although SAP will continue to support its on-prem customers until 2040, new innovations will only be implemented in the cloud. However, this creates a competitive advantage for customers in the cloud because SAP has never informed them of the choice of whether or not they have access to new features.

Financial compensation

The cloud switch caused great dissatisfaction among on-prem customers, but SAP is now responding with financial compensation. “To recognize SAP customers’ investments and help offset the costs of migration and transformation, SAP is announcing a limited-time offer that can reduce migration costs by up to 50 percent and accelerate time to value,” SAP said.

With this incentive package, SAP would like to offer its on-premise customers financial compensation for the migration and transformation costs when moving to the cloud. The RISE with SAP Migration and Modernization Program is an important step in enabling the transition to the cloud.