SAP Competitive Leverage: Seven Strategies Enterprise Buyers Use to Win in 2025–2026
SAP's dominance in enterprise ERP does not mean enterprise buyers are without leverage. Perpetual licence credits, third-party support evaluation, RISE with SAP unbundling, and strategic timing create a commercial position that consistently delivers 20–40% better outcomes for prepared buyers. This guide maps all seven leverage points and shows how to deploy them.
Executive Summary
SAP dominates enterprise ERP — and historically, that dominance has translated into a commercial relationship where SAP holds most of the leverage. Renewal conversations for S/4HANA, RISE with SAP, and associated cloud applications have typically been framed on SAP's terms: pricing, timing, and bundling structured to maximise SAP's commercial outcome. The enterprise buyer's leverage — though real — has historically been underutilised.
That dynamic is shifting. The 2025–2027 S/4HANA migration wave creates a commercial environment where enterprise buyers have genuine competitive and structural leverage that many are not deploying. Redress Compliance's SAP practice has found that organisations that enter SAP negotiations with a documented competitive strategy, structured commercial position, and clear alternative models consistently achieve 20–40% better commercial outcomes than those that negotiate on SAP's terms.
Perpetual licence credit is the single most under-negotiated element of S/4HANA deals. Organisations with significant on-premises SAP investments should be receiving credits worth 30–50% of their perpetual licence value against S/4HANA cloud subscription costs — but this credit is not disclosed proactively by SAP's account teams and must be explicitly claimed as part of the commercial negotiation.
This paper maps the seven leverage points available to enterprise SAP buyers in 2025–2026, provides competitive positioning strategies for the three most common SAP negotiation scenarios, and delivers a commercial framework for organisations approaching S/4HANA migration, RISE with SAP, or major contract renewal.
The 2025–2026 SAP Commercial Landscape
Several structural forces are converging in 2025–2026 to create a commercial environment that is more favourable to prepared enterprise SAP buyers than at any point in the past decade. Understanding these forces — and how to deploy them — is the foundation of effective competitive leverage.
The S/4HANA Deadline Pressure
SAP has committed to ending mainstream support for ECC in 2027, with extended support options available at additional cost until 2030 and 2033 for specific configurations. This deadline creates genuine urgency for organisations that have not yet committed to an S/4HANA migration path — and that urgency cuts both ways. SAP's commercial teams are under internal pressure to close S/4HANA migration deals before the 2027 window creates market uncertainty. Organisations that are credibly weighing their options — including third-party support, extended maintenance, or non-SAP ERP alternatives — have leverage that SAP's teams are motivated to address with commercial concessions.
The RISE with SAP Push
SAP is aggressively pushing RISE with SAP as its preferred cloud delivery model, bundling S/4HANA Cloud, BTP, and infrastructure into a single subscription. The RISE model obscures per-component pricing by design — making it difficult for buyers to evaluate whether the RISE bundle represents fair value versus alternative configurations. Organisations that unbundle RISE pricing and model the component costs separately — S/4HANA subscription, BTP credits, infrastructure, and managed services individually — consistently identify 25–40% cost reduction opportunities that are invisible in the bundled RISE proposal.
| RISE Component | SAP Bundle Position | Independently Modelable? | Typical Leverage |
|---|---|---|---|
| S/4HANA Cloud | Core subscription | Yes | 15–25% discount via competitive model |
| BTP Allocation | Included (undefined scope) | Yes (requires scope clarification) | Credit tier over-allocation |
| Infrastructure (Hyperscaler) | SAP manages, marks up | Yes (direct hyperscaler comparison) | 10–20% infrastructure arbitrage |
| Managed Services | SAP or partner | Yes (third-party comparison) | 5–15% managed services differential |
Perpetual Licence Credits: The Most Under-Used Lever
Organisations migrating from on-premises SAP deployments to S/4HANA cloud or RISE with SAP are entitled to apply their existing perpetual licence investment as credit against the cloud subscription cost. This credit mechanism exists because SAP's pricing model requires that organisations pay for S/4HANA cloud subscriptions that functionally replace software they have already purchased — perpetual licence credit is the mechanism SAP uses to avoid double-charging for equivalent functionality.
In practice, perpetual licence credits are not routinely disclosed or quantified by SAP's account teams. Organisations that do not explicitly request a credit calculation — and present their perpetual licence portfolio as a negotiating input — routinely pay full S/4HANA cloud subscription rates for functionality they have effectively already paid for.
How to Calculate Your Credit Position
The credit calculation begins with an inventory of all on-premises SAP perpetual licences being retired as part of the S/4HANA migration. The credit value is typically expressed as a percentage of the original licence value, applied against the first-term cloud subscription cost. Credit percentages vary by licence type, migration scope, and the contract structure of the RISE or cloud commitment — but Redress Compliance has secured credits equivalent to 30–50% of perpetual licence value in multiple recent engagements.
The perpetual licence credit calculation requires SAP to acknowledge the value of the existing licence investment and commit to a specific credit amount in writing. This acknowledgement is commercially significant — it establishes the baseline from which the cloud subscription cost is calculated and constrains SAP's ability to revise the credit position downward in subsequent negotiation rounds.
Third-Party Support as a Competitive Lever
Third-party SAP maintenance — provided by firms such as Rimini Street and Spinnaker Support — offers SAP customers the ability to exit SAP's maintenance programme at a significantly lower annual cost. Third-party support typically costs 50–75% less than SAP's 22% standard maintenance rate, covering security patches, regulatory updates, and technical support for existing SAP releases without the requirement to migrate to new SAP versions.
For S/4HANA negotiation purposes, third-party support serves primarily as a credible commercial alternative that changes SAP's negotiating dynamic. An enterprise that has formally evaluated third-party support, obtained pricing from one or more providers, and is prepared to execute that transition if SAP does not offer acceptable commercial terms is in a fundamentally different negotiating position than one that treats S/4HANA migration as inevitable.
How to Deploy Third-Party Support as Leverage
The deployment of third-party support leverage requires a documented evaluation — not just a verbal reference. Obtain formal pricing proposals from at least one third-party maintenance provider scoped to your current SAP landscape. Calculate the annual cost reduction versus SAP's standard maintenance rate. Present this calculation to SAP's commercial team as a documented alternative to the current maintenance arrangement. SAP's account teams have specific authority to respond to documented third-party support threats with maintenance discount offers and/or accelerated migration incentives — but this authority is only activated when the threat is formal and credible.
The Post-2027 Coverage Question
One of the most powerful aspects of third-party support as a negotiating lever is its post-2027 coverage capability. Rimini Street and Spinnaker Support provide security patches, regulatory compliance updates, and technical support for ECC and older SAP releases well beyond SAP's official end-of-mainstream-maintenance date — in many cases until 2030 and beyond. For organisations that are not yet ready to commit to a full S/4HANA migration by 2027, third-party support is not merely a negotiating tool but a viable medium-term operational strategy. Presenting SAP with a credible documented transition to third-party support through 2029 — with no dependency on SAP's extended maintenance programme — removes the single most powerful urgency lever in SAP's renewal toolkit: the 2027 deadline. Organisations that have formally modelled this path and can demonstrate the operational continuity it provides routinely unlock SAP discount authority that is otherwise unavailable.
Non-SAP ERP Alternatives: When to Use Them as Leverage
A complete SAP replacement with a non-SAP ERP is not a realistic alternative for most large enterprises — the switching costs, implementation risk, and business disruption are prohibitive. However, the evaluation of non-SAP ERP alternatives — Oracle Fusion Cloud ERP, Microsoft Dynamics 365, Infor CloudSuite — as competitive references for specific SAP workloads or business units is a legitimate commercial lever that is genuinely effective in SAP negotiations.
SAP's commercial response to credible non-SAP ERP competitive pressure is most pronounced in two scenarios: where the enterprise is considering a partial SAP replacement (migrating specific subsidiaries or business units to a non-SAP platform rather than a full group-wide S/4HANA migration); and where the enterprise has previously run a formal ERP evaluation that included non-SAP options, creating documented evidence of competitive pressure that SAP's account team must respond to.
Module-Level Competition
Even where full ERP replacement is not viable, module-level competition is an effective lever for specific SAP application areas. Workday and SuccessFactors compete directly in HR and HCM. Salesforce competes with SAP CX and S/4HANA Sales. Ariba competes with Coupa and Jaggaer at the procurement layer. Presenting a documented competitive evaluation for specific modules — with alternative pricing — gives SAP's commercial team a specific claim to match or exceed in their commercial response, rather than the abstract competitive pressure of a full ERP replacement threat.
Negotiation Timing: The Golden Window for S/4HANA Deals
The S/4HANA migration negotiation window is asymmetric: leverage is highest 18–36 months before the 2027 ECC mainstream maintenance deadline and diminishes significantly in the final 12 months. Organisations approaching the deadline without a signed migration agreement are in a demonstrably weaker position — SAP's commercial teams are aware of the deadline pressure and adjust discount authority accordingly.
The optimal timing for SAP S/4HANA commercial negotiation in the current market is Q3 2025 through Q2 2026. In this window, SAP's commercial teams have both the deadline motivation (to close migration deals before 2027 market uncertainty intensifies) and the quota pressure (fiscal year-end and quarter-end closing dynamics) that generate the highest discount authority. Organisations that time their formal negotiation to coincide with SAP's fiscal year-end — June 30 — or the final weeks of SAP's quarterly reporting periods have documented leverage advantages.
Seven Leverage Points: A Complete Reference
The following seven leverage points apply across SAP commercial negotiation contexts. Not all are relevant to every negotiation — the right combination depends on the organisation's specific SAP landscape, migration timeline, and commercial relationship with SAP.
1. Perpetual Licence Credit
As described above — document and claim explicitly. Non-negotiable for any migration from on-premises SAP to cloud or RISE.
2. Third-Party Support Evaluation
Obtain formal pricing from Rimini Street or Spinnaker. Present as a documented maintenance alternative. Activates SAP maintenance discount authority.
3. RISE Unbundling
Model RISE components separately. Present a point-by-point comparison of RISE list pricing versus component alternatives. Identifies 25–40% cost reduction opportunity.
4. Module-Level Competitive Alternatives
For Ariba, CX, or SuccessFactors — obtain competitor pricing. Deploy as specific module-level competitive pressure rather than abstract ERP replacement threat.
5. Fiscal Year and Quarter-End Timing
Time formal negotiation to coincide with SAP's June fiscal year-end or quarterly close. SAP's discount authority increases significantly in these windows.
6. Phased Commitment Structure
Negotiate phased commitments rather than single large deals. Phase 1 commitments at lower volumes — with phase 2 and 3 conditional — preserve future negotiation flexibility while allowing SAP to count the initial commitment commercially.
7. Independent Advisory Support
Engaging an independent SAP licensing adviser signals to SAP's commercial team that the negotiation will be professionally managed. SAP's account teams escalate their discount authority faster when they recognise that the buyer has experienced support — because they know the conversation will be detailed, structured, and persistent.
Three Negotiation Scenarios: Applied Competitive Strategy
Scenario 1: ECC Customer Approaching 2027 Deadline
Leverage: Perpetual licence credits, third-party support evaluation, fiscal year-end timing. Deploy all three simultaneously. Begin the negotiation 18 months before the preferred migration go-live date. The extended timeline provides the credibility to execute the third-party support alternative if SAP's commercial offer is inadequate.
Scenario 2: Existing S/4HANA Customer at Renewal
Leverage: Competitive module-level alternatives, RISE unbundling, phased commitment. At S/4HANA renewal, the perpetual credit lever is no longer available. Competitive pressure from specific module alternatives (Workday, Salesforce, Ariba competitors) and independent RISE component pricing analysis are the primary commercial tools.
Scenario 3: RISE with SAP Customer at First Anniversary
Leverage: BTP consumption model, RISE component repricing, AI service inclusion. RISE customers approaching their first anniversary should review actual BTP consumption versus committed levels, model the component-level pricing in the renewal, and negotiate AI service inclusion terms explicitly. SAP's renewal proposals for RISE customers typically reflect incremental uplift on the initial deal rather than a re-optimised commercial position.
Case Study: Global Energy Company, £8.2M Saving on RISE with SAP
A global energy company with 18,000 SAP users engaged Redress Compliance to support their RISE with SAP negotiation. SAP's initial RISE proposal totalled £22.4M over five years, covering S/4HANA Cloud, BTP, and managed services.
The Approach
Redress unbundled the RISE proposal into its component elements, modelled infrastructure costs independently using the organisation's Azure and GCP volume pricing, quantified the perpetual licence credit on the ECC licences being retired (42,000 professional users across two landscapes), and obtained competitive pricing from Oracle Fusion Cloud for two of the organisation's non-core business units.
The Outcome
The perpetual licence credit claim reduced the effective first-term subscription cost by £3.1M. The infrastructure unbundling and managed services competitive analysis produced an additional £2.8M reduction. The Oracle competitive reference for the two business units generated a further £2.3M in S/4HANA subscription discount. Total five-year cost reduced from £22.4M to £14.2M — a saving of £8.2M (37%). The commercial structure included phased credit commitments, a capped renewal uplift of 3% annually, and explicit AI service inclusion provisions covering Joule through the full five-year term.
90-Day Competitive Leverage Action Plan
List all on-premises SAP perpetual licences being retired in the migration. Request SAP's formal credit calculation and compare against an independent estimate of credit value.
Request formal pricing from at least one third-party maintenance provider. Calculate the annual cost differential versus SAP's current maintenance rate.
Model each component of SAP's proposal independently — S/4HANA subscription, BTP, infrastructure, managed services. Identify the components with the highest competitive pricing differential.
Target SAP's fiscal year-end (June) or Q4 close (April–June) for the formal negotiation. Enter with the complete commercial position — credits, alternatives, unbundled model — presented as an integrated commercial ask.
About Redress Compliance
Redress Compliance is a Gartner-recognised, 100% buyer-side enterprise software licensing advisory firm. We have no commercial relationships with any software vendor — our only client is the enterprise buyer.
Our SAP practice specialises in S/4HANA migration commercial strategy, RISE with SAP negotiation, and competitive leverage deployment for enterprise organisations across EMEA and North America.
SAP Licensing Knowledge Hub · All White Papers · Enterprise Spend Navigator Newsletter