Introduction – Why SAP Support Renewals Are a Cost Trap
SAP support renewals might seem like routine paperwork, but they are actually a major hidden cost multiplier in your SAP relationship. Every support renewal effectively locks in your maintenance base, and SAP banks on customers simply accepting renewals – letting support costs compound over time.
The good news is that a renewal isn’t just an administrative deadline – it’s a chance to reset the rules. Rather than rubber-stamping SAP’s quote, you can treat the renewal as a high-value negotiation event.
By questioning SAP’s “standard” renewal terms and leveraging your data, you can reduce fees, delay or cap uplifts, and even shrink your maintenance base.
The key is preparation and a willingness to challenge the status quo. For more insights, read our ultimate guide to Negotiating SAP Support & Maintenance: Reducing Costs and Improving Terms.
Understanding the SAP Support Renewal Cycle
To negotiate effectively, you first need to understand how SAP’s support renewal process works and why costs naturally rise.
Key points of the renewal cycle include:
- Renewal timing & auto-renewal: SAP typically sends renewal quotes 90–120 days before your support term ends. If you do nothing (i.e., don’t give notice), the contract auto-renews under the same terms for another term. In other words, you’ll be locked in for another year by default.
- Maintenance base growth: Every new license purchase permanently increases your maintenance base (the total license value on which support fees are calculated). SAP doesn’t let you remove licenses from support easily, so the base rarely shrinks. You could even be paying support on unused “shelfware” licenses for years.
- Annual uplifts: SAP applies an annual indexation (usually around 3–4%) to support fees. These “small” increases compound over time – a €2 million yearly support fee becomes roughly €2.25 million by year five at a 3% yearly uplift, even with no new licenses added.
For SAP, these standard mechanics quietly raise your support costs year after year — unless you actively intervene at renewal time.
Preparation Phase – How to Build Leverage Before Renewal
Successful negotiation starts well before the renewal quote arrives. Ideally, begin preparing 6–9 months in advance of your SAP support renewal date. Early preparation gives you time to gather data, build your business case, and engage SAP from a position of strength.
Key preparation steps include:
- Audit licenses and usage: Inventory all SAP licenses and determine which ones are actively used. Identify any redundant systems or unused modules (“shelfware”) that could be eliminated or removed from support.
- Benchmark support rates: Find out what other companies pay for SAP support (SAP’s standard is ~22% of license value, but some negotiate lower). Use these benchmarks to challenge SAP’s quote.
- Get third-party support quotes: Solicit a quote from an independent SAP support provider. Even if you won’t switch, having a credible alternative offer boosts your leverage with SAP.
- Align internally and get executive buy-in: Ensure your CFO, CIO, and other leaders support the plan (e.g., target a 0% increase or 15% reduction). SAP reps respond when they know executives are backing you.
Example Prep Language: “We’ve reviewed our SAP usage and spend and see a gap in value for the cost. We are even evaluating third-party support. We need to adjust these maintenance fees before renewal.”
Statements like this signal to SAP that you are treating the renewal as a deliberate choice, not a rubber stamp. It sets the expectation that concessions will be needed to secure your business for another term.
Negotiation Tactics to Reduce Renewal Costs
With your preparation done, it’s time to negotiate concrete improvements to your support terms. Don’t be afraid to ask for reductions and better conditions – SAP’s initial renewal quote is not the final word. Here are several tactics to consider using in your renewal negotiation:
- Global support discount: Request a lower support percentage for your entire maintenance base. For example, try to reduce SAP’s standard 22% rate down to 20%.
- Multi-year rate freeze: Negotiate no support fee increases for a set period (e.g., a 2–3 year freeze). This keeps your maintenance cost flat instead of compounding, saving money.
- Maintenance base recalculation: Ask SAP to reset your support fees based on your actual usage. Remove any unused licenses or systems from the calculation so you’re not paying for shelfware.
- Bundle new purchases for leverage: Align any new SAP license or cloud purchase with the renewal. The lure of new business can prompt SAP to grant support discounts or credits as part of the deal.
Always get any agreed concessions in writing. If SAP grants a freeze or discount, ensure the new contract or renewal document explicitly reflects it.
Example Clause: “SAP shall maintain the annual support fee at €X (current level) for the next 36 months, with no annual uplift or indexation during this period.”
Delaying or Limiting Uplifts
SAP often treats annual support fee increases of 3–4% (uplifts) as automatic. However, you can negotiate to delay or limit these uplifts:
- Cap or freeze increases: Instead of the usual 3–4% yearly hike, negotiate a cap (e.g., max 2% per year) or even a freeze (0% increase for 2–3 years).
- Link to service value: Agree to an uplift only if SAP delivers measurable service improvements to justify the higher fee.
- Require written consent: Don’t allow SAP to raise fees unilaterally. Any change should require your written agreement.
Example Clause: “Any price adjustment to maintenance fees requires prior written agreement by both parties and shall not exceed 2% per annum.”
This kind of clause explicitly blocks automatic increases beyond a low cap and forces SAP to negotiate any change with you first.
Use our SAP Support renewal checklist, SAP Support Renewal Checklist: How to Prepare, Negotiate, and Save Before You Renew.
Resetting or Reducing the Support Base
Reducing the maintenance base on which SAP calculates your support can yield significant savings. SAP often claims you cannot remove licenses from maintenance (“no partial termination”), but with the right strategy, you can still negotiate a lower base.
Here are a few tactics to attempt during renewal:
- Document system retirements: Show SAP a list of any SAP systems or modules you are retiring (with business justification). Argue that those components should no longer incur support fees.
- Request support realignment: Ask SAP to reduce your maintenance base to cover only what you actively use. Propose removing unused licenses or providing a credit for them instead of charging support.
- Leverage cloud plans: If you’re moving some systems to SAP cloud solutions, use that as leverage. For example, request reduced support fees or credits on the old licenses in exchange for committing to new cloud subscriptions.
Support Base Reduction Checklist:
- List inactive systems or modules: List all SAP systems/modules not actively used (and any licenses you could retire). These are your candidates for removal from support or maintenance credit.
- Calculate the savings: Figure out how much annual support expense is tied to those unused licenses (e.g., “We’re paying €300k/year for modules we don’t use”). This quantifies the value at stake.
- Submit a reduction request: Present a formal request to SAP (with your inactive license list and savings data), asking for a support fee reduction or a credit. Get any agreement in writing as an amendment.
Common Pitfalls & SAP Countertactics
Even with a solid plan, some traps can undermine your efforts. Watch out for these pitfalls and counter them:
- Accepting SAP’s first renewal quote without review. Fix: Always audit the quote andthe underlying license list in detail before signing off.
- Assuming support fees “can’t” be negotiated. Fix: Push back with data. Escalate to SAP executives and cite benchmarks or third-party options to challenge the “standard” rate.
- Treating a renewal as a low-level admin task. Fix: Involve your C-level sponsors and frame the renewal as a high-value negotiation. SAP responds when they see you mean business at the executive level.
5 SAP Support Renewal Tactics to Remember
- Treat every renewal as a negotiation event – not a routine task. Challenge the quote; don’t just roll over the support contract without seeking improvements.
- Push for overall support discounts or multi-year fee freezes. SAP often has wiggle room, especially for loyal or high-value customers who ask for a break.
- Recalculate and shrink your maintenance base whenever possible. Don’t keep paying for unused licenses – make SAP adjust your support to match actual usage.
- Cap annual uplifts at 2% (or eliminate them). Even small percentage caps can prevent big budget pain later. Negotiate those limits up front.
- Start planning your negotiation 6+ months before renewal. Early preparation with data and executive backing is the secret to regaining leverage over SAP’s renewal process.
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