SAP License Swap & Trade-In Programs: How to Turn Unused Licenses into Real Value

SAP License Swap & Trade-In Programs: How to Turn Unused Licenses into Real Value

Why License Swaps and Trade-Ins Matter

SAP customers often carry millions of dollars in unused license value (“shelfware”). These idle licenses still incur maintenance fees, effectively tying up budget in assets that deliver no benefit.

SAP’s policy is “no refunds” on unused licenses – once you buy, you pay support indefinitely unless you take action. But with the right strategy, you can reclaim that trapped value instead of letting it drain away.

Insight: Every unused SAP license is trapped capital – but under the right conditions, it can be converted into useful entitlements or cloud credits. In other words, shelfware doesn’t have to stay shelfware.

SAP won’t volunteer to give your money back. Still, they offer programs and negotiation levers that allow you to swap or trade in unused licenses for something your organization actually needs. The key is knowing when and how to use these programs to turn idle licenses into real value.

SAP tends to discourage outright cancellations (they don’t want to lose maintenance revenue), but they will work with you to redirect your investment. By leveraging license swap and trade-in programs, you can exchange redundant licenses for new software or turn maintenance dollars into cloud credits.

The result: you regain value from sunk costs and avoid staying locked into shelfware. The following sections explore the options available and how to execute these tactics for maximum benefit.

Read our comprehensive guide to SAP License Optimization Strategies: Cut Costs Without Cutting Value.

What Are SAP License Swap and Trade-In Options?

SAP allows some flexibility to repurpose your existing licenses through structured programs or custom negotiations.

Here are the primary options for swapping or trading in licenses:

Internal License Swap: This is a direct like-for-like exchange of products under your current contract. For example, you might swap unused Supplier Relationship Management (SRM) or Product Lifecycle Management (PLM) module licenses and receive equivalent rights for a product you need, like additional S/4HANA modules or a new SAP engine.

SAP must approve the swap, and they will typically ensure the swap doesn’t reduce your overall spend (they want to see it as budget-neutral for them). Internal swaps are often negotiated during renewals or large expansion deals.

The benefit is that you can avoid paying for entirely new licenses by utilizing the value of what you already purchased but aren’t using.

Cloud Extension Policy (CEP): SAP’s Cloud Extension Policy is a formal program to help customers move to cloud solutions without wasting their on-prem investments. It lets you convert a portion of your annual on-prem maintenance into cloud subscription credits.

In practice, you agree to terminate certain on-prem licenses (or drop their support), and in return SAP gives you a credit that discounts your new cloud purchase. The credit is often less than dollar-for-dollar; for instance, you might get credit worth 70% of the maintenance value of the retired licenses.

You also must commit to a multi-year subscription (typically 3–5 years) for the cloud products. CEP is a way to fund cloud adoption using your existing budget, ensuring SAP retains you as a customer. Keep in mind: you won’t receive any cash refund, and you can only apply the credit toward SAP cloud services (not third-party products).

Migration Incentives / Trade-Ins: During major transitions, such as moving from ECC to S/4HANA or entering a RISE with SAP contract, SAP often provides migration conversion programs.

This is akin to a trade-in deal: you “trade in” your old perpetual licenses and maintenance, and SAP credits their value toward the new licenses or subscriptions you’re buying. One approach is contract conversion – essentially ripping up your old contract and signing a new one, with credits for your legacy licenses baked in.

The advantage is that you can drop or swap products in the process (e.g., get rid of licenses you don’t need in the new environment). SAP will typically insist that your total annual spend stays the same or increases after the conversion – they won’t approve a deal that reduces their revenue.

These programs are useful when you’re modernizing your SAP landscape, as they prevent paying for two systems at once and let you carry forward the value of past investments.

Read more about optimization, SAP License Reallocation & Recycling: How to Maximize Utilization and Stop Buying Unnecessary Licenses.

How the Cloud Extension Policy Works

The Cloud Extension Policy deserves special attention as a key mechanism to reclaim value from unused licenses while moving to the cloud. SAP introduced this policy to retain customers who might otherwise drop maintenance or consider third-party support. It’s essentially a carrot to encourage cloud adoption.

How CEP Mechanics Operate: Under the Cloud Extension Policy, a customer can surrender a portion of on-premise licenses and their maintenance commitment. In return, SAP provides a credit that can be applied to new cloud subscriptions (such as SuccessFactors, Ariba, SAP Analytics Cloud, etc.).

The credit could be applied as a one-time discount or spread over a few years of the subscription term, depending on the deal structure. For example, if you are paying $1,000,000 a year in maintenance, you might negotiate to convert, say $300,000 of that maintenance into cloud credits for a new SAP cloud service.

You would then reduce your on-prem maintenance scope accordingly (dropping the licenses you gave up). The overall spend often remains the same – you continue to spend $1M/year, but now a portion of it goes toward cloud subscription fees instead of on-prem support.

Key Restrictions of CEP: There are important boundaries to note:

• SAP Portfolio Only: The credits must be used on SAP’s own cloud offerings. You can’t take that credit and buy non-SAP solutions.
• No Cash Refunds: You never get actual money back. The maintenance credit only offsets new purchase costs; it won’t appear as a refund on your balance sheet.
• Same Customer Entity: Typically, the licenses you retire and the cloud subscriptions you acquire should be under the same corporate entity and installed base. You can’t drop licenses in one country and use the credit for a different subsidiary’s purchase, for instance.
• Credit Ratio and Timing: SAP often does not give a full $1 credit per $1 maintenance. As noted, it might be $0.50 to $0.80 per $1 of maintenance (depending on how strategic the cloud product is and the timing – earlier adopters got higher ratios, but these incentives have been shrinking over time). Also, credits may have an expiration – you need to use them within a set period or they lapse. Usually, the credit is applied at the point of the new purchase or spread over the new subscription term; you can’t stockpile it indefinitely.
• Multi-Year Commitment: To use CEP, SAP will require a multi-year commitment to the cloud subscription (often 3–5 years locked in). They want assurance that the customer isn’t just taking a quick discount and then dropping the cloud product. This means you should be confident in your cloud move before committing.

Example of CEP in Action: Suppose your company has a legacy SAP SRM system with 1,000 user licenses, but you plan to replace SRM with SAP Ariba (a cloud solution). You’re paying $200,000/year in maintenance on SRM.

Under a Cloud Extension deal, SAP might agree that you can terminate SRM licenses and stop that $200K maintenance. In exchange, they give you maybe $140,000 (70%) worth of credit per year to put toward a new Ariba subscription. You sign a 5-year Ariba contract, and each year $140K of your Ariba subscription cost is effectively covered by the credit (and you pay the remainder).

Net effect: you didn’t reduce your spend with SAP (still paying around $200K, now for Ariba), but you converted that spend into a new solution that delivers value, instead of paying $200K for SRM support that you no longer need. SAP retains the revenue, and you get a modern cloud product without double-paying.

The Cloud Extension Policy is a win-win in theory: SAP keeps the customer in the family, and the customer redirects their budget to something useful.

However, you must scrutinize the offer – ensure the credit is fair and that you’re not committing to an overpriced cloud deal. Also, confirm what happens to those retired licenses: SAP should document that they are terminated and will not count against you in future audits.

When and How to Use Swap or Trade-In Negotiations

Timing is everything. SAP is most receptive to swap or trade-in requests at certain junctures in the relationship. You’ll want to seize these moments to negotiate:

Best Times to Initiate a License Swap/Trade-In:

• Contract Renewals: The period leading up to a big renewal or support agreement extension is prime time. SAP knows you could potentially cancel unused licenses to cut maintenance, so they may be more open to creative solutions to keep your spend in place. Leverage this by proposing swaps as an alternative to dropping licenses.
• Expanding SAP Footprint: If you’re planning to purchase additional SAP products or cloud services, use that as a negotiation lever. Propose that instead of paying full price for the new products, you swap out the equivalent value of unused licenses. SAP Sales teams are eager to close new deals and might accommodate value-for-value trades.
• Before Major Cloud Transitions: When moving to SAP cloud offerings or RISE, make the trade-in discussion part of your migration plan (ideally before signing the new contract). This is when SAP often has official programs in place and budgets to offer credits. Once you’ve signed a new deal, your leverage to get credits for old stuff drops dramatically.
• After Identifying Redundant Systems: If you’ve completed an internal audit and decided to retire a legacy SAP system or module (e.g., decommissioning Business Warehouse because you moved to another analytics tool), initiate a swap negotiation in advance of shutting it down. Show SAP you intend to drop it and see if they’ll swap the licenses toward something else you need.

When you do enter negotiations, come prepared with data and a clear ask. Negotiation levers that strengthen your position include:

• Shelfware Inventory: Present a list of all unused or underused licenses in your estate, with their original cost and ongoing maintenance cost. This quantifies the “trapped value” and shows SAP the money at stake.
• Value Proposal: Specify what new licenses or subscriptions you want in exchange. Make it a like-for-like value proposal (e.g., “We have $500,000 in unused licenses X, we’d like $500,000 in licenses Y instead”). The closer to a 1:1 value, the easier it is for SAP to approve internally.
• Maintenance Spend as Leverage: Remind SAP that you are considering dropping maintenance on the shelfware. The swap is positioned as a way for them to retain your maintenance revenue by allowing you to use it differently. In effect, you’re saying “work with us to repurpose this spend, or we will cut it entirely.”
• Incremental Commitments: If you are also willing to increase spend or commit to a new multi-year deal, use that to sweeten the swap arrangement. For example, “We’ll commit to a three-year contract including the new product if we can swap these old licenses for it at equal value.”
• Executive Engagement: If your account executive is resistant, involve higher-ups. A CIO or CFO-level conversation with SAP leadership about getting value for past investments can escalate the issue beyond the sales rep. This shows SAP that this is a strategic issue for your company, not just a procurement niggle.

Swap Negotiation Checklist: Before you approach SAP, make sure you’ve covered all preparatory steps:

• ✔️ Identify Unused Licenses: Pinpoint every module, engine, or user bundle that is paid for but not actively used.
• ✔️ Quantify Value: Determine the original license purchase value and current annual maintenance cost of that software. (E.g., “50 Professional User licenses worth $250,000, costing $55,000/year in support.”)
• ✔️ Define Your Needs: List what licenses or subscriptions you want to obtain via the swap or credit. Prioritize items that further your IT roadmap.
• ✔️ Write a Proposal: Draft a clear swap proposal to SAP in writing. Include the list of licenses to give up, what you expect in return, and the rationale (business transformation, updated needs, etc.). For example, state: “We propose to exchange our unused CRM and SRM licenses (valued at $800K) for an equivalent value of SAP Analytics Cloud and BTP services.”
• ✔️ Plan the Timing: Align the proposal with a forthcoming renewal or purchase. Indicate you’d like to execute the swap concurrently with that event.

Approaching SAP with a well-documented case increases your chances of success. It shows that you are serious and have done your homework.

SAP’s team will likely have to get approvals for any non-standard deal, so a thorough proposal gives them ammunition to justify the swap internally.

Read about continous optimization, Continuous SAP License Management: How to Sustain Optimization with Governance, Reviews, and SAM Tools.

Commercial & Contractual Considerations

When executing license swaps or trade-ins, the contract details and commercial terms are critical. You need to protect your organization’s interests during and after the swap.

Keep these considerations in mind:

• Maintenance Continuity: Clarify what happens to your maintenance fees post-swap. Ideally, your total maintenance base stays the same or only changes in proportion to new licenses added. Suppose you swap $1M of product A for product B. In that case, you should not suddenly pay more than $1M in maintenance for B. Ensure the contract states that the maintenance charges on the new licenses will be based on the original license value you swapped, not some inflated list price. The goal is to avoid any net increase in support costs due to the swap.
• Valuation of Licenses: A big sticking point is how SAP calculates the value of the licenses you’re trading in. SAP may try to undervalue older licenses (especially if they consider them “obsolete” products), which lowers your credit. Push back firmly. Demand transparent valuation — reference the original purchase price or SAP’s price list. If you paid $500,000 for those SRM licenses, their trade-in value should be $500,000 in equivalent list price of new licenses (or very close). Don’t accept pennies on the dollar for something still under maintenance.
• Contract Scope and Terms: When swapping or converting, make sure all terms carry over appropriately. If your old licenses had special conditions or discounts, attempt to preserve those in the new arrangement. Also, confirm whether the swapped licenses are considered a continuation of your existing contract or a new addendum. This affects things like audit rights and compliance – you don’t want SAP later arguing the new licenses are outside the protections you negotiated before.
• Support Fees and Rate Protection: SAP’s standard maintenance is 22% of license value per year (or 19% for standard support). When you swap licenses, negotiate that your support percentage remains the same on the new licenses. Also, watch out for any resets of the maintenance calculation. Sometimes, if you swap an older product for a newer one, SAP might want to start maintenance anew on the full list price of the new product (which could be higher). Insist that maintenance rate and base value remain consistent so you’re not hit with an unexpected support cost jump.
• Future Flexibility (Migration Clauses): If you’re using a swap as a bridge to a bigger change (like you plan to go to S/4HANA in a couple of years), bake in future conversion rights. For example, add a clause allowing you to exchange the new licenses for S/4HANA equivalents or cloud options later. You don’t want this swap to paint you into a corner. Ensure the contract language allows additional moves without penalty.
• No Penalty or “True-Up” Fees: Confirm that SAP is not charging any administrative or transfer fees for doing the swap. The exchange should be cost-neutral, except for any net new licenses you add. Everything should be documented so it’s clear these retired licenses are terminated without penalty.

One way to cement these protections is through explicit contract wording. For instance, consider adding a clause like:

“Customer may exchange unused on-premise license entitlements for alternative SAP products of equivalent list value on an annual basis, without any additional license fees and without increasing the total annual maintenance fee, subject to mutual agreement on the products exchanged.”

Such a clause (negotiated into your master agreement or renewal) gives you ongoing flexibility to perform swaps, not just a one-time deal. It essentially institutionalizes license recycling.

Negotiation Tip: Always frame a license swap or trade-in as a continuation of your investment in SAP, not a reduction. Emphasize to SAP that you are redirecting spend to new areas of need, not cutting spend.

This narrative helps SAP see the swap as positive (they retain revenue and maybe even foster a new sale) rather than a loss.

For example, instead of saying “We want to drop $300k of unused licenses,” say “We want to reinvest that $300k into new SAP solutions that better align with our current needs.”

The optics matter – SAP reps are more likely to support a proposal if it sounds like growth or transformation, rather than budget cutting.

Using License Swap Data as Negotiation Leverage

Data is your ally in negotiations. By presenting hard evidence of your usage and costs, you can make a compelling case that SAP will find hard to refute.

Here’s how to use data to strengthen your position:

• Shelfware Audit Results: Start by conducting a thorough internal audit of SAP license usage. Identify exactly which licenses are sitting idle and quantify the total cost of that shelfware. For example, “We have 300 Professional User licenses of which 120 have not been used in over a year, representing $750,000 in unused value and $165,000/year in maintenance.” Such specifics underscore the inefficiency and put SAP on notice that you know your environment well.
• Business Case & ROI: Prepare a brief business case showing what you plan to do with the swapped value and why it’s beneficial. For instance, demonstrate that converting those idle licenses into a new SAP module will deliver X business value or Y cost savings internally. If SAP sees that the swap enables a meaningful project or solves a problem for your company, they’ll understand why it’s important (and why you might escalate if they say no).
• TCO Comparison: Compute the Total Cost of Ownership impact of not swapping. Show a scenario where, if SAP refuses, you might drop the licenses entirely, resulting in SAP losing maintenance revenue (and you still get nothing new), versus if they agree, you maintain spending with SAP and get new functionality. This highlights the win-win aspect. For example, “If we maintain the status quo, we pay $200k over the next year for nothing (unused licenses). If we swap, that $200k funds a new analytics platform from SAP – delivering value to us and keeping our investment with SAP.” Numbers talk – put them on paper.
• Benchmark or Precedent: If you have any insight (from user groups or past deals) about other customers doing swaps or SAP’s Cloud Extension offers, carefully use that as leverage. Without divulging confidential info, you could say, “We know SAP has provided 1:1 maintenance credit in similar situations for other strategic customers. We expect no less in our case, given our long partnership.” This signals that you’re an informed buyer who won’t accept an inferior offer.
• Escalation Path: Let SAP know that you have executive backing for this negotiation. For example, mention that “Our CIO and CFO are aware of this shelfware issue and are committed to resolving it before renewal.” This implicitly signals that if the account team stonewalls, you are prepared to take the discussion up the chain. SAP hates surprises from powerful customer execs, so your rep will be motivated to find a solution rather than have your CIO call their boss.

As you negotiate, consider documenting your key points in an email or letter to SAP.

This creates a written record of what you requested and why. It can be useful later if there’s turnover on the SAP side or if you need to reiterate the logic to a different SAP stakeholder.

Example: To illustrate data-driven leverage, here’s a sample statement you might present to SAP during negotiations:

“We’ve identified $2.5 million in SAP licenses (across several modules) that are effectively inactive in our environment. These assets currently cost us about $550,000 per year in maintenance. We propose reallocating that value toward new SAP solutions we do need – specifically, additional SAP Ariba and SAP BTP subscriptions – with a 1:1 credit conversion on the license value. This approach would allow us to continue our investment with SAP at the same spend level, but directed to areas that support our business growth. We believe this is a constructive path that benefits both our company and SAP.”

A statement like that is powerful: it shows the dollar amounts, identifies the pain (paying for maintenance without value), and presents a concrete solution that keeps the money on SAP’s platform.

It subtly reminds SAP that if they don’t cooperate, you have $550k/year on the line that you could cut, while if they do cooperate, they secure that spend into new products.

Governance and Risk Management

Executing a swap or trade-in is not the end of the journey. You must manage the aftermath carefully to avoid compliance issues or value leakage. Treat license swaps as a process that requires good governance:

Governance Checklist:

• Document Everything: Keep a clear paper trail of the swap agreement. This includes formal letters or contract addendums where SAP agrees to terminate certain licenses and grant the new ones. Also, retain any internal analysis you did (shelfware reports, approval notes) as evidence of why decisions were made.
• Update License Inventory: Once swapped, immediately update your internal SAM (Software Asset Management) records or entitlement database. The licenses you traded in should be marked as terminated, and the new licenses added. This prevents confusion later about what you own. It also ensures your next compliance audit starts from an accurate inventory.
• SAP Confirmation of Retirement: Ensure you receive official confirmation from SAP listing the licenses that were given up. This could be in the form of a termination letter or an amended contract schedule with those items removed. This is crucial for audit protection – you want proof that those licenses are no longer considered active, in case an auditor questions why you’re not covering them.
• Cloud Credit Tracking: If you took credits (like under Cloud Extension Policy), track them closely. Note the amount of credit, what it’s applied to, and any expiration date or usage conditions. For example, if you received a $500k credit toward a SuccessFactors subscription, ensure you allocate the full amount in your purchase order and that it’s reflected in the invoices. Diarize any expiration – e.g., credit must be used within 12 months. You don’t want “free” money to go unused due to oversight.
• Audit Impact and Protection: After the swap, review your SAP contracts for any clauses about audits and compliance. If you removed users or engines from support, ensure there’s language that excludes them from future compliance checks. Additionally, in your next self-declaration or measurement to SAP, exclude the terminated licenses. If SAP’s tools still count them, be ready to show the termination agreement. The goal is to prevent any scenario where SAP later tries to claim you’re under-licensed because they think you don’t have those old licenses (when in fact you intentionally dropped them).
• Internal Communication: Communicate the changes to all relevant stakeholders in your organization. IT operations should know that certain systems or modules are no longer licensed (so they shouldn’t accidentally fire them up). Finance should know that maintenance costs should drop for those items or shift to new ones. And procurement/vendor management should log the negotiation outcome for future reference (especially if there are future swap opportunities in the contract).

Managing these governance items will ensure the value you gained from the swap isn’t lost and that you remain in compliance.

It also builds a precedent internally – showing that proactively managing licenses yields tangible benefits, which can support future optimization initiatives.

Common Pitfalls & How to Avoid Them

While swaps and trade-ins are powerful tools, there are traps to watch out for.

Here are common pitfalls organizations face in these negotiations and how to mitigate each:

1. Pitfall: SAP undervalues your unused licenses during the swap. They might claim your legacy products are old or heavily discounted originally, offering you only a small credit.
   How to avoid: Come armed with the original purchase records and price list references. Negotiate for full list price equivalence or as close as possible. Make it clear you know what you paid and expect fair value in return. If SAP low-balls the valuation, be prepared to pause negotiations or escalate – they often have wiggle room, especially if maintaining your goodwill (and revenue) is on the line.
2. Pitfall: Your maintenance costs increase after the swap. This can happen if the new licenses are priced higher or SAP uses the swap as an opportunity to reset support fees.
   How to avoid: Lock in the maintenance rate and base in writing. If you were paying 22% on a $5M license pool before, you should pay 22% on $5M after (assuming equal value swap). Include language that the swap shall not increase total maintenance spend. Double-check how SAP calculates maintenance on the new licenses – if they try to use the current higher list price, insist on using the value of the licenses you gave up. Essentially, swap apples for apples, including the support commitments on those apples.
3. Pitfall: Cloud credits expire before you can use them fully. If you negotiate a credit as part of a move to the cloud, you might find that you haven’t deployed the new solution fast enough or bought as much as you thought, leaving some credit unused when it lapses.
   How to avoid: First, try to negotiate the longest possible window for using credits, or even a rollover of unused credits into other SAP products if one project is delayed. Next, keep a close project plan tied to those credits – if you see you won’t utilize them in time, talk to SAP before expiration to possibly extend or reallocate them. SAP would rather you use the credit on another product than lose a customer initiative. Internally, treat those credits as “use-it-or-lose-it” budget – assign an owner to make sure they get spent.
4. Pitfall: Swap offers are tied to overly long commitments. SAP might say, “Sure, we’ll swap those licenses, but only if you sign a five-year extension or a big new cloud contract”. They bundle the swap with a commitment that might be too onerous.
   How to avoid: Push for a shorter commitment or trial period. For example, negotiate a 1–2 year subscription with the swap, with an option to extend. If SAP is insisting on a long-term, narrow the scope: maybe commit long-term to the portion of spend that was already locked (maintenance), but not on entirely new spend. Also, evaluate if the long commitment is actually palatable – sometimes it might be okay if it’s a product you truly plan to use for many years. Just don’t agree blindly; make sure any multi-year lock-in is worth the swap benefit.
5. Pitfall: Lack of clarity on audit and compliance after the swap. In some cases, companies swap licenses but later face confusion during an audit about what happened to those retired licenses, or whether they still have rights to use them.
   How to avoid: Insist on formal documentation from SAP listing the exact licenses terminated or converted. During the negotiation, also ask for a clause that states you will not be charged or audited for those licenses in the future. When the deal is done, verify that SAP’s records (like your entitlement database on SAP Support Portal) reflect the change. Essentially, leave no ambiguity – the licenses are gone and no longer count. If you ever get an audit letter, you can produce the swap agreement and defuse any questions in that area.

By anticipating these pitfalls, you can address them in the contract or negotiation phase.

It’s much easier to prevent a problem than to fix it after the fact, especially when it comes to SAP contracts. Remember, SAP’s paperwork is king – if it’s not written, it’s not granted. So handle the swap with the same rigor you would a major purchase.

Example – Turning Idle Licenses into Strategic Assets

To illustrate the impact of a well-executed swap, consider this real-world style scenario:

A global telecom company discovered it had roughly $4 million worth of SAP shelfware tied up in legacy modules (old SRM and BW systems that were no longer actively used). Year after year, they were paying nearly $880,000 in annual maintenance for this dormant software. During a renewal negotiation, the company took a bold approach: leverage SAP’s trade-in programs to repurpose this idle investment.

Using a combination of the Cloud Extension Policy and a contractual swap, the telecom converted about $2 million of value out of that shelfware into modern solutions. Specifically, SAP agreed to let them terminate the SRM and BW licenses, and in exchange, the customer applied:

• $1.2 million of the original license value as credits toward new SuccessFactors (SAP’s cloud HR suite) subscriptions.
• $800,000 of the value as credits toward SAP Ariba procurement cloud services.

The deal was structured so that the company’s total spend with SAP remained roughly the same over three years – in other words, they didn’t have to increase their budget to get these new tools. They essentially neutralized $2M of “dead” investment and brought it back to life in the form of useful software.

Three years later, the results spoke volumes: the telecom had rolled out SuccessFactors and Ariba company-wide, driving improvements in HR and procurement processes. The credit swap already accounted for the cost, so they didn’t feel a pinch in the IT budget.

Meanwhile, they stopped paying maintenance on the decommissioned systems, avoiding what would have been ~$2.6M in support fees over those three years. By treating idle licenses as strategic assets to be traded, the company unlocked tangible business value and kept its SAP relationship strong, all without spending extra money.

This example shows that with creativity and assertive negotiation, even shelfware can be turned into solutions that power business outcomes.

5 License Swap Tactics to Remember

• Use swap programs as strategic levers, not just reactive fixes. Plan your swaps in line with business strategy (cloud migration, new initiatives) to maximize impact, rather than scrambling only when shelfware becomes glaring.
• Demand transparent license valuation and maintenance protection. Insist on getting fair credit based on what you paid, and ensure your maintenance costs don’t spike as a result of any exchange.
• Tie conversions to new investments – not just contract renewals. Align swaps with forward-looking projects (like adopting a new SAP platform) so that SAP sees the upside of giving you credit. Don’t waste a swap just to extend a contract; link it to something new and valuable.
• Negotiate audit clarity and documented decommissioning. SAP should document every swap or termination to remove those licenses from your compliance scope. Get it in writing to prevent audit issues down the road.
• Always model the TCO and savings before agreeing. Do the math to confirm that a trade-in actually delivers value. Ensure that when you convert shelfware into something else, you’re truly saving money or getting equal utility – not just moving spend around without benefit.

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fredrik.filipsson

Fredrik Filipsson is the co-founder of Redress Compliance, a leading independent advisory firm specializing in Oracle, Microsoft, SAP, IBM, and Salesforce licensing. With over 20 years of experience in software licensing and contract negotiations, Fredrik has helped hundreds of organizations—including numerous Fortune 500 companies—optimize costs, avoid compliance risks, and secure favorable terms with major software vendors. Fredrik built his expertise over two decades working directly for IBM, SAP, and Oracle, where he gained in-depth knowledge of their licensing programs and sales practices. For the past 11 years, he has worked as a consultant, advising global enterprises on complex licensing challenges and large-scale contract negotiations.

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