Many users of older Oracle and SAP systems are concerned about the future of their ERP packages. They are facing rising support costs and end dates for support. According to software licensing expert Richard Spithoven of SoftwareOne, this reality is forcing companies toward the cloud. However, the migration is proving to be much more complex and expensive than expected. This is because many organizations do not understand the challenges, do not know which modules they actually use, and the licensing models are becoming less transparent.
Companies running Oracle or SAP software on-premises are coming under increasing pressure. Oracle has increased its support costs from 4 to 8 percent in recent years, under the guise of inflation. In June 2026, this is expected to increase to 10 percent. SAP has set 2027 as the end date for support of the legacy ECC software system, although companies can continue to use it until 2030 for an additional 2 percent maintenance fee. According to critics, this date has been postponed because adoption of the cloud proposition is lagging.
Shift to the cloud
SAP told Techzine that the date was postponed once (in 2020) to give customers planning certainty, and that any further postponement is out of the question. “There will be no extension of these dates,” SAP says. However, the German software giant acknowledges that highly complex processes sometimes take longer. For this specific group, since the beginning of 2025, there has been “a time-bound subscription offering designed to provide business continuity from 2031 to 2033 while enabling a structured path to SAP Cloud ERP or SAP Cloud ERP Private.” It explicitly states that this is not an extension of regular mainstream maintenance but a subscription offered under certain conditions.
In any case, the strategy behind the moves of the two major brands is clear to Spithoven. The two software houses want to persuade customers to switch to Oracle Fusion Applications or RISE with SAP. Oracle Fusion Applications includes several modules, while RISE with SAP is a package designed to move companies towards the S/4HANA cloud solution. “It’s obviously just a commercial move to make on-premise more expensive and force customers to move to the cloud,” Spithoven points out.
We also asked Oracle for a response, but they have not yet responded.
The problem of invisible use
Spithoven points to a major problem beneath the surface. Many organizations have no idea which modules they actually use. A company that purchased 100 ERP software modules 10 years ago may now only use 40 of them (shelfware). The rest lie unused on the shelf, but the support costs continue to accrue. “People don’t know what they don’t know,” explains Spithoven. Over the years, business requirements have changed, making certain functionality redundant. The contracts do not automatically adapt to this.
SAP itself states that shelfware is no longer a major challenge. This is due to the ‘Extension Programs’ introduced in 2013, allowing customers to exchange or reallocate their existing on-premises investments and unused licenses to SAP’s public cloud or private managed cloud solutions, preventing large-scale shelfware.
In addition, Spithoven observes that customers regularly use modules that they have not contracted for at all. This only comes to light during the implementation phase of a cloud solution, after six months or a year. Functionalities that worked in the on-premises world suddenly require additional licenses that were not included in the business case. “The costs can skyrocket in one go,” says Spithoven.
Reviewing the system during migration can lead companies to discover historical, unlicensed use (non-compliance) that must now be paid for in the cloud. That makes sense. On the other hand, a cloud strategy often requires moving or rebuilding existing custom code, unexpectedly burdening the business case with costs for additional credits or licenses.
In response to questions from Techzine, SAP argues that a package such as S/4HANA Cloud Private Edition (a standard choice within RISE with SAP) includes all on-premise capabilities as standard, plus additional features. Activating new additions, such as generative AI, does cost extra money.
It remains difficult to predict how this will actually work out in practice. A lack of insight leads companies to pay for modules they do not use or to use modules without knowing how to optimize costs. When migrating to the cloud, these problems lead to friction with the new contract.
Complex licensing models as a weapon
According to Spithoven, software suppliers deliberately make their licensing models complex. Oracle’s philosophy is that customers should be able to download and use all software, but the responsibility for correct licensing lies entirely with the end user. “Every customer must be able to use all software at all times, because we want to ensure that the go-to-market speed is very high,” says Spithoven, describing Oracle’s strategy.
This lack of knowledge and expertise among customers regularly leads to non-compliance. Oracle conducts audits every 3 to 5 years for on-premises software, which reveal these problems. At SAP, these audits take place more frequently, namely every year. SAP emphasizes to Techzine that audits in an on-premises environment are the only way to guarantee compliance. SAP calls it a “joint activity” in which the customer itself, with the help of SAP tools, provides the results based on a relationship of trust.
Spithoven notes that shifts in licensing models nevertheless lead to cost increases of up to hundreds of percent, leaving organizations facing unexpected financial claims. In that respect, regular assessment can do no harm. The claims sometimes run into the hundreds of millions. The largest Spithoven has ever seen amounted to 1.2 billion euros. Companies keep this quiet because it is an ‘admission of failure’. Software suppliers also do not want matters to become public through lawsuits, because a precedent could encourage other customers to take similar action.
Cloud increases the risks
In the cloud, these risks do not diminish, Spithoven explains, but rather increase. With Oracle Fusion, every customer is assigned a Customer Success Manager who produces annual reports to see which users have access to which modules. What sounds like support on paper works as a sales tool in practice. “Is the Customer Success Manager really there to make the customer successful or to guarantee more revenue from Oracle for the customer?” Spithoven wonders. “In practice, it’s often the latter.”
A customer who has purchased six modules may receive an invoice for 20 modules after a year, even though users did not consciously activate the functionality through bundling changes. An expected renewal of €2.3 million suddenly becomes €4.2 million, for example.
RISE with SAP works in a similar way. There, too, a CSM regularly generates reports to see who has access to which functionality. The situation for SAP users is somewhat different, however, because ECC will be discontinued in 2027.
When asked, Spithoven suggests that the argument for purchasing additional support on security grounds is not always valid. Basically, the old Oracle and SAP systems are often already secure enough; the really extra security updates are often needed for very specific features and modules that only a few companies use. If you know whether you use those features and modules, it may also be more financially attractive to purchase support from a third party. This may be cheaper than purchasing it from Oracle or SAP.
Underestimated implementation costs
Software suppliers like to present cloud migration as a business case with clear savings over 5 to 20 years. However, Spithoven warns that the actual transformation and implementation costs are structurally underestimated. “In almost all projects where customers move away from on-premise ERP, I see that the costs ultimately go through the roof,” he says. Organizations simply do not have all the facts on the table. After 6 or 12 months, custom functionalities emerge that are necessary but were not known to be used in the on-premise world. Additional budget must be made available, making cloud migration feel like a bottomless pit for many customers.
The lesson from Spithoven’s entire argument: before you move to the cloud, you first need to know exactly what you are currently using. Otherwise, you cannot properly map your current situation to what you actually need in a new agreement. And then you are guaranteed to pay too much.
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