SAP private cloud users risk a price increase of 10% or more when they renew, while on-premises customers are likely to face annual support price hikes as the German enterprise resource planning (ERP) giant aims to lift all boats on the rising cloud tide.

That’s the verdict from Gartner via a recent report on The Register, suggesting SAP Cloud ERP Private customers without a negotiated price cap in their original contract risk an increased financial burden.

Alongside Oracle’s ERP platform and Microsoft’s Dynamics 365 suite, SAP’s offerings define it as one of the world’s biggest enterprise technology providers through its ERP software. These offerings include SAP Cloud ERP Private, previously known as SAP S/4HANA Cloud, private edition. The public edition, meanwhile, is known as SAP Cloud ERP after a rebrand of both editions earlier this year.

SAP’s brand refresh was an interesting move, considering its former enthusiasm to be seen as a cloud-based enterprise tech name, with ERP perhaps an unfashionable term to some degree. The cloud-based S/4HANA branding came from this pivot, sexing up the name of its on-premises SAP ERP Central Component (ECC) predecessor, which like both platforms runs on SAP HANA database. Both services also feature networking tools such as SAProuter and SAP Web Dispatcher.

Will 2030 see the end?

The S/4 rebrand was SAP’s major klaxon warning that it would be ending support for SAP ECC by the end of 2027. Cue endless B2B tech think pieces in the media, countless system integrators saying customers can stay on-premises and disregard the cloud, and a lot of repeated statements from SAP that the cloud journey was going smoothly and that the deadline of 2027 was immovable. All reminiscent in some ways of the current Broadcom and VMware controversy.

The twist, according to Gartner? SAP will likely extend its support for ECC.

"By 2030, Gartner estimates that more than 40% of current SAP ECC 6 customers will still use ECC 6 for key business areas, leading SAP to reconsider its maintenance end date and cloud migration strategy," according to its recent paper.

SAP would likely do this with a grimace, not just because it’s all-in on cloud, but because it’s more recently gone in on AI (like everyone else), with SAP Cloud ERP Private marketed as the best way to leverage its AI updates.

Take SAP Web Dispatcher, SAP’s web traffic load balancer and reverse proxy between users and SAP application servers, which may allow tighter integration with SAP’s AI-enabled services when employed in a cloud environment. This would include dynamic routing, auto-scaling, and cloud-native security features, potentially improving overall user experience and AI traffic support.

AI is pricey

According to Gartner, any customer who bought SAP’s private cloud before the AI wave took off and are thus in the renewal-phase may face that 10% hike if they didn’t negotiate flat subscription fees for the initial agreement period.

"Gartner has observed a steady decline in perpetual license discounting and expects this pattern to continue as SAP drives customers toward SAP Cloud ERP Private," the researchers added. "While it is still possible for customers with strong leverage to achieve competitive S/4HANA perpetual license discounting similar to levels previously seen, this will not be the case for all."

"In addition, SAP has introduced annual support increases for ECC 6 and S/4HANA customers since 2021, including a 5% increase in 2025," Gartner added, noting it "expects on-premises customers to face annual support price increases every year for the foreseeable future."

SAP disputed Gartner’s research, stating that its adjustment mechanism allows for yearly increases in maintenance fees, but these are not direct raises in list prices and are capped at 5%.

The adjustment, it said, applies to multiple support plans and is based on local consumer price indices or similar government measures; customers pay the lower rate if the index is below the cap. SAP also highlighted that its approach follows industry norms and that the first adjustment in a decade occurred in 2023, following a freeze during the pandemic years of 2021 and 2022, contrary to claims suggesting earlier changes.

Those industry norms are not simply down to inflation and the like. Gartner projects global AI spending at around $1.5 trillion in 2025, rising to $2 trillion next year. AI-optimized infrastructure-as-as-service (IaaS) is predicted to surge by 146% to $18.3 billion this year.

SAP may not be a hyperscaler or a cloud-provider giant like Oracle, but it is a leading name enterprise tech with a lot of customers and a lot of bandwidth, and it’s investing heavily in AI in-house and through partnerships with the likes of OpenAI.

As AI doesn’t come cheap, SAP users will need to get used to price hikes – even those not actually using the AI in question.