SAP shifts business model toward cloud subscriptions and AI

SAP, a leading global software provider based in Walldorf, is undergoing a fundamental transformation of its business model. The company is transitioning from traditional software licenses installed on local servers to cloud subscriptions and artificial intelligence integration.

Effective contract management is becoming a critical continuous process for organizations using SAP. As business models and IT landscapes evolve, companies must coordinate between procurement, IT, and finance departments to manage costs, usage rights, and renewal terms for both on-premises and cloud environments.

Key technical milestones include the end of mainstream maintenance for certain Business Suite 7 core applications in 2027, with an optional extended maintenance period until 2030. Additionally, the S/4HANA commitment through 2040 requires that at least one release remains under maintenance at all times.