The price is the number everyone asks about first, and it is the number you can do least with until you understand the rest. A price is a figure applied to a quantity, under a set of terms. If the quantity is wrong or the terms are unfavourable, a good price will not rescue the deal.
Before talking about price in an SAP renewal, three things are worth settling. What do you actually own? How are your users classified? And what is being added to the proposal that you did not ask for?
1. What do you own, and what do you use?
SAP estates build up layers over many years. Licences are bought for projects that change shape, modules are carried over from older contracts, and users move on without their entitlements being reviewed. It is common to find licences in a contract that nobody uses and cannot easily explain.
Start by reconciling three lists: what your contract entitles you to, what is deployed and what is used. The gaps between them are where money hides. A renewal that carries unused licences forward unchanged is paying for them again.
2. How are users classified?
For cloud and RISE contracts, user cost is built on Full Use Equivalents. SAP’s own guidance sets the weights as one FUE for an advanced user, one FUE for five core users, one FUE for thirty self-service users and two FUE for a developer. The classification is driven by the authorisations assigned to each user, not by how much they use the system. A single high-level authorisation in a widely assigned role can lift a user into a more expensive category.
That matters because the count can move without anyone noticing. One licensing specialist notes that under SAP Cloud ERP Private, consumption is monitored monthly, so a role change can raise the figure that your next renewal is based on. Review roles and authorisations before the renewal, not after.
3. What has been added to the proposal?
SAP’s renewals now often arrive with more in them. Chief executive Christian Klein said on 21 October that nine out of ten of SAP’s 50 largest deals included AI and Business Data Cloud, and that RISE contracts are getting richer. Check each added component against a real need. Business AI is split into a base level included with cloud subscriptions and a premium level bought in AI Units, so ask which one your proposal assumes and how the units are sized.
4. What is the timetable?
Know your dates. For ECC customers, mainstream maintenance ends on 31 December 2027, with optional extended maintenance to 2030 for two additional percentage points. That deadline shapes what SAP will propose and how much time you have. It also matters when you negotiate. SAP’s finance chief said around half of annual bookings land in the fourth quarter, which tells you when the vendor most wants to close.
Then look at the price
Once the quantities, classification and scope are clear, price becomes a meaningful conversation. Compare the unit price with what you pay today, check the annual uplift and the term, and ask for price protection on anything you add later. Ask how migration credits, if any, are applied and over what period, since SAP’s CFO has said credits are spread over the life of the contract.
Ask also for the proposal to show each component separately. A single bundled number makes it hard to see what each part costs and harder to remove any of it.
A short checklist
Reconcile entitlements, deployment and use. Review roles and authorisations that drive user classification. Challenge each new component against a need. Confirm your dates, including extended maintenance if relevant. Ask for itemised pricing, protection on future additions and clear credit terms. Then negotiate the price.
Questions to put to SAP
Ask SAP to confirm in writing the entitlement it believes you hold and the quantities it is using as the starting point. Ask how users are being classified and what rules or reports were used. Ask for each added component to be priced separately, with the metric and the minimum commitment stated. Ask how any credits are applied, when they expire and what happens to unused amounts. Ask what the price protection is for additions during the term and for the renewal after it.
If the answers are vague, that is information. A renewal built on clear numbers is easier to agree. One built on a single bundled figure is harder to challenge, and usually benefits the vendor.
How to prepare in thirty days
In the first week, gather your contract, your latest entitlement report and your current user list. In the second, compare entitlements with deployment and with real use, and note every gap. In the third, review roles and authorisations for the users who drive the most cost, and test what would change if you removed unneeded access. In the fourth, write down your position: what you want to keep, what you want to remove, what you are willing to add and what you need in writing.
That position, built from your own evidence, is a stronger starting point than any figure SAP puts on the table first.
Common traps
Three traps appear often. The first is accepting the vendor’s count of users or entitlements without checking it. The second is agreeing to a bundle because the total looks lower than the sum of the parts, without checking what you would use. The third is treating a deadline as fixed when it is a sales date. Each of these is easy to avoid if you have done the groundwork, and expensive to reverse once the contract is signed.
Conclusion
The first thing to check in an SAP renewal is what the price is being applied to. Quantities, user classification and added components decide most of the outcome.
Settle those first, know your timetable and then discuss the price. You will negotiate from a position of knowledge rather than reacting to a figure.
