<div id="readability-page-1"><div id="body"> In 2020, SAP's CFO told investors that its plans for customer upgrades, cloud migration, and a move to SaaS would give the German software vendor a greater &#34;share of wallet.&#34; Last week, European retail giant Kingfisher explained how it stepped outside that narrative, eschewing the vendor-recommended upgrade path. But its decision to ignore SAP support deadlines and remain on legacy software might raise as many questions as it answers for other SAP users who find themselves in the same position. Kingfisher, which owns UK brands B&amp;Q and Screwfix, is not alone in facing a decision on whether to upgrade its ERP system and move it to the cloud the way SAP wants to, or stick with legacy system ECC and manage the end of vendor support. According to Gartner figures from Q4 2024, only 39 percent of worldwide ECC customers – from a total of 35,000 – had bought or subscribed to licenses to start their transition to SAP S/4HANA, a platform first launched in 2015. Vendor support for ECC ends in December 2027. For a 2 percent premium, customers can get extended support until the end of 2030. After negotiations with SAP, £13 billion-turnover Kingfisher decided to ignore the vendor-recommended upgrade path to S/4HANA and instead move its ECC platform to Google Cloud with third-party support from Rimini Street. In a recent presentation at Gartner's Symposium in Barcelona, group CTO Chris Blatchford said the retailer had been trying to get the vendor to show the business value in the upgrade. Ultimately, Kingfisher was not convinced. However, using a combination of Google Cloud tools and software from Databricks, the retailer says it has developed an AI strategy including personalization, recommendation engines, and flexible pricing models, all built from its core ERP data. In doing so, Kingfisher has cast doubt over SAP's attempt at creating a motivational carrot of &#34;innovation&#34; to accompany the stick of support ending. In 2023, SAP CEO Christian Klein told investors &#34;SAP's newest innovations and capabilities will only be delivered in SAP public cloud and SAP private cloud&#34; using RISE with SAP, the vendor's ECC-to-S/4HANA upgrade and cloud migration package. While Kingfisher's decision to step off the vendor's recommended path shows innovation is possible via other routes, it might have other consequences. Earlier this year, German-speaking user group DSAG said that if users eventually wanted to get back on the upgrade path with SAP, they would find that they had lost commercial leverage. DSAG's Michael Bloch, board member for licenses, contracts, and support, said at the time: &#34;The bad consequence of third-party support is that SAP will not grant you any incentives if you want to move to the SAP Cloud solutions. That's something customers should evaluate. From a financial point of view, it really hurts if you do not get these incentives and start with your credits. Basically, termination of SAP support to get third-party support, in most cases, means that you move away from SAP.&#34; The Register asked Kingfisher about its plans beyond ECC, but the retailer declined to comment. We also contacted SAP. Rimini Street CTO Eric Helmer said its customers pay between 50 and 90 percent less with the third-party support provider than they did on vendor support. He also cast doubt that customers would eventually have to move away from SAP entirely. &#34;SAP will tell people that if you leave us and come back, you're going to owe back maintenance, but that doesn't really happen. SAP will be happy to take you back as a customer if you negotiate,&#34; he told The Register in Barcelona. He also questioned what users would go back to. &#34;If you're on ECC, you're going to S/4HANA using [the RISE cloud deal]. It's a completely separate product. You're not going back to anything, you're buying something that's new.&#34; As long as customers are considering something new, they may want to weigh other options. Rimini Street's idea is that customers create &#34;a single data fabric exposed to the user, which includes orchestration, security and governance, and compliance,&#34; on top of which users can buy off-the-peg applications to create a UI based on AI agents. This way, users would avoid putting everything into &#34;one monolithic provider,&#34; which comes with the downside of vendor lock-in, where the supplier controls the pace of innovation and introduces upgrades &#34;every three to five years.&#34; <ul> <li>SAP portal outage raises questions over vendor's cloud readiness</li> <li>Retail giant Kingfisher rejects SAP ERP upgrade plan</li> <li>Two-fifths of SAP Americas users yet to ditch legacy ERP</li> <li>SAP says some customers are dragging their feet on contract sign-offs</li> </ul> &#34;People want to have that modularity to be able to do the things that they need to do at the speed they need,&#34; Helmer said. Critics might argue that while products exist for an enterprise data governance and security &#34;mesh&#34; and service layers, such as ServiceNow, they have yet to be tested against the kind of use cases for which ERP is currently employed. After all, some of the world's largest industrial and manufacturing organizations rely on SAP, including Airbus and VW Group. Dixie John, senior director of ERP strategy at Gartner, said she agreed with some of the shorter-term strategies companies adopt, such as using third-party support, extending the life of legacy systems, and innovating around the edge, but there was a limit to how far they could go with it: an upgrade to main system would ultimately be necessary. &#34;If we play it further down the road at some point, if I keep innovating around it, I'm going to have to [upgrade] at some point. I could do that later, but at the end of the day, there are some components that you have to have in to deliver advanced, adaptive experiences with users. With the ECC – that they'll have for a long time – how far can they take embedded intelligence within it? I get when organizations delay and go for third-party, but in playing it forward, I think eventually you'll have to upgrade the core.&#34; By the core, Gartner means a foundational layer that runs a set of processes that are advantageous to standardize because that drives compliance with standard processes. &#34;You have capabilities that are relatively static: how you apply cash, how you host accounts receivable, how you create invoices,&#34; John said. &#34;We consider those foundational capabilities. They are different from capabilities that you use to differentiate yourselves as a business, such as digital channels and logistics capabilities. ERP tends to fall into the foundational layer. This is the reason why we say at a foundational layer, you should use that solution as is. If you have to take capabilities out of the ERP to do something differentiating with them, use an API-first approach in order to do that, but don't mess with the core.&#34; In a world where major ERP projects can take three years, and with SAP's 2027 and 2030 support deadlines fast approaching, time is running out for many ECC customers to find the right strategy. Kingfisher might provide an inspiration for what could be possible outside of the vendor's preferred narrative, but it is far from the end of the story. ® </div></div>

Kingfisher, a major European retailer, has opted to bypass SAP's recommended upgrade path to S/4HANA, choosing instead to move its ECC platform to Google Cloud with third-party support. This decision challenges SAP's migration narrative and raises questions about the vendor's cloud strategy. Kingfisher's approach, leveraging AI and cloud tools, suggests innovation outside SAP's framework, but may affect future commercial leverage with SAP. Rimini Street claims significant cost savings with third-party support, questioning SAP's stance on returning customers.

SAP's migration narrative suddenly looks messy as Kingfisher goes off-script