For years, SAP customers have been able to rely on more than just volume-based discounts when negotiating on-premise licences. Special discounts, negotiated outside of the standard pricing structures, often played a crucial role in keeping costs manageable. But current trends suggest those days are over.
Recent updates and insights from within the SAP ecosystem suggest that special discounts are no longer being offered. Unless you’ve secured contractually guaranteed terms in the past, the only discount you can expect now is volume-based. In practical terms, this means on-premise software is about to become significantly more expensive. And that’s no coincidence. This is SAP’s latest lever to drive customers towards its preferred destination: the cloud.
In this blog, we explore what has changed and what you can do about it.
SAP’s shift is simple but significant. Previously, customers could negotiate special discounts that went beyond the standard percentage reductions for buying at scale. Those special terms acted as a buffer, helping customers reduce exposure and keep budgets under control.
Now, based on insights we're seeing in the market, those discounts are increasingly off the table, which makes the calculation brutally straightforward: list price minus volume discount. Unless your contract already locks in a preferential rate, you will likely be paying far closer to SAP’s list price than you have in the past.
This change is strategic. By making on-premise licensing more expensive, SAP is directly incentivising customers to consider its cloud offerings, where pricing and contractual flexibility are positioned as more attractive.
In the past, when organizations calculated an Effective License Position (ELP), they often worked from historical net discounts. Those figures gave a sense of the “best case” pricing that a customer could realistically achieve.
But if special discounts are no longer generally available, those models are now misleading. The “worst-case” scenario—list price with only volume-based discounts—is no longer hypothetical. It’s now highly likely*.
That means many organizations could be significantly underestimating their compliance exposure. A customer that assumes they can replicate last year’s net discount may suddenly find themselves facing far higher true-up costs during an audit.
*Negotiating discounts may still be possible, particularly if you are buying more of a license that you already had and which you previously received a good discount on. But the discount is likely to be significantly lower than it was in the past.
One of the challenges customers face is that SAP order forms rarely make discounts and list prices transparent. Instead, customers often have to piece together the picture from scattered data points.
There are workarounds to solve for this, but they can be complicated and require careful analysis. Livingstone’s SAP licensing specialists can assist you with this matter.
If you’re an SAP customer, the potential withdrawal of special discounts means it’s time to reassess your position. Here’s what we recommend:
SAP is not alone in this strategy. Across the industry, major vendors are making on-premise licensing less attractive as they look to accelerate cloud migration. Removing special discounts is a powerful lever in that strategy.
For customers, the message is clear: unless you have a robust understanding of your license baseline and contractual terms, you risk walking into negotiations or audits at a disadvantage.
The good news is that with the right analysis and independent support, you can stay one step ahead. Understanding your true position allows you to make informed decisions about whether to purchase on-premise, negotiate new terms, or move to the cloud on your terms rather than SAP’s.
Don’t get caught out by SAP’s discounting changes. Livingstone helps organizations uncover the true cost of their SAP estates, validate risk exposure, and negotiate from a position of strength, whether you’re staying on-premise or moving to the cloud.
If you have questions about your SAP licensing, contact us and one of our experts will be happy to chat.