Is SAP Still Relevant in 2026? Market Trends & Future Insights
Every few months, a board member or newly arrived CFO asks one of our clients a version of the same question: "Isn't SAP a bit old-fashioned now? Shouldn't we be looking at something more modern?" It is a reasonable challenge. SAP has been around for more than fifty years, its licensing can be bewildering, and the cost of moving from ECC to S/4HANA has led some long-standing customers to wonder whether they should stay at all.
We are an SAP partner, so we will declare our interest up front. But Larkspur S/4 Advisory also spends a fair share of its time telling companies where SAP is not the answer, and the honest assessment is more interesting than either the sales pitch or the obituary.
This article looks at where SAP stands in 2026: its installed base and the ECC-to-S/4HANA migration wave, its cloud strategy through RISE and GROW with SAP, business AI and Joule, the role of Business Data Cloud and BTP, and competition from Oracle, Microsoft and NetSuite. We close with where SAP is, and is not, the right fit. It is written for executives and finance and IT leaders weighing a long-term ERP decision.
Why Are People Asking Whether SAP Is Still Relevant?
The question has several sources. Cloud-native competitors market simplicity and speed. The ECC-to-S/4HANA migration is expensive and disruptive, and some companies feel they are being asked to pay to stand still. RISE with SAP contracts have generated real debate about cost and flexibility. Older users still remember SAP GUI and assume nothing has changed. And the AI narrative raises a new question: if AI agents can work across systems, does the underlying ERP matter as much?
These are fair points. But relevance is not about perception. It comes down to two things: whether SAP runs core processes well for the companies that choose it, and whether it is investing in the right direction. On both, the picture is more positive than the skeptics suggest, with some important caveats.
How Important Is SAP's Installed Base and the ECC Migration Wave?
SAP's ERP runs core finance, supply chain and manufacturing processes at a large share of the world's biggest industrial, energy, consumer goods and public sector organizations. That installed base is SAP's greatest asset and its biggest obligation. A substantial portion of ECC customers have not yet completed their move to S/4HANA.
SAP's mainstream maintenance for ECC ends in 2027. Extended maintenance and other transition options mean the migration wave will stretch across several more years rather than ending abruptly. Two consequences follow. Experienced partner capacity is tight and will remain so. And customers who delay may face higher costs and less experienced teams later in the cycle.
In our experience, most ECC customers we speak with plan to stay on SAP, though a meaningful minority are running genuine competitive evaluations. That is healthy. A fair evaluation makes either decision stronger. For the practical differences, see this comparison of SAP ERP vs SAP S/4HANA.
What Is SAP's Cloud Strategy, and Is It Working?
SAP's strategy is unambiguous: move customers to the cloud and keep the core clean. RISE with SAP bundles S/4HANA Cloud, most often Private Edition, with hyperscaler infrastructure, SAP-managed technical operations and additional tools and entitlements under one subscription. GROW with SAP targets midsize companies adopting the public cloud edition. SAP has also been clear that many new capabilities, particularly in AI, arrive in its cloud products first.
What is working: a single contract with clear accountability for the technical stack, standardized operations, and a public cloud edition that has matured noticeably. More midsize companies now consider SAP than did a decade ago.
What draws criticism: RISE contracts can be complex, total cost comparisons with on-premise are rarely straightforward, and some customers worry about flexibility and exit options. Our advice is to model total cost of ownership over the full term, and to treat the decision to adopt S/4HANA separately from the decision to adopt RISE. They are related, but not identical.
Is SAP's Business AI and Joule More Than Marketing?
Joule is SAP's generative AI copilot across its cloud applications. It answers questions in natural language, navigates users to the right app, summarizes information and, in a growing set of scenarios, helps complete tasks. SAP is also introducing AI agents for multi-step processes, alongside embedded AI features in finance, procurement, supply chain and HR applications.
SAP's real advantage is context. It holds the transactional data and the process logic behind it, so its AI can reason about a purchase order or a payment block with business meaning attached. The limitations are equally real. Most capabilities are cloud-first, they depend on SAP Business AI licensing, and they work only as well as the underlying data. Microsoft, Oracle and others are moving fast too.
Our view: SAP's AI is real but uneven, with value concentrated where processes are standardized and data is clean. Customers still on ECC largely cannot access it, which is one of the stronger arguments for a clean-core move to S/4HANA.
What Are Business Data Cloud and BTP For?
SAP Business Technology Platform (BTP) is the layer for integration, extension, data and AI services. It is how customers connect SAP to other systems through Integration Suite, build extensions with SAP Build, and keep customizations out of the core.
SAP Business Data Cloud, introduced in 2025, is SAP's answer to a long-standing problem. Historically, extracting SAP data into other platforms stripped away much of its business context. Business Data Cloud brings together capabilities from SAP Datasphere, SAP Analytics Cloud and SAP BW with curated data products from SAP applications, and includes a partnership with Databricks for data engineering and machine learning. For enterprises building AI on their operational data, this matters. It is still relatively new, so evaluate its maturity against your specific needs and your existing data platform.
How Does SAP Compare With Oracle, Microsoft and NetSuite?
| Competitor | Typical strengths | Where SAP tends to win | Where the competitor tends to win |
|---|---|---|---|
| Oracle Fusion Cloud ERP | SaaS-native finance, regular updates, strong EPM | Complex manufacturing, supply chain, industry depth | Finance-led organizations wanting pure SaaS |
| Microsoft Dynamics 365 | Microsoft 365 and Power Platform integration, broad partner market | Large, complex, multi-country operations | Mid-market firms invested in the Microsoft stack |
| Oracle NetSuite | Fast-to-deploy SaaS, multi-subsidiary support | Heavy manufacturing and global scale | Fast-growing mid-market and multi-entity companies |
| Industry-focused vendors (e.g. Infor, IFS, Epicor) | Deep templates for specific verticals | Breadth, ecosystem and global compliance | Niches where a vertical template fits closely |
The competition is real and, in places, strong. Oracle is a credible alternative for finance-led transformations, Microsoft wins many mid-market evaluations on ecosystem fit, and NetSuite is often the faster path for growing multi-entity companies. A deeper look at the Oracle matchup is in Oracle ERP vs SAP.
Where Is SAP the Right Fit, and Where Is It Not?
SAP tends to be the right fit for complex manufacturing and supply chains, asset-intensive industries such as energy, chemicals and utilities, multi-country groups with demanding statutory and consolidation requirements, and regulated environments. It suits organizations willing to adopt standard processes and invest in program discipline.
It is often not the right fit for small companies with simple needs (SAP Business One aside), services firms where projects and people dominate, organizations without the capacity to run a disciplined program, or companies whose vertical is served better by a specialist. We recently advised a mid-size financial services firm not to move its core ledger to S/4HANA. Its needs were well met by a lighter cloud finance platform, and saying so was the right call.
Key takeaway: SAP remains highly relevant for complex, global and asset-intensive businesses, and its cloud, AI and data strategy is credible. It is not the default answer for everyone, and a fair competitive evaluation is a sign of good governance, not disloyalty.
If you are already on S/4HANA, focus on keeping the core clean and adopting the S/4HANA features you are already paying for.
Conclusion
SAP in 2026 is neither the legacy vendor its critics describe nor the automatic choice its sales teams might prefer. Its installed base and the S/4HANA migration wave keep it central to large enterprises. RISE and GROW give it a coherent cloud model, Joule and Business Data Cloud give it a credible AI and data story, and BTP gives customers a way to extend without compromising the core. Competition from Oracle, Microsoft and NetSuite is real and deserves serious evaluation. The right answer depends on your complexity, ambitions and appetite for disciplined change. If you would like a candid, independent view on where SAP fits your organization, we would be glad to hear from you at Larkspur S/4 Advisory.
Frequently Asked Questions
Is SAP being replaced by cloud-native ERP?
Not broadly. Cloud-native vendors win many mid-market and finance-led evaluations, but SAP remains deeply embedded in large, complex organizations, and SAP's own ERP is now offered as cloud software. The bigger shift is from on-premise to cloud deployment, which is happening within SAP's customer base as much as away from it.
Should we leave SAP instead of migrating to S/4HANA?
Sometimes, but rarely by default. If your business has become simpler, or a competitor fits your industry better, a full evaluation is worthwhile. For complex manufacturing, supply chain or multi-country operations, staying on SAP and modernizing is usually less risky than a full platform change.
What is the difference between RISE with SAP and GROW with SAP?
RISE with SAP is aimed mainly at larger companies and existing SAP customers moving to S/4HANA Cloud, most often Private Edition, with infrastructure and technical operations bundled. GROW with SAP is aimed at midsize companies, often new to SAP, adopting S/4HANA Cloud Public Edition. Exact contents and terms change over time, so check current offerings with SAP or your partner.
Is Joule available on SAP ECC?
Joule is built for SAP's cloud solutions, and SAP has focused its AI development there. ECC customers generally cannot use Joule within ECC; the practical route to SAP's AI capabilities is a move to S/4HANA, ideally in a cloud edition. Confirm current availability for your specific products with SAP.
What is SAP Business Data Cloud?
It is SAP's data offering, introduced in 2025, that brings together capabilities from SAP Datasphere, SAP Analytics Cloud and SAP BW with curated data products from SAP applications. It includes a partnership with Databricks and is designed to keep SAP data's business context intact for analytics and AI.
