The Real Impact of SAP’s Tariff Spin and Restructuring

Where global policy meets enterprise technology, a company’s true strategy starts to show. SAP just delivered solid headline numbers for Q1, but those numbers are carrying more pressure than pride. Eight percent year-over-year revenue growth and a return to operating profit sound impressive. Behind that, though, is a restructuring plan involving up to 10,000 employees and an attempt to turn geopolitical instability into a marketing advantage. While it is a quarterly update, it's also a test of how enterprise software leaders behave when conditions tighten, customers get cautious, and the long-term vision starts to blur.

No matter if you run SAP systems or not, there are lessons to be garnered from software vendors that leverage disruption to cash in on meaningless upgrades or hollow support packages. It’s important that you go into a transformation with eyes wide open regarding agendas and a deep understanding of the corruption in the enterprise tech industry. Though SAP typically leads the way, all tier I and (some) tier II vendors see market disruption as a time to sell more software as a solution, even when technology has very little to do with the root problem.

So, what can we learn from this situation? To start, we need to understand the current climate.

The Latest on Tariffs

Tariffs are obviously making the headlines in this time of uncertainty for domestic and global organizations, especially as enterprise technology strategies are being reassessed in response to shifting economic pressures. Trade barriers have popped up across industries and regions, forcing companies to rethink sourcing, compliance, and delivery. It has now begun to feel like survival instead of an opportunity for innovation.

SAP wants you to believe tariffs are a tailwind. SAP's leadership is positioning global instability as a demand trigger for planning tools, compliance software, and intelligent supply chain systems. That narrative sounds convenient, but the reality is drastically different. Tariffs increase costs, limit options, and push companies into reactive mode. Which in turn is delaying the demand for digital transformation, not accelerating it.

Enterprise buyers aren't looking for software that spins complexity into sales. They want tools that help them adapt, stay compliant and stay ahead and SAP’s messaging suggests that pressure equals progress. The real impact of tariffs is operational strain, and if the business case for your transformation starts with a border tax, it’s worth asking who really benefits.

That brings us to what SAP is actually doing.

Restructuring Without Direction

SAP confirmed that about 3,000 employees have exited so far, with many more potentially on the chopping block. Executives describe this as a flexible approach, a buffer they can shape based on economic changes. When you take a bird's-eye view of the matter, it appears SAP is reframing itself as adaptive despite the obvious questions of: Why now? Is it really just to maintain flexibility in a volatile time?

What they are not describing is a clear path forward. Retraining and rehiring are mentioned, but without a roadmap or transparency. The message to the market is one of agility. This vague mission is creating a reality for customers that is driving increased uncertainty. It becomes harder to know if your long-term technology partner has the same capabilities it had last year. It becomes harder to trust that the same team will be there when it is time to renew, expand, or troubleshoot.

The strategy should provide clarity. Right now, SAP’s restructuring leaves too many open questions, especially given that it is forcing a migration from ECC to S/4HANA by 2027.

Tariffs Are Not a Growth Strategy

SAP’s CEO suggests that the company benefits from tariffs. According to leadership, uncertainty creates demand for planning tools, compliance software, and intelligent supply chain systems. In theory, that makes sense. In practice, it reads more like a stretch. Does the restructuring of the organization really show signs of vitality and growth? At the end of the day tariffs do not drive digital transformation, instead they drive risk management and operational triage. SAP’s optimism sounds disconnected from the cost-cutting and chaos that many global companies are navigating. If the strategy is to position SAP as a solution to every global policy issue, that strategy needs more substance and less spin.

Enterprise buyers are looking for resilience, not rhetoric, in these moments. They want tools that work and stable vendors. Selling confidence during volatility only works when the foundation is solid.

Stop paying $30K+ for a shortlist. Leverage our free shortlist generator and customize your business goals.

Cloud Momentum or Forced Migration?

SAP points to a rise in cloud migration interest in its core European market. It claims this is a sign of progress. That may be true, but there is another explanation worth considering. SAP has spent the last few years narrowing support for legacy enterprise technology systems and pushing customers toward cloud products that are still evolving. For some users, migration is not a strategic decision. It is a requirement created by shrinking support, limited innovation in on-premise enterprise technology, and pressure from sales teams. The danger here is mistaking movement for progress.

Customers might be moving to SAP’s cloud because they feel cornered, not because they feel ready. If the platform they are moving to is not mature enough to handle the complexity of their operations, then this is not growth. It is exposure. Although SAP boasts of increased cloud migration, the situation is more nuanced than it lets on. Shocker.

Talent Churn Creates Customer Risk

SAP’s CFO referred to a “cushion” (wdym?!) of several thousand employees who can be shifted depending on the market. That language might make sense internally. Externally, it creates concern. Enterprise customers rely on consistent, experienced teams to manage implementations, integrations, and support. When experienced talent leaves, it takes context with it. New talent often arrives without the historical knowledge to solve nuanced problems. This introduces delays, errors, and instability into environments that are already complex.

The workforce restructuring is going to have a real impact on delivery, especially for customers relying on SAP’s deep bench of expertise. The company has not yet communicated how it plans to retain institutional knowledge or maintain a consistent customer experience during this transition. This is something to be concerned over for current customers. Customers are looking for the stability from their providers not increased uncertainty.

Vision Without Execution

SAP continues to talk about its investments in AI, Business Data Cloud, and intelligent compliance. These are the right areas to invest in, and the vision is aligned with where the industry is heading. The problem is not the direction, it is the disconnect between the messaging and the operational state of the company. You cannot promise long-term innovation while pulling apart the teams responsible for delivering it. The structure must support the strategy. Right now, SAP is describing a destination while actively reworking the map. Customers evaluating these tools should take a hard look at what is functional today, what is still in development, and what will be supported tomorrow.

What This Means for Customers

SAP is trying to present this moment as one of transformation, in reality it is a moment of exposure. The company is under pressure. That pressure is being transferred to customers in the form of shifting product roadmaps, personnel changes, and aggressive marketing. It is contradictory to claim that tariffs are beneficial for business while simultaneously undergoing a "restructuring" process, all the while pulling support and suggesting that cloud migration is on the rise. In reality, this shift is more accurately described as a forced migration rather than a voluntary or strategic move.

If you are already on SAP, this is a time to validate your dependencies, revisit your roadmap, and consider what alternatives exist for critical functionality. If you are considering SAP for a new project, this is a time to demand specificity, not vision. Ask what is live, what is supported, and what will be maintained for the next five years. The key here is recognizing the difference between strategy and storytelling. SAP wants to sell stability during a storm. The best thing customers can do is look past the message and examine the foundation.

Key Takeaways

Clients are often hesitant to challenge vendors, but transparency and trust go hand in hand. If your vendor is in the news, you have every right to ask tough questions. If they have nothing to hide, they should welcome the conversation. Here are some key questions you should be asking:

• How will this news affect our current systems and ongoing implementation? What steps are you taking to ensure continuity and minimize disruption?

• What are you doing to support customers impacted by tariffs, geopolitical instability, or supply chain disruption? Have you adapted pricing models, delivery timelines, or resource allocation strategies?

• Why are you recommending new technology now, when you know our organization is under pressure? Is this truly a business need, or an upsell?

• Can you help us redesign our processes to better handle shifting demand and changing conditions? How will you align technology with operational realities, not just features?

• What internal changes are you making to rebuild trust and improve customer outcomes? Have there been leadership changes, governance updates, or shifts in product roadmap priorities?

• Are you prepared to renegotiate terms or offer flexibility in light of this situation? What protections are you offering clients to reduce risk?

• How can we validate your future claims and roadmaps moving forward? What metrics, references, or third-party validations can you provide?

Remember, this is YOUR project. SAP is not your business, even if you run their software. You pay them, act like it.

We always enjoy hearing your feedback on our contents so we invite you to send us feedback directly at info@theconfluencial.com. Please also follow us on LinkedIn, YouTube, Instagram, and Tiktok for more enterprise tech truth telling.

FAQ: Lessons for Enterprise Buyers

Q: What does SAP’s Q1 report really tell us?
A: It signals short-term financial performance masking long-term instability. Restructuring, vague future plans, and geopolitical spin all indicate a company repositioning itself without offering real clarity.

Q: Should non-SAP customers care about this?
A: Yes. SAP’s behavior reflects broader trends in the enterprise software market. If one of the largest providers is restructuring without direction, others may follow. This is a cautionary tale, not an isolated case.

Q: How should CIOs and technology leaders respond?
A: Prioritize due diligence. Push vendors for transparency, question timelines, and clarify what “support” actually looks like post-2027. Don’t buy the story—buy the outcomes.

Q: Are tariffs really driving innovation in enterprise software?
A: No. Tariffs drive compliance and mitigation—not transformation. SAP’s positioning here is more marketing spin than product strategy. Be cautious when software vendors claim they’re the answer to policy volatility.

Q: What does this mean for organizations planning migrations?
A: Proceed with caution. Demand stability, insist on talent continuity, and structure vendor agreements to protect your roadmap, not theirs. Migrations must be led by business needs, not vendor pressure.