A comprehensive CIO guide comparing RISE with SAP subscription costs against self-managed on-premise infrastructure over 5–10 years. Includes CapEx vs OpEx trade-offs, detailed cost breakdown tables, a 5-year TCO scenario, hidden cost analysis, contract commitment risks, and expert recommendations.
RISE with SAP converts a traditional SAP deployment's capital expenditures into an all-in-one operational expense subscription. This offers lower upfront costs and bundled services, but CIOs must carefully weigh short-term cash flow benefits against long-term total cost of ownership. Over a 5–10 year horizon, RISE can accelerate cloud adoption and simplify operations — however, cumulative subscription fees may approach or exceed the cost of owning infrastructure outright. Thorough TCO analysis and strategic alignment are essential.
Large upfront investments in perpetual SAP licenses (capitalized on the balance sheet) and servers, storage, and data center facilities depreciated over years. The benefit is ownership: you own the licenses indefinitely, and hardware is yours to use. However, CapEx-heavy projects strain budgets initially and require executive approval for significant one-time expenditures.
Ongoing subscription fees covering software usage, cloud infrastructure, and SAP's support. No big upfront license cost — expenses are spread as regular operating charges. Attractive for organizations preferring predictable expense streams and easier budget approvals (OpEx often comes from operating budgets with less red tape than capital budgets).
CapEx (own infrastructure) may have higher initial cost but potentially lower run rate later. OpEx (RISE) improves cash flow early but requires ongoing payments. It is akin to buying a house vs. renting — buying means upfront investment and ownership equity, while renting means no upfront cost but you never build an asset, and rent can increase over time.
SAP has marketed RISE as potentially 20% cheaper in TCO over 5 years for S/4HANA Cloud compared to a traditional deployment. In some 5-year comparisons, customers have found RISE's bundled offering 15–20% lower than a like-for-like on-prem setup with premium infrastructure and services.
However, actual outcomes vary widely. If your organization already operates a lean, optimized SAP environment (cost-effective hosting, minimal staffing), RISE might appear more expensive because you are paying SAP for services you handled cheaply in-house. If your landscape is due for heavy investments — aging hardware, looming upgrades — the RISE package can be financially attractive.
At the 10-year mark, the picture can change. On-prem may amortize upfront costs and only incur lower incremental expenses, whereas RISE continues at full rate each year. Many CIOs recognize that cumulative costs may converge — what saves money at 5 years could cost equal or more by year 10. Smart enterprises model multiple scenarios (5, 7, 10 years) to identify the "crossover point" where RISE's OpEx might exceed cumulative CapEx + OpEx of on-premises.
| Cost Component | RISE with SAP (Subscription OpEx) | Traditional On-Prem (CapEx + OpEx) |
|---|---|---|
| Software Licenses | Included in subscription fee — no upfront license purchase | Large upfront perpetual license purchase (CapEx). Can be millions, capitalized on balance sheet. |
| Annual SAP Support | Included — support & upgrades bundled in subscription | ~20–22% of license cost per year (OpEx). Required for patches/upgrades. Can increase slightly year-over-year. |
| Infrastructure | Included — hosting on SAP-chosen cloud is part of RISE package | Customer-provided: on-prem servers (CapEx + depreciation) or cloud hosting (OpEx). Includes data center costs, power, networking, backup. |
| Implementation | Not included — you pay separately for migration, consultants, testing | Not included — same project costs apply. Both models incur this one-time cost. |
| Customization | Limited by edition: Private allows more flexibility; Public has stricter limits. Work to customize is outside subscription. | Full flexibility — you bear all associated costs including dev/test infrastructure and staff. |
| Internal IT Staff | Basis/infra management is largely SAP's responsibility, but you still need internal SAP teams for oversight, customizations, support tickets. Not fully "hands-off." | Full team needed: Basis admins, DBAs, hardware admins. Internal labor or managed services for OS, database, backups, monitoring. |
| Upgrades & Patches | Included as service. SAP ensures system stays current. You may still incur testing and change management costs. | Separate cost/effort. Major version upgrades every few years + hardware refreshes every ~5 years (additional CapEx). |
| Contract Commitment | 3–5+ year lock-in. Early termination is expensive. No residual asset — if you stop, you lose access. | Perpetual ownership. You can use software indefinitely. Annual maintenance is at your discretion. More flexibility to pause spending. |
Under RISE, you will not have a separate bill for AWS/Azure hosting — it is baked into the subscription — but you also relinquish the ability to bargain that piece down or scale it independently. In a self-managed scenario, you can negotiate cloud infrastructure discounts or choose lower-cost support models (including third-party SAP support) to reduce cost.
Consider a mid-size enterprise implementing SAP S/4HANA over 5 years:
RISE appears slightly cheaper over 5 years ($12.5M vs. $13.5M) with much less upfront outlay — preserving capital. However, at year 5 with RISE you own nothing. You must renew (likely at a revised rate). By year 10, assuming similar rates: RISE totals ~$25M while on-prem totals ~$20M (adding maintenance, infrastructure, plus a possible hardware refresh). The pendulum swings: RISE is more cost-effective in the first half but becomes costlier by year 10.
These numbers are highly sensitive to assumptions. Negotiated discounts, growth in user count, changes in cloud pricing, and additional needs (extra systems, storage) shift the balance. For some companies, the break-even point is around 6–7 years — after that, owning may pull ahead. However, if you plan to modernize or switch systems before then, RISE's flexibility could justify its cost.
RISE contracts run 3, 5, or even 7 years. A longer term can lock in better rates but binds you to the vendor and model. Early termination is generally prohibitively expensive — you owe remaining subscription fees or penalties. If your strategy changes after three years, you must still carry the RISE expense until contract ends.
After the initial term, migrating off RISE is not trivial — SAP has leverage on pricing. It is critical to negotiate renewal price protections upfront (e.g., a clause capping increases at a certain percentage). With on-prem perpetual licenses, you can theoretically run indefinitely without additional cost from SAP aside from optional maintenance.
RISE uses Full Usage Equivalent (FUE) metrics — combining heavy, light, and other user types into a single capacity pool. This simplifies cost management and prevents shelfware. However, you must forecast FUE needs accurately — under-buying means mid-term spend, over-buying means paying for unused capacity.
Owning infrastructure provides more flexibility to pivot: you can drop SAP maintenance to save money, move systems to a different hosting provider, or make targeted investments. With RISE, SAP is your single provider — your cost fate is tied to them for the contract duration.
Preparing for a RISE negotiation? Our SAP specialists can help.
SAP Contract Negotiation →Moving to RISE does not magically include the work of getting there. Your organization must invest in migrating from existing systems to S/4HANA, data cleansing, retraining users, and reimplementing customizations. These one-time costs (often millions for large enterprises) are outside the RISE subscription. Budget for them separately.
RISE introduces a new operating model (especially Public Cloud with quarterly updates). Investment in training IT staff, learning cloud portal management, new testing procedures, and business user training for regularly rolled-out features incurs real costs. Consider the ongoing productivity impact.
A common misconception: "RISE will let us eliminate our Basis team." Many companies find they still need strong internal Basis and SAP CoE teams — coordinating deployments, overseeing integrations, managing authorizations, supporting business needs. You may not reduce headcount as expected.
RISE includes baseline data storage and bandwidth. Exceeding these limits incurs additional costs. Enhanced support tiers, specific compliance certifications, extra HANA memory — all extras. On-prem, you address these individually; either way, extra requirements = extra cost. Ensure they are accounted for when comparing.
If after the contract you want out, you face exit costs: migrating data out, possibly re-purchasing licenses (if old ones were retired), and hiring staff to run systems again. Repatriating from RISE is essentially a second migration project. Factor this into total cost of the RISE path.
Self-managed environments can incur hidden costs through deferred upgrades, delayed hardware refreshes, security vulnerabilities, and eventual big-bang upgrades. If you would not invest in high-availability, DR, and frequent upgrades on your own, RISE's "all-inclusive" cost is partly paying for service levels you would not have provided yourself.
In a self-managed model, significant effort is consumed maintaining operations. RISE could redirect that energy to business innovation. Conversely, if your team is already delivering innovation and keeping systems running efficiently, you may not gain much by offloading to RISE. Every company is different here.
Don't rely on vendor promises. Rigorously model all costs for each option (licenses, maintenance, cloud fees, hardware, staffing, upgrades) over at least 5 years (preferably 10). This internal analysis will highlight the true cost difference and inform your decision with data.
If you aim to minimize CapEx or have a "cloud-first" mandate, RISE aligns well. If owning assets and maximizing long-term ROI is a priority, traditional may be a better fit. Ensure Finance is involved — some prefer OpEx for flexibility, others value CapEx investments. Read our strategic checklist for CIOs.
If you lack deep SAP Basis skills or data center expertise, RISE fills those gaps (at a cost). If you have a proficient, cost-efficient SAP operations team, leverage them — you might run on your own infrastructure at lower cost. Also evaluate if current outsourcing partners could manage SAP for you on cloud as an alternative.
Lock in pricing for the full term and seek a cap on renewal increases. Include flexibility to adjust user counts or scale down non-production systems. Ensure clear terms for data extraction and transition assistance if you leave RISE. See our RISE Negotiations Guide.
Start a pilot on RISE (a new module or regional instance) while keeping core systems on-premises to compare performance and costs. Hybrid deployment can spread cost and risk — albeit with added complexity. Ensure a clear integration plan if mixing models.
SAP is highly motivated to sign RISE deals (it is strategic for their cloud transition). Solicit multiple quotes, let SAP know you have alternatives (staying on ECC longer, considering third-party support, etc.). This pressure can lead SAP to offer credits for existing license value or additional services at no cost.
If you go with RISE, have an exit strategy — avoid customizations that make it hard to leave. If you stay on-prem, modernize in a cloud-ready way (scalable cloud infrastructure, containerized workloads). Preserving flexibility ensures you are not stuck paying exorbitant costs with no leverage later.
For RISE: earmark funds for user training, change management, and additional services (BTP usage, storage beyond default). For on-prem: budget for periodic upgrades, security enhancements, and cloud DR. Planning these costs prevents surprises and enables true apples-to-apples comparison.
If you choose RISE, actively monitor usage vs. spend — utilize included BTP credits, tools, and network access. If staying on-prem, continually rightsize servers, eliminate unused licenses, and negotiate better vendor rates. Review SAP-related spending annually to ensure the chosen model remains viable.
Our SAP licensing specialists help enterprises evaluate RISE vs. on-prem, negotiate optimal contract terms, and avoid hidden cost traps — ensuring you make the right long-term decision.