SAP RISE Case Study

California Tech Manufacturer Rejects RISE with SAP and Moves to Hybrid Hosting with Tier-2 Cloud Provider

A California-based high-tech manufacturer with 18,000 employees rejected SAP’s RISE with SAP migration guide with SAP offering and instead pursued a hybrid hosting strategy combining its existing data centre with a Tier-2 SAP-certified cloud provider. By purchasing S/4HANA licences outright, SAP contract negotiation strategiesing cloud infrastructure terms independently, and migrating incrementally, the organisation achieved a 20% lower five-year TCO than the proposed RISE deal while maintaining full control of its infrastructure, licensing, and modernisation timeline.

By Redress Compliance SAP RISE Case Study 12 min read
SAP Advisory Services SAP RISE Case Studies California Tech Manufacturer — Hybrid Hosting
📖 This is one of several RISE with SAP case studies. For another RISE rejection scenario, see Texas Oil & Gas: Phased Migration Model. For SAP negotiation strategy, see SAP Contract Negotiation Playbook. For our RISE advisory service, see SAP RISE Advisory Services.
20%Lower 5-year TCO — vs. the proposed RISE with SAP deal, achieved through licence reuse and competitive cloud rates
18,000Employees — California-based high-tech manufacturer running deeply customised SAP ECC
99.9%Uptime SLA — negotiated with Tier-2 cloud provider including financial penalties for missed targets
2027–30Support continuity — standard ECC support through 2027, extended maintenance option through 2030

Background and Challenges

The client is a California-based high-tech manufacturer with approximately 18,000 employees running SAP ECC (ERP Central Component) as the backbone of its operations. With SAP’s 2027 mainstream support deadline approaching, the organisation faced pressure to modernise its ERP landscape. SAP’s RISE with SAP offering — a bundled cloud subscription including S/4HANA Cloud, infrastructure, and managed services — was heavily promoted as the recommended transformation path.

However, the manufacturer’s IT leadership identified fundamental concerns with the RISE model that made it unsuitable for their specific situation.

Control

Vendor Lock-In and Infrastructure Control

RISE required surrendering control of infrastructure to SAP’s managed cloud. The CIO described it as “an all-or-nothing proposition” — accepting SAP’s timeline, terms, and infrastructure decisions. The organisation had an existing data centre and trusted hosting partner, making a full handover to SAP unnecessary and undesirable.

Technical

Deep ECC Customisation

The SAP ECC system was extensively customised for manufacturing processes including real-time shop-floor connectivity, manufacturing execution interfaces, and production-specific workflows. A one-size-fits-all cloud subscription could not accommodate these requirements without significant compromise or costly reworking.

Financial

Long-Term Cost Uncertainty

RISE’s bundled pricing obscured individual cost components. The organisation could not achieve transparent cost visibility into what it was paying for infrastructure, licences, and managed services separately — making it impossible to benchmark or optimise individual elements.

Solution: Hybrid Hosting with Tier-2 Provider

Rather than signing onto RISE with SAP, the manufacturer designed a hybrid hosting strategy that preserved control, flexibility, and cost transparency while still enabling S/4HANA modernisation.

DecisionWhat They DidWhy It Mattered
Hybrid cloud architectureCritical production ECC remained on-premises; dev/test and new S/4HANA environments hosted with Tier-2 SAP-certified cloud providerMaintained real-time shop-floor connectivity for production while gaining cloud benefits for non-critical and new workloads
Perpetual S/4HANA licencesPurchased S/4HANA licences outright using SAP’s conversion programmes from existing ECC entitlements, instead of RISE subscriptionPreserved investment in existing licences; organisation owns its roadmap and migrates at its own pace with no subscription ticking clock
Independent cloud procurementNegotiated cloud infrastructure terms directly with Tier-2 provider, separate from SAP software agreementSecured competitive infrastructure pricing with full cost transparency; avoided RISE’s bundled pricing opacity
Strict SLA protections99.9% uptime commitment with financial penalties for missed targets; flexible exit clauses enabling workload rebalancingAccountability that RISE’s managed service model may not match; exit flexibility to move workloads without heavy penalties
ECC support continuityStandard support through 2027 with extended maintenance option through 2030 at standard 2% annual feeSafety net allowing ECC to run until S/4HANA migration is fully complete; no forced timeline
Licence value carry-overNegotiated to carry over unused SAP licence value into future purchasesProtected against shelfware waste; existing investment applied to new capabilities rather than forfeited

The hybrid setup was enabled through SAP Business Technology Platform (BTP) connectivity and cloud connectors, ensuring seamless integration between on-premises and cloud components. Non-production and development S/4HANA systems were set up in the cloud first, while live ECC production remained stable on existing hardware.

Governance and Migration Approach

The manufacturer implemented a structured governance plan involving both IT and business stakeholders to decide which systems to move to the cloud versus remain on-premises. Decisions were based on latency requirements for factory operations, data sensitivity, and cost.

Manufacturing execution interfaces stayed on-premises. Real-time shop-floor connectivity required low-latency access that cloud hosting could not guarantee. These interfaces remained tied to the on-premises ECC instance throughout the migration.

Innovation moved to the cloud. New initiatives including advanced analytics and IoT integration prototyping were launched in the cloud environment via S/4HANA and SAP BTP services. This demonstrated tangible innovation without RISE — the organisation proved it could modernise and access SAP’s latest platform capabilities on its own terms.

Phased go-live planned. Once thorough testing is complete, the organisation plans a phased S/4HANA go-live in the cloud data centre, with legacy ECC components retired gradually. This avoids a risky “big bang” migration and allows the internal team to build S/4HANA expertise incrementally.

“We proved we could modernise without the RISE umbrella. We stood up S/4HANA in a cloud sandbox and started using SAP’s Business Technology Platform for analytics, all while our core ECC kept running. This hybrid approach lets us transform incrementally, which is huge for a manufacturing business that can’t afford disruption.”
— CIO, California Tech Manufacturer

Results and Outcomes

OutcomeDetail
20% lower 5-year TCOEstimated 20% reduction versus the proposed RISE deal, achieved by reusing existing licences through SAP conversion programmes and securing competitive cloud infrastructure rates through direct Tier-2 provider negotiation
Full infrastructure controlMaintained control of IT landscape — decisions about where workloads run (on-premises vs. cloud), when to migrate, and which provider to use remain with the organisation, not SAP
Complete cost transparencySeparate contracts for SAP software and cloud infrastructure provide clear visibility into each cost component; the organisation pays only for cloud resources it actually uses
Customised SLAs and exit flexibility99.9% uptime with financial penalties; flexible exit clauses enabling workload rebalancing to on-premises or alternative cloud without heavy penalties
Phased S/4HANA adoptionS/4HANA and SAP BTP deployed in cloud for innovation (analytics, IoT) while core ECC processes remain uninterrupted; migration proceeds on business readiness, not vendor timelines
Support continuity through 2030Standard ECC support through 2027 with extended maintenance option through 2030; no forced migration deadline pressure
Improved dev/test performanceModern cloud infrastructure for non-production environments delivered improved system performance and gave the operations team hands-on cloud experience

RISE vs. Hybrid: Key Decision Factors

This case study illustrates the critical decision factors CIOs should evaluate when considering RISE with SAP versus alternative modernisation paths.

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FactorRISE with SAPHybrid Hosting (This Approach)
Infrastructure controlSAP-managed; customer surrenders direct control of infrastructure decisionsCustomer-controlled; full choice of provider, configuration, and workload placement
Cost transparencyBundled pricing; individual cost components (licence, infrastructure, services) are opaqueSeparate contracts; each element benchmarked and optimised independently
Migration timelineSAP-driven timeline; subscription creates pressure to migrate within contract termCustomer-driven; migrate at business readiness with no external deadline forcing pace
Customisation flexibilityLimited; RISE favours standard S/4HANA Cloud with reduced custom code supportFull; perpetual licences and own infrastructure support deeply customised environments
Exit flexibilitySubscription lock-in for contract term; exiting mid-term is costly or contractually restrictedNegotiable exit clauses with cloud provider; workloads can be rebalanced freely
Vendor lock-inHigher; infrastructure, licences, and services bundled through SAPLower; cloud provider can be changed independently of SAP software agreement
Innovation accessIncluded in subscription; SAP BTP and new capabilities are part of the bundleAvailable separately; SAP BTP and S/4HANA capabilities can be purchased and deployed independently

RISE with SAP can be the right choice for organisations seeking a fully managed, turnkey S/4HANA transformation — particularly those without deep IT infrastructure capabilities or existing data centre investments. However, for organisations like this manufacturer that have existing infrastructure, deep customisations, strong IT teams, and a need for cost transparency, the hybrid approach delivers superior outcomes. See SAP RISE independent SAP advisory services Services.

Lessons for CIOs Evaluating RISE with SAP

1. RISE is not the only path to S/4HANA. SAP’s marketing positions RISE as the default modernisation route, but perpetual licensing with independent hosting remains a fully supported option. Evaluate both models against your specific requirements before accepting RISE as the only choice.

2. Separate infrastructure from software decisions. Bundled pricing obscures individual cost components. By negotiating cloud infrastructure and SAP software separately, this organisation achieved transparent cost visibility and the ability to benchmark each element competitively.

3. Preserve existing licence investment. SAP’s conversion programmes allow organisations to apply existing ECC licence value toward S/4HANA. Negotiate licence value carry-over to protect against shelfware waste and avoid paying twice for capabilities already purchased.

4. Negotiate SLAs and exit clauses independently. RISE’s managed service model may not provide the same SLA specificity or exit flexibility available through direct cloud provider negotiation. Strict uptime commitments with financial penalties and flexible exit terms are achievable in direct provider relationships. See SAP Contract Negotiation Service.

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5. Migrate incrementally, not in a big bang. This manufacturer proved that deploying S/4HANA in a cloud sandbox for innovation while keeping core ECC running delivers modernisation benefits without business disruption. The phased approach de-risks the S/4HANA journey and builds internal expertise before full go-live.

6. Engage independent advisory before committing. SAP’s account teams are incentivised to sell RISE. Independent advisors evaluate RISE proposals against alternatives, benchmark pricing, identify negotiation leverage, and ensure the chosen path aligns with the organisation’s long-term interests. See SAP Licence Optimisation Services.

Evaluating RISE with SAP? Get Independent Analysis First.

Redress Compliance provides vendor-independent RISE with SAP advisory. We evaluate RISE proposals against alternative paths, benchmark pricing, identify negotiation leverage, and ensure your S/4HANA modernisation strategy aligns with your organisation’s operational and financial requirements — not SAP’s sales targets.

Book a Free Consultation → SAP RISE Advisory Services
📘 This guide is part of our SAP Licensing Knowledge Hub — your comprehensive resource for SAP licensing, RISE migration, and cost optimization.

Related Resources

FF

Fredrik Filipsson

Co-Founder, Redress Compliance

Fredrik Filipsson brings over 20 years of enterprise software licensing expertise, having worked directly for IBM, SAP, and Oracle before co-founding Redress Compliance. He advises global enterprises on complex licensing challenges and large-scale contract negotiations across Oracle, Microsoft, SAP, IBM, and Salesforce from offices in Fort Lauderdale, Dublin, and Dubai.

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