Global enterprises running SAP are at a crossroads. With SAP's push toward cloud-based solutions, CIOs and procurement leaders must evaluate whether to embrace RISE with SAP — an all-in-one cloud subscription — or continue with traditional on-premise SAP licensing. This playbook compares the two models across cost structure, licensing mechanics, deployment options, flexibility, risk, and negotiation strategy.
RISE with SAP (often described as "business transformation as a service") is a comprehensive subscription bundle designed to simplify the move to SAP S/4HANA in the cloud. Introduced in 2021, it consolidates several components into a single contract and fee:
The core ERP software provided on a cloud basis — either the public cloud edition (multi-tenant SaaS) or the private cloud edition (single-tenant managed instance).
Infrastructure is included and managed by SAP through hyperscaler partners (AWS, Azure, Google Cloud) or SAP's own data centres. No need to purchase or maintain hardware.
Software updates, patches, and version upgrades are handled as part of the subscription, with defined SLAs for system availability.
Includes SAP Business Process Intelligence (Signavio), SAP Business Network Starter Pack, and BTP credits for building extensions, integrations, and analytics.
One contract, one accountable vendor. SAP is the primary provider for the entire stack — application and infrastructure — simplifying vendor management.
RISE transforms the enterprise from buying software licences and running them on self-managed infrastructure to an all-in-one cloud subscription. SAP positions it as an accelerator for digital transformation, particularly for existing ECC customers needing to transition to S/4HANA before the 2027 end-of-support deadline.
| Dimension | Traditional On-Premise (CapEx) | RISE with SAP (OpEx) |
|---|---|---|
| Upfront Cost | Significant perpetual licence fee capitalised on balance sheet | No large upfront fee — recurring subscription covers everything |
| Ongoing Costs | Annual maintenance (20–22% of licence), hardware refresh cycles, data centre costs | Predictable annual subscription fee — infrastructure, support, and upgrades included |
| Budget Model | Spikes upfront, then ongoing maintenance + periodic hardware investment | Costs spread evenly over time — regular operating expense |
| Long-Term Economics | Licence is a one-time asset; ongoing costs = maintenance + infra only | Cumulative subscription fees may equal or exceed perpetual model over 7–10 years |
| Cost Risk | Customer bears upgrade, infrastructure, and operational cost risk | Vendor bears operational cost risk; SAP motivated to keep system efficient |
When moving to RISE, existing S/4HANA or ECC licences are typically transitioned to a subscription. SAP may offer credits equivalent to a portion of the first-year RISE fees (up to 60% for on-prem S/4HANA customers migrating to RISE). These incentives can offset cloud migration costs. However, if you recently invested in hardware or a hyperscaler contract, switching to RISE might make those assets redundant — weigh the remaining value of current infrastructure before committing.
RISE introduces Full Usage Equivalents (FUE) — a unified metric that abstracts user licensing into a single currency. Instead of buying fixed counts of each user type, you contract for a number of FUEs that cover all types of users.
| User Type | FUE Weight | Equivalency | Traditional Named User Equivalent |
|---|---|---|---|
| Advanced Use | 1.0 FUE | 1 user = 1 FUE | Professional User — broad SAP access |
| Core Use | 0.2 FUE | 5 users = 1 FUE | Limited Professional — restricted modules |
| Self-Service Use | ~0.033 FUE | 30 users = 1 FUE | Employee Self-Service — occasional access |
| Developer Access | 2.0 FUE | 1 user = 2 FUE | Developer — deep system technical access |
Avoid granular tracking of each user type. You're compliant as long as total FUEs stay within your purchased count.
Reallocate users between roles internally without renegotiating licence types. Prevents "shelfware" and unused licence categories.
Indirect/API interactions are licensed through FUE and included document allowance rather than requiring separate licences — a major pain point resolved.
Under on-premise licensing, you purchase specific quantities of each user category (e.g., 500 Professional, 100 Limited Professional). If needs change, rebalancing is cumbersome and often requires engaging SAP. Indirect access was a notorious compliance risk — third-party applications or external users accessing SAP data needed separate licence coverage. The FUE model eliminates this friction by aggregating all usage into a single metric.
RISE offers two primary deployment flavours, both SAP-managed subscriptions but with significantly different architectures, flexibility, and cost profiles.
| Aspect | RISE Public Cloud | RISE Private Cloud |
|---|---|---|
| Deployment Model | Multi-tenant SaaS (shared environment) | Single-tenant managed instance (dedicated) |
| Customisation | Limited — no core modification. Standard processes only, extensions via BTP. | Extensive — full ABAP customisation and partner add-ons allowed. |
| Functionality Scope | Standard SAP processes; some industry features limited. | Full S/4HANA scope — all industries, legacy custom code supported. |
| Upgrade Cycle | Continuous, SAP-driven (quarterly forced updates). | SAP-coordinated, but customer can schedule within agreed windows (1–2 year cadence). |
| Cost per User | Lower (15–20% less) — economies of scale, shared resources. | Higher — dedicated resources, flexibility premium. |
| Cloud Provider | Chosen by SAP (no customer control over provider). | Customer can choose preferred hyperscaler or region. |
| Ideal For | New implementations, standardised operations, mid-market, two-tier ERP. | Complex enterprise environments, migrating heavily customised ECC, regulated industries. |
Moving to RISE does not mean SAP takes over everything. Understanding the boundaries is critical to avoiding gaps in service or post-signing surprises.
| SAP's Responsibility (Included) | Customer's Responsibility (Not Included) |
|---|---|
| S/4HANA software licences & equivalent Enterprise Support | Implementation and configuration — project execution, process design, data migration, testing |
| Technical infrastructure & basis operations — servers, storage, networking, provisioning, backups, monitoring | Functional management — reports, configuration adjustments, user access roles, training, internal helpdesk |
| Software updates and upgrades — applied by SAP (customer input on timing for private edition) | Custom development — building/maintaining BTP extensions and custom code; adapting customisations to new upgrades |
| SAP BTP consumption credits — for integration, extension, analytics | Third-party integrations — designing, building, testing, and monitoring integrations to non-SAP systems |
| Signavio process analysis tools (starter package) | Peripheral and on-premise systems — any non-RISE systems remain customer-managed |
| SAP Business Network Starter Pack (Ariba, Logistics Network) | Network connectivity — VPNs, direct connections between SAP cloud and your systems (not included) |
| SLA for availability (~99.7% uptime) and standard DR | Data governance & security settings — user identities, role-based access, data privacy, compliance configurations |
| Standard disaster recovery in secondary data centre | Enhanced DR (active-active, shorter RPO) — additional cost if required beyond standard |
RISE shifts technical overhead to SAP but not functional ownership. Ensure you have plans — either internally or with partners — for implementation, custom solutions, integrations, and ongoing business support. The RISE contract can be complemented with additional managed services from SAP or partners for application support and continuous improvement.
Many SAP customers can deploy existing licences on a public cloud under a "bring your own licence" (BYOL) model, treating it as an infrastructure change while maintaining traditional licensing. Here's how RISE compares:
| Dimension | RISE with SAP (Subscription) | Traditional On-Prem / BYOL on Cloud |
|---|---|---|
| Licensing & Cost | Single subscription (OpEx) — software, infra, support bundled. Priced per FUE, locked for contract term. | Perpetual licences (CapEx) + separate maintenance (OpEx) + separate cloud hosting. Annual SAP maintenance subject to +5% increases. |
| Infrastructure | Included & managed — SAP provisions and manages hyperscaler infrastructure. | Customer-provided — you provision and manage cloud IaaS (pay-as-you-go). Can optimise by shutting down off-hours. |
| Customisation | Private edition: same as on-prem. Public edition: constrained to standard processes. | Full flexibility — customise and extend as needed, with full responsibility for maintenance. |
| Operational Control | SAP controls basis operations, maintenance windows, scheduling per contract terms. Limited OS/DB access. | Full control — your team can tune DB parameters, apply patches on your schedule, use any monitoring tools. |
| Support Model | Single vendor — SAP handles application and infrastructure issues under SLA. "Single throat to choke." | Multi-vendor — coordinate between SAP support and cloud provider. You are the solution integrator. |
| Contract Lock-In | Multi-year commitment (3–7 years). Early exit costly. Less leverage mid-term. | Yearly maintenance optional. Cloud contract adjustable. Perpetual licence rights retained even if support cancelled. |
| Innovation Access | Cloud-first features delivered continuously. AI-driven processes, analytics available immediately. | Must upgrade to access new features. Cloud-only innovations may not be available on-prem. |
| Compliance | SAP ensures standard certifications (SOC 2, ISO 27001, GDPR). Regional hosting available. | Customer responsible for infrastructure compliance. Full control over data placement and security configuration. |
Neither approach is universally better. Some enterprises adopt a hybrid — RISE for certain divisions or new implementations, traditional infrastructure for others. RISE offers simplicity and faster cloud benefits; traditional provides maximum control and potentially lower costs for those who manage efficiently. Key question: Do you have the internal capabilities and desire to manage SAP, or would you prefer SAP to handle it?
Need expert guidance evaluating RISE with SAP vs. on-premises for your organisation?
SAP RISE Advisory →SAP often seeks 3–7 year commitments. Longer terms may secure better pricing but reduce flexibility. Negotiate options to adjust volumes, extend for transition periods at the same rates, and clarity on what happens at term end (data transfer, renewal discussions).
Lock in pricing for the full term. If SAP insists on inflation adjustments, negotiate a cap (e.g., max 3% per year). Critically, negotiate a renewal increase cap — without one, prices could jump significantly when you're most locked in. If growth is anticipated, secure tiered volume discounts upfront.
Standard RISE SLA is ~99.7% uptime (~2.5 hours downtime per month). For mission-critical systems, negotiate 99.9% or better. Ensure SLA covers DR (RTO/RPO) and support responsiveness (Severity-1 targets). Negotiate stronger remedies beyond standard service credits — e.g., termination rights after three consecutive quarters of SLA breach.
Clarify exactly what's included: how many sandbox/training systems? Is DR in a secondary site included or extra? Who refreshes test systems with production data? If you need VPN connectivity or specific integrations, confirm support and include in the project plan.
If data must remain in a specific country/region, specify the cloud region in the contract and prohibit relocation. Confirm compliance certifications (SOC 2, ISO 27001, GDPR) in writing. If you need customer-managed encryption keys or identity management integration, discuss and scope those requirements.
Plan the end at the beginning. Negotiate clear rights to full data export and custom configuration upon contract completion. Understand data format and timeframe for extracts. Clarify whether converted perpetual licences can be reactivated if you leave RISE — get reactivation terms in writing.
RISE doesn't include migration services by default. Request credits toward migration services, SAP consulting hours, or partner support as part of the deal. Ensure utilisation of included tools (Readiness Check, custom code analysis) and ask SAP to guide your team through them.
Discuss how acquisitions, mergers, or spin-offs will be handled. What's the price per additional FUE? Can an acquired entity's licences be converted? Can you carve out part of the system for a divestiture? Having a framework prevents costly surprises.
Request the right to benchmark service pricing against market standards and renegotiate if significantly out of line. Maintain the right to audit usage (verify FUE counts) and demand transparency on how consumption is measured and reported.
Indirect access — when non-SAP systems or users use SAP data or functionality indirectly — has been a longstanding concern in SAP licensing. RISE largely neutralises this issue.
In a RISE contract, indirect usage (APIs, intermediate systems, etc.) is allowed under your FUE count and accompanying digital access rights. The public cloud edition comes with built-in digital access metrics, and the private edition includes a digital access licence — often with a generous document allowance or unlimited creation of certain document types without additional fees.
Practically, you don't need to separately count users or devices that indirectly interface with S/4HANA. If you have an e-commerce system creating orders or a logistics system pulling inventory data, these are covered by the RISE subscription.
If indirect usage is exceptionally high (IoT sensors generating millions of records, public website making heavy API calls), ensure SAP is aware during sizing. Very large digital access needs may be priced differently.
If you built a custom mobile app using SAP in the background, count those mobile app users in your FUE estimation (likely as self-service users). As long as overall usage is within FUE and document bounds, you're covered.
Document your interfaces and integrations during negotiation so everyone is aligned on how the system will be used. This prevents finger-pointing later and ensures SAP sizes the environment correctly.
SAP's combative stance on indirect access has softened in the cloud era — they now want customers to integrate SAP with their entire digital landscape. RISE is an enabler by removing licensing friction. CIOs can push forward with integration projects (e-commerce, customer portals, IoT) without the previous anxiety of unexpected bills. Just size your FUE count to include all human and non-human usage.
SAP offered significant credits in late 2023 — up to 60% of the first year's subscription value for customers migrating existing on-prem S/4HANA to RISE. Smaller customers could receive up to 100% first-year credits. These credits can be spent on other SAP services or offset migration costs. SAP is willing to invest upfront to win long-term cloud business — leverage this desire to negotiate a lower total cost.
SAP raised on-prem support fees in 2023 and 2024 (up to +5% per year, linked to inflation) for the first time in years. SAP also signalled that innovations — AI-driven features, advanced process capabilities — would be cloud-only, not offered to on-premises customers. These moves narrow the cost advantage of staying on-prem and shift the long-term analysis toward RISE.
Discounts on RISE subscriptions are typically 10–30% off list price depending on deal size and strategic importance — more modest than the 50%+ discounts common on traditional perpetual licences. However, the value lies in the bundle (software + infrastructure + services), not the discount percentage. Focus on total cost over years rather than discount rate on paper.
Some find RISE slightly more expensive, others equal or cheaper — key factors are how efficiently you currently run SAP and what internal costs you attribute. If your operations are already optimised with low-cost hosting and offshore support, your baseline may be hard for SAP to beat. If you're due for a technology refresh with expensive on-prem operations, RISE's bundled proposal can lower 5-year cost by double-digit percentages.
Don't rely on SAP's projections. Model total cost of ownership for both scenarios over 5–10 years. Include software, hardware, cloud infrastructure, internal staffing, external services, and downtime risks. Engage a neutral third-party consultant if needed. Update the analysis with real quotes as you engage SAP.
Consider how each option fits your broader strategy. Cloud-first, agile organisations benefit from RISE's continuous updates and cloud services. Organisations valuing maximum control, unique competitive processes, or strict compliance may prefer traditional deployment. Involve business leadership — are they willing to adopt standard processes?
If you have a strong basis team with cloud skills, you're well-positioned to manage SAP on a hyperscaler. If not, RISE reduces dependence on scarce skills. Also evaluate existing managed service providers — their offering may compare favourably to RISE.
SAP has a strategic imperative to convert customers to RISE. Engage early but signal you're evaluating all options — upgrading on-prem, other cloud hosting, competitors, or continuing ECC. This encourages SAP to put their best offer forward. Use trial programmes and free assessments SAP offers.
You don't have to do a Big Bang move. Consider migrating a non-production environment first, or rolling out S/4HANA for a smaller division as a pilot under RISE. Negotiate the contract to start paying for production instances only when they go live.
Include provisions for growth (additional FUEs at pre-negotiated rates), M&A scenarios, divestiture, and technology changes. Cap renewal price increases. Secure rights to switch between public and private editions if your needs change.
Never accept the first RISE quote. It's an opening offer with significant room to negotiate. Scrutinise every component — FUE pricing, BTP credits, migration support, SLA levels, DR provisions. Request additional value: training credits, consulting hours, extended dual-use periods.
Consider independent SAP licensing advisers for contract review, negotiation support, and benchmarking. An outside perspective can identify pitfalls and saving opportunities that internal teams may miss — especially for the complex FUE calculations and TCO modelling required.
The pricing landscape for RISE is dynamic. SAP is highly motivated to work with customers to craft compelling deals. That doesn't mean accepting the first quote — it means you have the opportunity to shape the deal. A well-negotiated RISE deal can deliver strong value, but it requires understanding both hard costs and soft benefits. Maintain a clear view of your objectives (cost savings, service quality, innovation) and let those drive the discussion.
Whether you're comparing RISE vs on-premises, negotiating FUE pricing, or planning your ECC exit — Redress Compliance provides independent SAP advisory to protect your investment and maximise value.