French Energy Provider Secures 35% Savings and Local Data Sovereignty in RISE with SAP Agreement
Background
A leading energy and utilities company in France (serving millions of customers) was negotiating a move to RISE with SAP for its SAP ECC systems.
The company’s SAP landscape spanned finance, asset management, and customer billing. SAP’s RISE offering promised a cloud migration to S/4HANA under a single contract.
However, the utility firm was concerned about handing over control of sensitive infrastructure and data, as well as the cost-benefit analysis given its existing private cloud setup.
Challenges
- Cost vs. In-House Cloud: The initial RISE quote was much higher than the company’s current SAP running costs. The package bundled SAP’s cloud infrastructure and services at a premium. The utility had an optimized private cloud for SAP, so SAP’s offer seemed to charge them for capabilities they already had. They needed a clear financial upside – otherwise, sticking with their in-house cloud (or a local sovereign cloud provider) made more sense.
- Data Residency and Control: By law and policy, certain customer and grid data are required to remain within the French territory. The standard RISE contract didn’t explicitly guarantee local data residency or EU-only support. The company required assurances that moving to RISE wouldn’t violate data sovereignty rules or result in support being handled outside Europe.
- Bundled Services Mismatch: SAP’s offer included components (e.g., SAP Analytics Cloud, SuccessFactors) that the company either had separately or didn’t plan to use. These add-ons inflated the cost. Also, the contract was rigid – a single agreement for multiple business units. The utility operates divisions (generation, distribution, and retail) and wanted flexibility to scale services per division, rather than offering a one-size-fits-all subscription.
How Redress Compliance Helped
- Value Analysis & Price Negotiation: Redress performed a detailed cost-value analysis. They showed that much of SAP’s cost was a cloud infrastructure markup and redundant services. Redress pressed SAP to remove those extra charges and apply steep discounts to meet market rates. Benchmarks from other EU deals informed a target of more than 30% off. They made clear the client was ready to stick with its private cloud if SAP didn’t significantly improve the financials.
- Data Sovereignty Protections: A critical achievement was securing SAP’s contractual commitment to French data residency. Redress negotiated clauses specifying that all client data would be hosted in EU/France data centers and governed by EU privacy standards. The contract stipulated that support would also be handled from within the EU. These guarantees allowed the company to adopt SAP’s cloud without violating local regulations or compromising oversight of where data is stored and managed.
- Customized Scope & Flexibility: Redress tailored the RISE scope to the client’s needs. They negotiated out unnecessary components – for instance, removing SuccessFactors, which the client already licensed separately. Pricing was adjusted accordingly. Redress also structured the agreement so each major division’s usage could be scaled independently. This modular approach enables the utility to allocate SAP resources and costs by division, rather than being locked into a single, aggregated allotment.
- Risk Mitigation & Exit Plan: Lastly, Redress built clear renewal terms and an exit strategy into the contract. They secured a cap on annual price increases (no more than 5%) to prevent cost creep. They also inserted a clause allowing the client to adjust the contract or even revert to on-premises systems later without punitive fees, should regulations or needs change. This “escape hatch” gave the risk-averse utility confidence that it wasn’t irreversibly tied to SAP’s cloud.
Outcome and Impact
The negotiated RISE agreement gave the French energy provider what it needed: significant savings and firm control over data location.
SAP conceded a substantial price reduction – about 35% lower than initial – bringing the 5-year cost down to a level that undercut the company’s in-house cost projections. This made the cloud migration financially attractive, freeing budget for other digital initiatives.
Equally important, the utility’s strict sovereignty and security requirements were met.
They received written guarantees of French/EU data residency, as well as locally governed support. In practice, they gain SAP’s cloud benefits (automatic updates, scalability) without compromising compliance. Auditors and regulators are satisfied that customer data remains under French jurisdiction and oversight.
The final contract is also far more flexible and aligned with the client’s structure.
By dropping unused services and enabling per-division scaling, the utility won’t pay for shelfware or one business unit’s excess on behalf of another. Each division can ramp up or down SAP usage as needed under the RISE umbrella, providing unprecedented transparency and control in a cloud deal.
For the utility’s leadership, the outcome is a win on multiple fronts: cost efficiency, compliance assurance, and operational flexibility. SAP’s offer was transformed into a true solution for their business rather than a rigid vendor mandate.
Client Quote
“Our non-negotiables were clear: cost savings and data staying in France. Redress made sure SAP listened. They slashed the price and built in the guarantees we needed on data sovereignty. We got a tailored solution rather than a generic package – and that’s 100% due to having Redress as our advocate. It’s a cloud deal we can sign with confidence.” – CIO, French Utility Company
Call-to-Action
Global or local, your SAP deal should reflect your unique requirements. If you’re concerned about cost or compliance in a RISE with SAP contract, contact Redress Compliance for a free consultation. We’ll help you negotiate terms that protect your budget and your data sovereignty, turning SAP’s cloud into an asset rather than a risk.
Read about other Rise with SAP Case Studies.
Read about our Rise with SAP Contract and Licensing Advisory Services.
