RISE with SAP: Impact on Existing On-Premise Licenses and Shelfware

Impact on Existing SAP Licenses: How RISE Affects Your Installed Base

RISE with SAP is a subscription-based offering that fundamentally changes how CIOs and CTOs must manage existing SAP licenses.

When moving to RISE, on-premise licenses for SAP ERP (ECC or S/4HANA) are typically shelved or terminated, meaning you stop paying maintenance and trade in your perpetual rights for a cloud subscription.

This shift can save short-term costs but requires careful negotiation of credits and an understanding of long-term implications, such as losing perpetual use rights and increased reliance on SAP’s subscription terms.

Learn more by reading the https://redresscompliance.com/what-is-sap-rise-sap-licensing-changes-and-the-2027-deadline/SAP RISE overview.

RISE Transitions: From Perpetual Licenses to Subscription Model

RISE with SAP is essentially an all-in-one cloud subscription for SAP S/4HANA, encompassing software, infrastructure, and basic support

Instead of buying SAP licenses outright (a capital expense) and paying annual support, you pay a recurring subscription fee (an operating expense) for as long as you use the service.

This marks a shift from the traditional perpetual license model, where ownership of the software is indefinite, to a term-based license model, where usage rights are limited to the subscription term.

Under RISE, SAP typically measures usage with a unified metric (often Full User Equivalents, or FUEs) rather than the old Named User categories, which simplifies licenses but binds you to a committed user volume.

The key change is that you no longer “own” a software asset; you are essentially renting the ERP system. This has significant impacts on any installed base licenses you previously purchased.

Read Choosing RISE or Traditional SAP Licensing: Strategic Checklist for CIOs.

Converting vs. Shelving Your Existing Licenses

When you migrate an existing SAP ERP system to RISE, a critical question arises: What happens to the licenses you already paid for?

In most cases, those on-premises perpetual licenses must be terminated or put into “shelf” status once you sign a RISE subscription.

Shelved licenses are essentially taken out of active use – you agree not to run your legacy SAP ERP in production once you’re live on RISE.

The upside is you stop paying maintenance fees on those shelved licenses (immediately saving that annual cost).

The downside is that you also relinquish the ongoing rights to use that software moving forward, beyond a defined migration period.

In other words, your existing licenses become inactive; SAP won’t double-charge you for old and new systems at the same time, but you also can’t “double dip” by keeping two live environments long-term.

Dual-Use Grace Period: SAP typically allows a grace period for the dual use of the old system and the new RISE environment during the transition.

For example, you might run your legacy ECC system in parallel with S/4HANA on RISE for a few months to validate data and processes. It’s essential to negotiate this explicitly into your contract.

Ensure there is language allowing a temporary parallel run (often 6 months or more) so that you remain compliant while migrating – you don’t want an audit finding you “using” unlicensed systems during cutover.

After this period, it is anticipated that the old system will be phased out.

Additionally, clarify any rollback options: if the cloud migration is delayed or doesn’t go as planned, can you continue using your old licenses a bit longer? These terms should be documented to avoid compliance issues during the project.

Learn more about assessing cost trade‑offs for existing licenses.

Conversion Programs vs. Shelving:

Before RISE, SAP offered programs such as contract conversions, allowing customers to convert their existing ECC licenses into new S/4HANA licenses (on-premise).

With RISE, however, you’re not converting to another perpetual license – you’re transitioning to a subscription agreement.

The result is effectively shelving the old licenses. They may remain on your books in the name (sometimes kept in an inactive status for record-keeping), but you no longer use them.

If you have other SAP software not covered by RISE (for example, legacy SAP add-ons that you aren’t moving to the cloud yet), you may continue to run them with their licenses and maintenance.

But for any functionality now covered under the RISE contract, the corresponding on-prem licenses will be mothballed.

It’s worth noting that under classic licensing, customers could drop maintenance on unused licenses to save cost (effectively creating shelfware).

RISE enforces this by contract: you won’t pay maintenance on replaced products, but you also can’t use them.

Below is a summary of how a move to RISE impacts your installed base licenses versus staying on traditional licensing:

Learn more about negotiation strategies for licence conversions.

Financial Impact: Maintenance Savings, Credits, and Trade-In Value

One of the immediate benefits of shelving your old licenses is the elimination of annual maintenance fees on those products.

For example, if you were paying $2 million per year in SAP support for your ECC system, that cost will disappear once those licenses are terminated under a RISE deal.

However, against that savings, you must weigh the new subscription fee for RISE.

The goal for many is to make the cloud subscription roughly equivalent to their previous maintenance and infrastructure costs, thereby avoiding budget shocks. SAP has offered conversion incentives to help with this, especially to early adopters of RISE.

Credits for Existing Investments:

SAP will usually provide some credit or trade-in value for the investment you’ve already made in licenses and maintenance.

This isn’t a straightforward refund but rather a discount applied to your RISE subscription quote. For example, if you recently paid your annual maintenance, SAP might prorate and credit the unused portion toward the new RISE bill.

Additionally, if you have a lot of shelfware (unused licenses) from past purchases, SAP may factor that “sunk cost” into a more favorable subscription price.

Negotiation is key here – these credits are not standardized or guaranteed. Enterprises have seen discounts ranging from modest to very significant, depending on the strategic value of the deal and its timing.

Timing Considerations:

The timing of your move can significantly impact the financial implications of existing licenses. SAP’s incentive programs have evolved over the past few years.

Early RISE adopters (around 2021) enjoyed very generous credits; in some cases, nearly 100% of their remaining maintenance value was credited, making the first year of RISE almost cost-neutral.

As time passes and the 2027 ECC support deadline approaches, SAP’s urgency to entice customers down this path diminishes. Learn more about the 2027 ECC deadline and licence conversion options.

For instance, a large manufacturer that paid approximately $5 million in annual SAP maintenance and moved to RISE in 2021 received roughly $4.5 million in credits, covering most of the subscription cost.

If that same company waits until 2025 or 2026, the credit on the table might be only around $ 3 million.

The difference – essentially $2M of additional cost left for the customer – means they’d be double-paying during the transition (paying full RISE subscription while still having recently paid maintenance).

Multiply that gap over several years, and it significantly increases the total cost.

In short, acting sooner can secure better trade-in value for your licenses, whereas delaying could reduce the financial benefit and leave you carrying more of the subscription cost yourself.

Avoiding Double Payments:

To maximize value, align your RISE start date with your maintenance renewal cycle.

For example, if your SAP maintenance is billed annually in January, consider starting the RISE subscription immediately after the maintenance period ends (and negotiate a credit for any prepaid support).

This prevents overlap where you’re paying for cloud and on-prem support simultaneously. Also, evaluate if you can co-term the end of maintenance on certain products to sync with the RISE contract commencement.

The ideal scenario is a clean cutover: as you stop paying maintenance, that budget is immediately redirected to the RISE subscription.

Any gap or overlap is essentially lost money.

Many companies also use this opportunity to trim what they don’t need – e.g., discontinue maintenance on modules that won’t be used in S/4HANA, so they aren’t included in the RISE scope at all.

It’s a chance to eliminate shelfware from your contract and only pay for what you truly need going forward.

Real-World Example – License Trade-In:

A global enterprise negotiated its RISE deal, which heavily subsidized the first-year subscription. They had $10 million in unused SAP licenses (shelfware from prior over-purchasing) and were paying $5 million per year in maintenance.

SAP offered a credit roughly equal to one year of maintenance plus a portion of the shelfware value, effectively cutting the initial RISE fees by ~50%. Over a 5-year contract, this saved them tens of millions in overlap costs.

However, a different firm that approached SAP later received only a maintenance credit with no consideration for shelfware, resulting in a higher net subscription cost.

The lesson is to make a case for your sunk investments – document your unused licenses and maintenance spend and use that as leverage in the RISE negotiation.

SAP sales teams do have flexibility (within approval limits) to apply one-time credits or discounts for customers transitioning a large install base to the cloud.

Read RISE with SAP Tiers and July 2025 Premium Packaging Changes.

Perpetual Rights Lost: Lock-In Risks and Exit Strategy

Moving to RISE not only affects finances – it changes your long-term leverage and risk profile.

Under the old model, owning perpetual licenses meant you always had a fallback: you could theoretically run your SAP software indefinitely on-premise, even if you stopped paying for support (albeit without upgrades or official help).

With RISE’s subscription model, if you stop paying, your ERP effectively turns off.

There is no perpetual usage right to fall back on, which significantly increases vendor lock-in.

SAP’s strategy is clearly to shift customers into “lifetime” subscriptions, where leaving the platform is difficult because you’d have to start over with a new system or pay SAP whatever it demands to keep going.

For CIOs and CTOs, this means planning for the endgame up front. Negotiating an exit clause or at least acknowledging the risk is critical.

Some savvy customers try to negotiate an option that, if they choose not to renew the subscription, allows them to convert their investment into a perpetual S/4HANA license to run on-premise (or retain the right to reinstatement of their old system licenses).

SAP typically does not offer this by default – once you’re in the cloud, they want to keep you there. But bringing it up in negotiations can sometimes lead to creative solutions (at the very least, making SAP aware that you have a contingency plan can improve your bargaining position).

Renewal Terms Protection:

Because you won’t have the same leverage at renewal (it’s hard to threaten to walk away from SAP when all your data and processes are in their cloud), it’s wise to lock in certain protections in the initial contract.

For example, insist on a cap on subscription price increases at renewal (e.g., no more than ~5% per year or a fixed renewal price).

Additionally, consider seeking flexibility to adjust your user counts at renewal if your business has changed – standard RISE deals often restrict user reductions.

Still, you might negotiate terms to scale down in cases of divestiture or downturn. Without these, you could face a steep cost hike or be stuck overpaying for unused capacity in future years.

No Turning Back Without Cost: Practically, once you shelve your old licenses and go to RISE, returning to an on-premises model later would likely require buying new licenses from scratch.

Any contractual “conversion” of your subscription back to perpetual would have to be negotiated from a position of weakness (since SAP knows you don’t have a current license).

This underscores the importance of being sure about the move to the cloud. If you have doubts or want to hedge, one strategy is to move in phases rather than all at once: for instance, migrate a portion of your landscape to RISE while keeping some core systems on-premises for a while.

However, note that SAP’s incentive programs usually require a full contract conversion to RISE for the main ERP – partial moves might not yield the same credits and can complicate your contracts.

In summary, RISE brings simplicity and potential cost predictability in the short term, but you are trading away the autonomy and flexibility that came with owning perpetual licenses.

CIOs should weigh the reduced infrastructure burden and modern capabilities against the loss of direct control over licensing.

The impact on existing licenses is at the heart of this trade-off: you’re effectively handing the keys back to SAP in exchange for a service.

Ensure the deal takes into account your past investments and future needs to avoid regret after you’ve decommissioned your old systems.

Recommendations

• Inventory Your Licenses and Usage: Before negotiating RISE, take stock of all your current SAP licenses – including those that are heavily utilized and those that are unused – and determine your maintenance expenses. This baseline will help you argue for appropriate credits (e.g. credit for unused licenses or pre-paid support) and ensure you only subscribe for what you need.
• Negotiate Conversion Credits Upfront: Don’t Accept the First Quote. Push SAP for trade-in credits for both your existing license investments and any remaining support period. For example, if you renewed maintenance last quarter, negotiate to apply that payment toward the RISE fee. The more value you can reclaim, the lower your effective cost.
• Align Timing to Minimize Overlap: Plan your RISE contract start date to coincide with the end of a maintenance cycle, thereby minimizing overlap and ensuring a seamless transition. Avoid periods where you’d be paying for on-prem maintenance and RISE subscription simultaneously. It’s better to start right after a maintenance period or negotiate a delay in maintenance renewal once a RISE deal is signed.
• Include a Dual-Use Period in the Contract: Ensure the agreement explicitly permits you to run legacy systems in parallel with RISE for a reasonable time. Define the length (e.g., 6-12 months) for transition, and clarify that you won’t incur extra licensing fees during this period. This protects you during data migration, testing, and user training phases.
• Plan for an Exit (Even if You Don’t Expect One): As a contingency, discuss what happens at the end of the term if you choose not to continue. While you may not get a built-in conversion to on-premises, raising the question can lead to contract clauses regarding data export, extended read access, or assistance when migrating off SAP. At a minimum, negotiate gentle renewal terms: cap price increases and allow for right-sizing at renewal so that cost jumps do not catch you off guard.
• Retain Some Perpetual Rights (if possible): If your risk assessment calls for it, you might keep a subset of licenses (like a dev system or a fail-safe environment) with active maintenance as a backup. While this isn’t standard, some customers maintain a small on-premises license footprint (or third-party support contracts) for critical systems during the transition, in case the cloud journey encounters obstacles.
• Leverage Bridge Options Only if Necessary: If you’re unlikely to transition fully by 2027, be aware of SAP’s extended maintenance (to 2030) and RISE Private Edition transition options (the “bridge” to 2033). These are expensive last-resort measures. It’s better to utilize SAP’s incentives now for S/4HANA than to pay a premium later for maintaining ECC. Use the looming deadlines as negotiation leverage – SAP knows customers who miss deadlines have limited choices.
• Monitor Value Throughout the Term: Treat the RISE contract as an ongoing value proposition. Regularly benchmark what you’re paying (per user or workload) versus what an on-prem model would cost you. This can inform your strategy for renewal negotiations. If the value starts to erode (e.g., SAP’s cloud discounts wear off in later terms), you want to catch it early and consider alternatives or renegotiate.
• Educate Stakeholders: Ensure your finance and procurement teams understand that transitioning to RISE means capital assets (licenses) will become an operational expense. Prepare them for the accounting change and the importance of renewal management. This will help secure internal buy-in for necessary contract provisions, such as setting aside funds for future subscription renewals or potential cost increases.

FAQ

Q1: What happens to our existing SAP licenses when we move to RISE?
A: In a RISE migration, your existing SAP ERP perpetual licenses are typically shelved – you’ll stop using them for production once the new S/4HANA cloud system is live. You also stop paying annual maintenance on those licenses. Essentially, those old licenses go inactive. You transition to using the cloud subscription license provided under RISE instead. SAP may allow a short overlap where both the old and new versions run in parallel. Still, after that, your on-premises licenses are no longer in use (and usually cannot be reactivated later without a new purchase).

Q2: Do we get any credit for the money we’ve already spent on licenses and maintenance?
A: Yes, SAP typically offers credits or discounts as an incentive. If you have recently paid maintenance fees, a prorated portion can be credited toward the RISE subscription. SAP may also account for the investment in your existing licenses by reducing the subscription price (this is essentially a trade-in value). The extent of the credit depends on your negotiation and timing. Early movers to RISE have seen very generous credits (sometimes covering most of the first-year cost), whereas those who migrate later might get a smaller offset. It’s crucial to negotiate this – come prepared with figures for your historical spend to maximize the concession.

Q3: Once on RISE, can we ever go back to our old system if needed?
A: Not easily. When you sign up for RISE and shelf your old licenses, you are committing to the subscription model. After a certain point, you generally cannot simply revert to your old SAP ECC system using the old licenses, as you likely terminated maintenance (and possibly the license rights) as part of the RISE deal. If you later decide to leave RISE, you will not have a valid license to run S/4HANA on-premises unless you negotiate an alternative arrangement in advance. You’d have to negotiate a new contract or possibly exercise an option if one was built into your agreement. This is why it’s essential to negotiate an exit strategy clause upfront, or at least be aware that leaving RISE may mean starting from scratch with a new ERP solution.

Q4: How do RISE subscriptions handle things like user count changes or adding/dropping modules?
A: The RISE model is less flexible than traditional licensing. You commit to a certain number of users (often measured in FUEs) and specific cloud services for the duration of your contract (e.g., 3 or 5 years). You can increase the number of users or add extras (at a higher cost), but you generally cannot reduce your user count or remove services until the contract expires. In contrast, with on-prem licenses, you could stop using some modules or shelf-unused user licenses (though you’d already paid for those upfront). Under RISE, you should size your subscription carefully and negotiate room for adjustments at renewal. Ensure your contract details how adding new users is priced and seek any possible allowance for downsizing if you divest or have a downturn (even if it’s only at renewal time). SAP’s standard stance is “no reductions mid-term,” so getting this flexibility requires special negotiation. Learn more about FUE licensing vs existing named users.

Q5: What should we watch out for in the contract to protect our interests long-term?
A: Pay attention to renewal terms, exit clauses, and service-level commitments. Specifically:

• Renewal Cap: Negotiate a cap on price increases at renewal (for example, limit any hike to a small percentage). This prevents sticker shock after your initial term.
• Flexibility: Try to include terms that allow you to adjust the subscription scope at renewal or for significant business events (mergers, divestitures).
• Exit Assistance: Ensure you have the right to your data and a cooperative exit process if you decide to leave the RISE cloud. While you may not receive a full license conversion back to on-premises, you can negotiate for data export support and possibly a transition period.
• Dual Operation Clause: As mentioned, have a clause for parallel run during migration to avoid any licensing gaps.
• Service Levels and Support: Since you’re relinquishing control of your infrastructure, ensure the SLA (uptime, support response) in the contract aligns with your business requirements and understand the penalties or remedies in place if SAP fails to meet them.
  All these points help ensure that when you move to RISE, you are not caught off guard later by cost escalations or inflexibility.

Read about our SAP Advisory services for Rise.

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