RISE with SAP: Private vs. Public Cloud — Which Fits Your Enterprise?

Understanding RISE with SAP Cloud Options

RISE with SAP offers two primary deployment models within its all-in-one cloud transition offering:

• Public Cloud Edition (Multi-Tenant SaaS): Shared environment, standardised processes, SAP handles all technical duties. Ideal for organisations willing to adopt SAP best practices with minimal deviation. Rapid deployment, lower customisation.
• Private Cloud Edition (Single-Tenant Managed): Dedicated system on SAP's cloud or a hyperscaler. Full S/4HANA scope including industry-specific solutions. Greater control over configurations, customisations, and upgrade timetable. Higher cost and effort.

Read: SAP ERP Private Cloud Licensing Guide

Cost and Licensing Considerations

Both editions use FUE-based pricing. Private cloud typically costs 20–40% more per FUE than public cloud.

Flexibility vs. Standardisation

Private Cloud allows full customisation — existing ABAP code, customer modifications, and industry-specific solutions carry forward from ECC. Public Cloud enforces a "clean core" philosophy, restricting customisations to BTP-based extensions and key user configurations. Organisations with heavy Z-code dependencies should lean toward private cloud.

Update Cadence and Innovation Pace

Public cloud receives quarterly updates automatically from SAP — you get new features faster but must manage compatibility. Private cloud updates on your schedule (typically annually), giving you control over regression testing and change management. Choose based on your organisation's appetite for change velocity.

Migration and Implementation

Private cloud supports brownfield migration (convert existing ECC system) — faster but carries forward technical debt. Public cloud requires greenfield implementation (fresh start) — cleaner but more effort to rebuild. Many enterprises use private cloud as a stepping stone, migrating ECC first and then gradually cleaning up toward public cloud standards over time.

Read: Migrating from ECC: Licensing & Cost Implications

Security, Compliance, and Governance

Private cloud offers more isolation (dedicated infrastructure) and is often preferred for regulated industries (financial services, healthcare, government). Public cloud relies on SAP's multi-tenant security model. Both can meet most compliance requirements, but private cloud gives you more control over data residency, encryption, and access governance.

Recommendations

1. Start with your customisation reality: If you have significant Z-code or industry-specific modifications, private cloud is the pragmatic path
2. Model TCO for both options: Compare 5-year costs including migration, ongoing operations, and renewal escalation
3. Consider a staged approach: Start private, migrate toward public cloud standards over 3–5 years
4. Negotiate flexibility clauses: Include the right to switch editions mid-term without penalty
5. Evaluate Digital Access implications: Both editions handle Digital Access differently — understand the impact on your indirect usage

Checklist: 5 Actions to Take

1. Audit your current customisation landscape — quantify ABAP/Z-code dependencies
2. Build parallel 5-year TCO models for private and public editions
3. Assess your organisation's change management capacity (quarterly vs. annual updates)
4. Review compliance and data residency requirements against both deployment models
5. Engage an independent RISE advisor to benchmark pricing and negotiate optimal terms