What you are buying, what you are giving up, and what to ask before the shape is set. Three knowledge checks along the way, and 4 clips from a senior licensing analyst.
This is a taught session, not a talking head. The instructor works through analyst grade slides, and three times the video stops on a question with four options on screen. Pause, commit to an answer, and the next slide explains which option is right and why each of the others is wrong. 4 times in the session the frame splits and a senior licensing analyst gives the view from inside real SAP negotiations, and the instructor picks the clip apart when the slides return.
The full narration of this session, section by section, for reading and reference. Guest analyst clips are marked.
Welcome back. Session twenty one, and this opens module five. Module four gave you the routes out of ECC and how to price them. RISE with SAP is one of those routes and it is different in kind from the others, because it does not only change what you run, it changes what you own. So this session is deliberately not about whether RISE is good or bad. It is about what is actually inside the bundle, what is not inside it despite appearances, what you hand over to get it, and the questions that are easy to ask before the shape of the deal is agreed and nearly impossible afterwards. Three knowledge checks. Let's begin.
Five things by the end. First, list what is inside: the components bundled into a RISE subscription, and which of them carry real value against which are token entitlements. Second, list what is not, because the things people assume are included and are not is the most expensive assumption in this module. Third, name what you give up: control, ownership and optionality, all three of which are real, all three of which are sometimes worth trading, and none of which should go unnoticed. Fourth, read the commercial shape: subscription rather than perpetual, priced in FUE, with a term and a renewal, which changes your leverage permanently. And fifth, ask the right questions early, meaning eight questions that are straightforward before the shape is set and very hard afterwards.
Four things to frame it. A bundle: software, infrastructure and managed services in a single subscription with a single vendor accountable for all of it. Subscription: you stop owning perpetual licences and start renting, and that is the largest single change and it is permanent. FUE priced: the same weighted metric from session seventeen applied to a subscription, so your classification work carries straight over and is worth just as much. And less control: infrastructure, operations and some release timing move to SAP, which is simplification for you and dependency at the same time. Here is my honest framing. RISE is a genuinely reasonable answer for many organisations, and I am not going to argue against it. It is also the single most consequential commercial decision in this course, because it is the one that changes what you hold rather than only what you pay. Let's play a clip on that distinction.
Guest analyst clip.
What you hold rather than what you pay. Keep that distinction, because it is the one that makes this decision different from every other one in the course. Every other choice we have discussed changes a price or a metric. This one changes the nature of the thing you have. That is not an argument against it. It is an argument for treating it with a different level of scrutiny than a product purchase, and specifically for reading the contract rather than the brochure. So let's start with what is actually in the bundle.
Four groups inside the subscription. The application: S four HANA Cloud, private or public edition, licensed in FUE, and this is the substance of the deal and most of the money. Infrastructure and operations: hyperscaler capacity plus the technical managed service, meaning hosting, patching, upgrades and monitoring, at a base or a premium tier. Platform credits: a BTP allowance, commonly a small percentage of contract value, which is useful and rarely enough for a real integration programme. And the tooling: Signavio process entitlements, a Business Network starter pack, readiness and learning tools, which are real products with limited entitlements. The pattern to notice is this. The application and the infrastructure are the deal, and everything else is worth having and should not be paid for twice. Check what you already own before it gets bundled back to you, because that happens more often than you would expect.
Now the more useful list: what people assume is included and is not. The migration: implementation is a separate engagement and a separate cost, and it is often the largest line in the whole programme. Application management: the managed service is technical rather than functional, so your team or a partner still runs the application layer. All the BTP you need: the included credit is an allowance rather than a budget, and integration and extension consumption is billed on top. Indirect access: Digital Access is priced separately as always, so everything in module three applies unchanged inside a RISE agreement. And every SaaS product: SuccessFactors, Ariba and Concur are their own contracts, so the single contract covers rather less of your estate than the phrase suggests. None of this is concealed, by the way. It is simply that the phrase single contract does a great deal of work in a presentation, and the actual scope is narrower than the impression it leaves.
First knowledge check. Your RISE proposal includes technical managed services. Who runs your custom ABAP extensions? A, SAP, since managed services covers the system end to end. B, you or a partner, since the managed service is technical and not functional. C, SAP, but only at the premium service tier. D, nobody, since extensions have to be retired before moving to RISE. Pause here and pick one.
The answer is B. The RISE managed service runs the platform: infrastructure, database, patching, upgrades and availability. Everything above that line, meaning your configuration, your extensions and your functional support, stays with you or with a partner. A is the assumption most organisations arrive with, and discovering it late means an unbudgeted application management contract negotiated at short notice, which is the worst way to buy anything. C invents a tier boundary that does not exist for functional work, since the premium tier buys you more of the same kind of service rather than a different kind. And D is simply false: private edition exists precisely so that your extensions can come with you, and for many customers that is the reason to choose it.
So, five things you give up. Ownership: perpetual entitlement becomes subscription, so you stop holding an asset and start holding a contract with an end date. Infrastructure control: sizing, hosting and the hyperscaler relationship move across, which is simpler for you and one fewer place you can optimise independently. Some release timing: upgrade windows are governed by the service description rather than by you, and that matters if your close calendar is unusual. The exit: leaving means a migration, and the practical cost of leaving is the strongest single determinant of your renewal price. And direct comparability: a bundled price is much harder to benchmark line by line, which is convenient for the seller and a genuine problem for you. The first of those is the one that changes everything downstream. Let's hear why.
Guest analyst clip.
The floor under every negotiation. That is the clearest way I know to describe what perpetual ownership actually buys you, and notice that it is worth something even if you would never use it. You are not going to stop paying support and run unsupported software. But the fact that you could is what makes the conversation a negotiation rather than a renewal notice. When that option goes, the terms that replace it have to be written into the contract, which is exactly why renewal and exit are the two things to settle first.
Second knowledge check. Which change has the largest long term effect on your negotiating position? A, infrastructure moving to SAP and a hyperscaler. B, perpetual entitlement becoming a subscription with a term. C, upgrade timing governed by a service description. D, the bundle being harder to benchmark component by component. Pause here before you continue.
The answer is B. A perpetual licence means the software keeps running if you stop paying support, which is an uncomfortable position and a real one, and it sits quietly behind every negotiation you have ever had with this vendor. A subscription that expires removes that floor, because at renewal the alternative to agreeing is not running at all. A, C and D are all genuine effects and all of them are operational. B is structural, it is permanent, and it is the reason renewal terms deserve considerably more attention than the initial price does.
So how does the commercial model work? Four features. Priced in FUE: the same weighted metric from session seventeen, so your classification and cleanup work carries over completely and is worth as much here as it was there. A committed term: typically multi year with a committed volume, and growth above the commitment is priced separately, which is the same pattern as every other consumption model in this course. Conversion credit applies: existing perpetual entitlement can offset the subscription, so session nineteen's credit base is an input here too, including the shelfware. And renewal is the real deal: the first term is competitive because you have alternatives, and the second is priced against your cost of leaving. Everything session twelve said about buying a run rate rather than a snapshot applies here. Size the commitment to the end of the term, and settle the renewal mechanics in the first contract rather than in the last quarter of it. Let's hear that argued properly.
Guest analyst clip.
The second term is where the money is. And the practical consequence is a drafting instruction rather than a negotiating tactic: you want a mechanism, in writing, that determines the renewal price without a fresh negotiation. A cap tied to an index. A defined uplift ceiling. Something that makes the second term arithmetic rather than a conversation. Whether you get it depends on your leverage, and you will never have more leverage than you do before you have moved anything.
So, the questions, and I have put the area against each because they belong to different people. Scope: what exactly does the managed service cover, in a RACI, because everything outside it needs a partner and a budget. Service levels: what are the SLAs and what happens when they are missed, because a service credit is not a remedy if the business is down. Renewal: how is the renewal price determined and is it capped, which is the term with the most money in it. Exit: what does leaving involve in terms of data, timing, assistance and cost, because your exit cost sets your renewal price. Growth: what does volume above the commitment cost, because business growth becomes a purchase you did not plan. And indirect: how is Digital Access measured and priced inside this, because module three's definitions need to survive the move. Notice that six of those are contract questions rather than product questions. That is session nineteen's pattern repeating: the product decision is made once, and the contract governs the next decade.
Five traps. Assuming the managed service is functional: discovering after signature that application management is yours, and buying it separately at short notice from a position of no leverage. Paying twice for what you own: components bundled back to you that you already hold, without the existing entitlement being credited against them. Sizing to today: committing to today's FUE and buying growth at a worse rate later, which is the same error now appearing in its fourth different metric in this course. Leaving renewal undefined: signing a strong first term with no mechanism for the second, which is the term with the most money in it. And no exit plan on day one: not costing the exit while you still have leverage, so the renewal is negotiated against an unknown and probably large number.
Last knowledge check. When is the right moment to negotiate renewal and exit terms? A, at the first renewal, when you have usage data to argue with. B, in the initial contract, before you have moved anything. C, once the migration is complete and the service is stable. D, they are standard terms and are not negotiable. Pause here, and think about when your leverage is highest.
B. Your leverage is at its maximum on the day before you commit, because that is the only moment when not proceeding is genuinely available to you. A negotiates renewal at the point of least leverage, which is precisely the problem the question is pointing at. C is after the migration has been paid for and the switching cost has become real, so it is only marginally better than A. And D is simply untrue: renewal caps and exit assistance clauses are negotiated regularly, and in my experience they are asked for far less often than they are granted. Let's close on what to actually ask for.
Guest analyst clip.
Ask for the mechanism, not the promise. So, five things to run a RISE relationship once you are in one. Track FUE consumption quarterly against the commitment, with the headroom stated, because the band rebalance from session seventeen is worth exactly as much inside a subscription as outside one. Watch the BTP line, because the included allowance is finite and consumption grows quietly, which is session nine's engine drift wearing a new costume. Hold the RACI: one document showing who does what, reviewed whenever either side changes anything, because ambiguity always resolves against you during an incident. Keep the exit costed and refresh it annually, because it is the number that determines your renewal whether or not you ever use it. And diarise the renewal early, eighteen months out per session sixteen, because a renewal negotiated in the last quarter is not a negotiation, it is an acceptance.
Three sentences. RISE bundles the application, the infrastructure and a technical managed service into one subscription, and the components around those are real products with limited entitlements. The managed service is technical rather than functional, implementation is separate, and Digital Access and the other SaaS products remain their own arrangements, so the single contract covers rather less than it sounds. And the structural change is ownership: perpetual entitlement becomes a subscription with a term, which removes the floor under every future negotiation, and that is what makes renewal and exit the terms to settle first. Next session goes into the sizing: how the FUE model works inside a RISE subscription, how the commitment is set, and what happens when you need more than you committed to.
Homework before session twenty two, about an hour. One, read an order form rather than a brochure. If you have a RISE proposal, read the order form and the service description. If you do not have one, read the published service description anyway, because it is the document that defines what you would actually receive. Two, write your RACI question: list the ten things your team does today to keep SAP running, and ask which of them the managed service covers. Three, check what you already own, meaning Signavio, Business Network and BTP, because anything you hold that is about to be bundled back to you should be credited rather than re-sold. Four, cost the exit roughly: if you had to leave in year five, what would it take? A rough figure now is worth more than a precise one later. And five, draft the renewal ask: one paragraph on how renewal pricing should be determined and capped, because that paragraph belongs in the first contract.
Five guides, all on redresscompliance dot com. The RISE with SAP pillar guide covers the whole programme in one place, component by component, which is slides four and five expanded. RISE hidden costs takes slide five much further, setting out what sits outside the bundle and what each item costs in practice. RISE versus S four HANA on premise is the comparison module four's business case needs, so it is the bridge between the two modules. RISE negotiation tactics covers the terms worth pushing on, including the renewal and exit clauses from slide twelve. And the RISE pricing benchmarks give you a sense of where pricing sits, which is useful for sizing a budget before any quote arrives.
That is session twenty one. The thing to take away is that this is a contract decision wearing product clothing, so read the order form. Next time, the sizing and the commitment. See you then.