The Strategic Decision: Why This Is Not Simply a Hosting Choice
The choice between SAP's managed private cloud (RISE with SAP or SAP HEC) and a self-managed deployment on a public hyperscaler (AWS, Azure, or GCP) is not a hosting decision — it is a business model decision that determines your licensing structure, cost trajectory, operational control, exit options, and long-term negotiation leverage with SAP for the next 5–10 years.
Under RISE, SAP bundles software licensing, infrastructure, and managed services into a single subscription. You rent the entire stack. Under a DIY hyperscaler model, you own your SAP licences (BYOL — bring your own licence), pay the hyperscaler directly for infrastructure, and manage operations yourself or through a partner. These are fundamentally different commercial relationships with materially different financial and strategic implications.
"The RISE vs DIY decision is not about where your SAP systems run — it is about who controls your licensing, your costs, and your exit options for the next decade. Choose based on leverage, not convenience."
This guide provides the independent analysis CIOs and procurement leaders need to make this decision on the merits — covering the licensing impact, cost model comparison, flexibility trade-offs, SLA considerations, migration dynamics, and the specific scenarios where each model wins. We conclude with the negotiation tactics that apply regardless of which path you choose.
Licensing Models: Subscription vs BYOL — What You Actually Own
The licensing difference between RISE and DIY is the single most important factor in this decision — and the one most frequently underestimated by organisations evaluating the two approaches.
| Dimension | RISE with SAP (Subscription) | DIY on Hyperscaler (BYOL) |
|---|---|---|
| Software rights | Subscription — you rent the software for the contract term | Perpetual — you own the software indefinitely |
| What happens at contract end | Usage rights terminate; no software asset remains | Licences remain your property; can continue on any platform |
| Existing licence investment | Suspended or converted; value is absorbed into subscription | Fully retained; continues to deliver value |
| Renewal leverage | Limited — you cannot easily leave without losing all software access | Strong — you own the licences and can switch infrastructure |
| Audit exposure | SAP manages compliance within the managed environment | You manage compliance, but retain control over measurement |
| Net asset position | Depreciating — every year is pure expense with no residual value | Stable — perpetual licences are a balance sheet asset |
The RISE Lock-In Mechanism
When you enter RISE, your existing perpetual licences are typically suspended or converted. This means you cannot simultaneously run RISE and maintain BYOL rights on the same software. If you leave RISE at contract end, you may need to repurchase licences or negotiate reinstatement — and SAP has no obligation to offer favourable terms at that point. This is the single largest hidden cost of RISE: the destruction of your licence asset as a negotiation lever.
The BYOL Freedom
Under BYOL, your perpetual licences give you platform mobility. You can move from AWS to Azure, from Azure to on-premises, or from one managed service provider to another — without losing your software rights. Your SAP relationship is decoupled from your infrastructure relationship. This separation of concerns is the most powerful form of vendor leverage: SAP cannot hold your software hostage because you already own it.
5-Year TCO Comparison: The Numbers Behind the Decision
A meaningful comparison requires a minimum 5-year TCO analysis that captures all cost components — not just the headline subscription fee or infrastructure bill. RISE's bundled simplicity makes it appear cost-competitive in Year 1, but the cumulative effect of subscription fees versus an optimised BYOL approach diverges significantly over time.
| Cost Component | RISE with SAP (5 yr) | DIY on Hyperscaler (5 yr) |
|---|---|---|
| SAP software | Included in subscription (~40–50 % of total RISE fee) | Existing perpetual licences + annual maintenance (~22 % of licence value/yr) |
| Infrastructure | Included in subscription (~30–40 % of total RISE fee) | Hyperscaler IaaS — optimisable via reserved instances, spot pricing, autoscaling |
| Managed services / Basis | Included in subscription (~15–20 % of total RISE fee) | Internal team, MSP partner, or combination — competitively sourced |
| Migration | Often partially included or incentivised | Customer-funded; hyperscaler credits may offset 30–60 % |
| Year 1 cost | Often lower (SAP incentivises entry) | May be higher (migration + infrastructure setup) |
| 5-year cumulative TCO | $8–12 M (example: 3,000 users, mid-complexity) | $5.5–8.5 M (same scope, optimised) |
| Residual asset at Year 5 | $0 — subscription rights terminate | Perpetual licences valued at $2–4 M remain on balance sheet |
The DIY cost advantage comes from three levers that RISE customers cannot access: hyperscaler volume discounts (enterprise agreements with AWS/Azure often deliver 30–50 % below on-demand pricing), right-sizing and autoscaling (shutting down non-production systems off-hours, scaling seasonally), and competitive sourcing of managed services (choosing the most cost-effective Basis provider rather than accepting SAP's bundled rates). Over 5 years, these levers compound to create the 20–40 % TCO gap that favours DIY for organisations with the capability to execute.
Flexibility and Control: What You Gain and Lose in Each Model
SAP-Controlled Environment
SAP manages infrastructure, patches, upgrades, and monitoring. You receive a standardised, vendor-managed experience — but with constraints on customisation and choice. You cannot freely change the underlying cloud platform. System sizing changes require SAP approval. Custom configurations may be restricted or subject to additional fees. Upgrade schedules follow SAP's timeline, not yours. The trade-off: operational simplicity in exchange for reduced autonomy.
Customer-Controlled Environment
You choose the cloud provider, configure the environment, set security policies, control upgrade timing, and scale resources without vendor approval. You can implement custom integrations, specialised compliance configurations, and multi-cloud architectures. If your needs change, you can move workloads between hyperscalers or back to on-premises. The trade-off: maximum flexibility and control in exchange for operational responsibility.
| Control Dimension | RISE | DIY |
|---|---|---|
| Cloud provider choice | SAP dictates; typically limited to SAP's contracted hyperscaler | Full choice — AWS, Azure, GCP, or multi-cloud |
| Infrastructure sizing | Pre-allocated by SAP; changes require approval | Customer-controlled; right-size and autoscale at will |
| Upgrade timing | SAP's schedule — mandatory upgrade windows | Customer decides when and how to upgrade |
| Custom configurations | Limited; must comply with SAP's managed standards | Unrestricted; full access to OS and infrastructure layers |
| Multi-cloud / hybrid | Not supported; RISE is a single-stack environment | Fully supported; integrate with any cloud or on-prem system |
| Exit mobility | Locked to RISE for contract term; exit requires relicensing | Move to any platform at any time with owned licences |
SLA and Support: Single Vendor vs Multi-Vendor Accountability
RISE: One Throat to Choke
With RISE, SAP is the single accountable provider for the entire stack — software, infrastructure, and managed services. Any issue routes through one support channel with no cross-vendor finger-pointing. However, the SLA is on SAP's standard terms with limited negotiability. Remedies for downtime are typically restricted to service credits. You cannot independently engineer higher availability by choosing a different infrastructure approach — SAP controls the architecture.
DIY: Customisable but Complex
In a DIY model, you manage multiple support relationships: the hyperscaler for infrastructure, SAP for application support, and potentially an MSP for Basis services. When issues arise, you may need to coordinate between parties. However, you can independently engineer higher SLAs — designing redundant architectures, choosing enhanced support tiers from the hyperscaler, and implementing monitoring that exceeds SAP's standard offering. DIY can deliver stronger uptime, but it requires operational maturity.
Migration Dynamics: Incentives, Complexity, and Hidden Commitments
Both paths involve a significant migration effort, but the commercial dynamics differ substantially. SAP uses migration as a sales lever for RISE — offering incentives that reduce the upfront cost of moving to managed private cloud. DIY migrations receive no SAP incentives but can access hyperscaler migration credits and maintain full control over the process.
| Migration Factor | RISE | DIY |
|---|---|---|
| SAP migration incentives | Often substantial: maintenance credits, licence conversion discounts, bundled migration services | None from SAP; hyperscaler may offer $50–200 K in migration credits |
| Migration expertise | SAP-led or SAP-partner-led; turnkey for organisations with limited internal capability | Customer-led with chosen partners; requires strong project management |
| Timeline control | SAP-driven timeline; may be faster but less flexible | Customer-controlled; phased migration possible (pilot → production) |
| Hidden commitments | Migration incentives typically require multi-year RISE commitment (5+ years) with limited exit options | No long-term lock-in; infrastructure commitment can be as short as 1 year |
| True cost of "free" migration | Embedded in subscription premium over contract term; total cost often exceeds a standalone migration | Transparent; migration cost is a one-time project expense |
"SAP's migration incentives are not gifts — they are loans, repaid through subscription premiums over the contract term. A 'free' migration that commits you to a 5-year RISE contract at above-market rates is more expensive than funding the migration yourself and maintaining BYOL flexibility."
When RISE Is the Right Choice
Despite the cost and flexibility advantages of DIY, there are legitimate scenarios where RISE with SAP is the better strategic choice. The key is ensuring you choose RISE for the right reasons — not because SAP's sales team made it seem like the only option.
✅ RISE Wins When:
- Limited internal capability: Your organisation lacks a strong SAP Basis team and cloud engineering expertise, and building that capability is not a strategic priority. RISE provides a fully managed solution without requiring internal technical investment.
- Speed to S/4HANA is critical: You face a tight timeline to decommission legacy ECC and need SAP's direct involvement to accelerate the migration. RISE can reduce migration timelines by 3–6 months through SAP-led project execution.
- Single-vendor simplicity is valued: Your organisation's governance model favours single-vendor accountability over multi-vendor optimisation. One contract, one SLA, one support channel — this simplicity has genuine operational value for some organisations.
- SAP incentives are genuinely compelling: SAP is offering incentives (subscription discounts, BTP credits, migration credits) that materially close the cost gap with DIY. If the RISE 5-year TCO comes within 10 % of an optimised DIY model after accounting for all incentives, the operational simplicity may justify the premium.
- Your licence estate is small or obsolete: If your existing SAP licence investment is relatively small (under $1 M) or covers products you plan to retire entirely, the cost of surrendering those licences is lower — reducing the primary financial argument against RISE.
When DIY Hyperscaler Hosting Wins
For organisations with the capability to execute, self-managed SAP on a hyperscaler delivers superior economics, greater flexibility, and stronger long-term negotiation positioning. The DIY advantage is most pronounced in the following scenarios.
✅ DIY Wins When:
- Significant existing licence investment: You have $2 M+ in perpetual SAP licences that would be suspended or converted under RISE. Retaining these licences preserves both a balance sheet asset and your most powerful negotiation lever with SAP.
- Strong internal or partner capability: You have a capable Basis team, cloud engineering expertise, or a trusted MSP partner with deep SAP and hyperscaler experience. The operational overhead of DIY is manageable and the cost savings are substantial.
- Existing hyperscaler commitments: You already have enterprise agreements with AWS, Azure, or GCP that include volume discounts of 30–50 %. Adding SAP workloads under these agreements is significantly cheaper than RISE's bundled infrastructure rates.
- Infrastructure control is required: Your business requires custom compliance environments (regulated industries), multi-cloud architectures, or tight integration with non-SAP workloads running on the same hyperscaler — configurations that RISE cannot accommodate.
- Vendor lock-in is unacceptable: Your procurement strategy prioritises optionality and competitive leverage. BYOL ensures you can switch infrastructure providers, negotiate from strength at renewal, or even transition away from SAP entirely if alternatives become compelling.
Exit Clause Analysis: What Happens When the Contract Ends
The exit scenario is where the RISE vs DIY decision has its most consequential long-term impact — and where most organisations fail to conduct adequate due diligence before signing.
RISE Exit Reality
When a RISE contract ends, your usage rights terminate. You do not retain any software. To continue running SAP, you must either renew RISE (at whatever terms SAP offers — with minimal leverage) or repurchase perpetual licences (at current list prices, which are typically 30–50 % higher than what you originally paid). SAP has no obligation to offer a competitive renewal or licence reinstatement deal. Your negotiation leverage at exit is at its absolute minimum.
DIY Exit Reality
When a hyperscaler contract ends (or you choose not to renew), you retain your SAP licences and can move them to any platform — another hyperscaler, an on-premises data centre, or a different hosting provider. Your SAP relationship continues independently of your infrastructure decision. Your negotiation leverage with both SAP (for maintenance and support) and the hyperscaler (for infrastructure) remains intact because neither vendor holds your software hostage.
Retail Company: RISE Exit Analysis Reveals $2.4 M Renewal Trap
Situation: A 5,000-user retail company was evaluating RISE with an attractive Year 1 subscription rate of $1.6 M/year (a 25 % discount off SAP's standard pricing). The 5-year contract total was $8.0 M. Before signing, they conducted an exit analysis to understand their position at contract end.
What the analysis revealed: At the end of the 5-year RISE term, the company would have no perpetual licence rights. Repurchasing equivalent licences would cost approximately $3.8 M at current list prices. Alternatively, renewing RISE without the introductory discount would cost approximately $2.1 M/year ($10.5 M over the next 5 years). The DIY alternative — retaining existing licences ($1.8 M in perpetual assets) plus optimised Azure hosting — projected a 5-year TCO of $6.2 M with full licence retention at the end.
RISE vs DIY: Complete Decision Matrix
| Decision Factor | RISE with SAP | DIY on Hyperscaler |
|---|---|---|
| Licensing model | Subscription — rent software | BYOL — own software perpetually |
| 5-year TCO (3,000 users) | $8–12 M | $5.5–8.5 M |
| Infrastructure control | SAP-managed; limited customisation | Full control; any configuration |
| Cloud provider choice | SAP-dictated | Customer choice — AWS, Azure, GCP |
| Operational complexity | Low — SAP manages everything | Higher — requires internal/partner capability |
| Migration support | SAP-led with incentives | Customer-funded; hyperscaler credits available |
| SLA customisation | SAP standard terms; limited negotiability | Fully customisable per layer |
| Exit options | Weak — relicensing or unfavourable renewal | Strong — licences follow you anywhere |
| Long-term vendor leverage | Minimal at renewal | Maximum — own the software, choose the platform |
Negotiation Tactics: Regardless of Which Path You Choose
Always Build a DIY Benchmark
Even if you are leaning toward RISE, obtain a detailed DIY cost estimate from a hyperscaler and an MSP partner. This benchmark is your most powerful negotiation lever — it proves to SAP that you have a viable alternative and forces them to compete on price. Without a credible DIY benchmark, SAP has no incentive to discount RISE below their standard rates.
Negotiate the Renewal Rate, Not Just Year 1
RISE contracts often feature aggressive Year 1 pricing that reverts to standard rates at renewal. Insist on a renewal price cap (3–5 % maximum annual increase) written into the initial contract. If SAP will not commit to a renewal cap, factor the uncapped renewal rate into your 10-year TCO analysis — the true cost of RISE is what you pay at renewal when your leverage is lowest.
Protect Perpetual Licence Rights
If you choose RISE, negotiate explicit licence reinstatement rights at contract end — meaning your suspended perpetual licences are restored if you leave RISE. Without this clause, exiting RISE requires repurchasing licences at current list prices. Licence reinstatement is the single most important contractual protection for RISE customers.
Leverage Hyperscaler Incentives in SAP Negotiations
AWS, Azure, and GCP actively compete for SAP workloads and will offer migration credits, committed-use discounts, and dedicated SAP support. Bring these concrete numbers to your SAP negotiations — whether you are negotiating RISE (to benchmark SAP's infrastructure costs) or a BYOL deal (to maximise your infrastructure savings). Hyperscaler incentives of $100–500 K are common for enterprise SAP migrations.
Pilot Before Committing
If you are undecided, run a small SAP workload (dev/test or a non-critical application) on a hyperscaler using your existing BYOL licences. This pilot reveals real infrastructure costs, operational complexity, and performance characteristics — giving you data-driven confidence (and credibility in negotiations) rather than relying on vendor projections. A 3-month pilot typically costs $15–30 K and can save millions in avoided misallocation.
Manufacturing Enterprise: DIY Benchmark Saves $1.3 M on RISE Negotiation
Situation: An 8,000-user manufacturing enterprise decided that RISE was the right strategic choice due to limited internal SAP Basis capability. However, before accepting SAP's initial proposal, they commissioned an independent DIY benchmark: a fully costed 5-year model for running the same SAP landscape on Azure with a managed service partner.
What happened: The DIY benchmark showed a 5-year TCO of $9.2 M vs SAP's initial RISE proposal of $12.8 M. Armed with this data, the company returned to SAP and demonstrated that the RISE premium was unjustifiable at current pricing. After three rounds of negotiation, SAP reduced the RISE proposal to $11.5 M — including a 4 % renewal price cap, licence reinstatement rights, and $200 K in BTP credits.