SAP RISE: Licensing, Components, and Cloud Deployment Options

SAP RISE: Licensing, Components, and Cloud Deployment Options

RISE with SAP is an all-in-one subscription offering that bundles SAP’s flagship S/4HANA Cloud ERP, cloud infrastructure, and essential tools into a single contract.

It is designed to simplify the journey to cloud ERP for enterprises by combining software licenses, technical services, and support into a single package.

CIOs and CTOs should understand RISE’s components, including S/4HANA Cloud (public or private edition), SAP Business Technology Platform (BTP) credits, and process transformation tools.

How its licensing model works, to weigh the benefits of a streamlined solution against potential trade-offs, such as cost and vendor lock-in.

Read Cost Comparison: RISE vs Own Infrastructure.

What is RISE with SAP?

RISE with SAP (often called “RISE”) is SAP’s subscription-based offering introduced in 2021 to accelerate customers’ move to cloud-based ERP.

Instead of the traditional approach of buying perpetual software licenses and arranging separate hosting and support.

RISE provides “Business Transformation as a Service” – essentially a single contract that bundles the core ERP software, cloud infrastructure, and ongoing technical services into one monthly or annual fee.

SAP aims to eliminate the complexity of managing multiple vendors and contracts. Under RISE, SAP assumes more responsibility for operating the system (in partnership with hyperscalers for infrastructure) while the customer focuses on utilizing the software.

This offering is SAP’s strategic pivot to the cloud, timed with the end of SAP ECC support by 2027–2030 and growing pressure on customers to move to SAP S/4HANA.

SAP often touts that RISE can reduce total cost of ownership (TCO) by up to 20% compared to on-premises S/4HANA by including cloud efficiencies and migration support.

Whether your organization realizes these savings will depend on a careful evaluation of the contract details and how well the RISE package aligns with your specific needs.

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

S/4HANA Cloud at the Core of RISE

At the heart of RISE is SAP S/4HANA Cloud, the modern cloud-based ERP system.

RISE gives you a choice of two S/4HANA Cloud deployment options:

• Public Cloud (S/4HANA Cloud, Multi-Tenant) – A standardized SaaS offering where your ERP runs in a public cloud environment shared with other customers. This is a “ready-to-run” solution with predefined best-practice processes. It offers rapid deployment and lower costs, but with limited customization options. In early 2023, SAP introduced “GROW with SAP” for midmarket customers, which essentially packages S/4HANA Public Cloud (often referred to as SAP S/4HANA Cloud, Public Edition) for smaller enterprises.
• Private Cloud (S/4HANA Cloud, Single-Tenant) – A dedicated instance of S/4HANA just for your company, hosted either in SAP’s data center or on a hyperscaler (AWS, Azure, GCP) but managed by SAP. The RISE Private Edition enables full SAP customization and the conversion of an existing SAP ECC system. It’s functionally equivalent to on-prem S/4HANA and is the most popular RISE option for medium and large enterprises. The trade-off is that it is more complex than public cloud and typically comes at a higher price for greater flexibility.

In both cases, the RISE subscription includes infrastructure (cloud hosting costs) and basic technical managed services for the S/4HANA system. SAP (and its partners) handle tasks such as system provisioning, patching, and upgrades within the scope of the subscription.

This relieves your IT team from low-level infrastructure work, although you may still need their involvement for application-level configuration and support.

Essentially, RISE shifts many responsibilities to SAP, turning your ERP into a service rather than a collection of software assets you manage entirely in-house.

SAP BTP and the “Clean Core” Approach

A key component included with RISE is the SAP Business Technology Platform (BTP) – SAP’s cloud platform for building extensions, integrations, and new applications.

In a RISE contract, SAP provides BTP consumption credits (via a Cloud Platform Enterprise Agreement) that allow you to use various BTP services (like integration tools, Fiori UX development, analytics, etc.) up to a certain value.

This inclusion reflects SAP’s “clean core” strategy: instead of heavily customizing the S/4HANA core (which complicates upgrades), you are encouraged to build enhancements on BTP as side-by-side extensions.

BTP serves as an innovation hub for automating processes, creating applications, and integrating SAP with other systems – all without modifying core ERP code.

By bundling BTP credits, RISE ensures you have the platform to pursue digital innovation and cloud development. However, it’s up to the enterprise to leverage those credits.

CIOs should plan how to utilize BTP (for example, developing workflows or analytical dashboards) so that this portion of RISE delivers value.

Unused BTP credits have been a common issue; they are part of what you pay for, so they should enable the “intelligent enterprise” vision SAP markets with RISE.

Business Network and Transformation Tools Included

Beyond the core software, RISE with SAP packages several additional tools and services to support your transformation:

• SAP Business Network Starter Pack: RISE provides access to SAP’s Business Network, which includes networks such as Ariba (procurement), Logistics Business Network, and Asset Intelligence Network, through a starter package. This typically provides a limited volume of transactions or connections on these networks to kick-start your collaboration with suppliers and partners via the cloud. For example, you might get a set number of Ariba procurement documents or supplier connections included. It’s a taste of SAP’s broader business-to-business cloud services, bundled at no extra cost in RISE’s premium offerings.
• SAP Signavio Business Process Intelligence (BPI): To help customers analyze and improve their processes during the S/4HANA transition, RISE includes Signavio process transformation tools. This may include process mining, process modeling, and benchmarking tools to map out your current processes (often based on ECC) and redesign them for S/4HANA best practices. Essentially, SAP is providing customers with tools to ensure they not only migrate to S/4HANA but also optimize their business processes during the transition.
• Technical Tools and Services: RISE contracts include various embedded services to facilitate seamless migration and operation. Examples include the Custom Code Analyzer (to assess custom ABAP code for compatibility), Readiness Check reports (to gauge your ERP system’s readiness for S/4HANA), and access to SAP Learning Hub for training. Additionally, SAP Cloud ALM (Application Lifecycle Management) is provided for cloud-based monitoring and operations. These tools are bundled to reduce the friction of moving to the cloud and to continuously manage the system post-migration. While not as high-profile as the ERP or BTP, these included services can save significant effort during an implementation.

All these components are offered under one agreement. It’s important to verify exactly which extras are included in your specific RISE package level.

SAP offers tiers (Base, Premium, and Premium Plus packages), especially for the Private Cloud Edition, where higher tiers include more of these extras (for instance, the Premium tier includes BTP credits, Signavio, and the Business Network Starter, whereas the Base tier might not).

Understanding which components you need will help you choose the right edition and not overpay for unused functionality.

Subscription Licensing Model (FUEs vs. Traditional Users)

RISE with SAP dramatically changes the licensing model from the traditional on-premises approach.

Instead of purchasing perpetual Named User licenses (e.g., 500 Professional Users, 300 Limited Users, etc.) plus engine metrics, RISE uses a subscription metric called Full User Equivalents (FUEs).

This is essentially a standardized unit for measuring all types of user access in the cloud.

The FUE model works as follows:

• 1 FUE is defined as the value of 1 full “Advanced” user in S/4HANA Cloud. Under SAP’s ratio system, 1 Advanced User = 1 FUE. Other user types are counted as fractions of an FUE: specifically, 5 “Core” Users = 1 FUE, and 30 “Self-Service” Users = 1 FUE. In practical terms, if you have 30 casual users or five mid-level users, those count equally to one power user in terms of licensing cost. Developer users are typically heavier; for example, one developer might consume two FUEs (as they have deep system access).
• You purchase a certain number of FUEs in your RISE subscription contract, and you can allocate them across user types as needed. This gives some flexibility – you don’t have to decide upfront exactly how many of each role; you just need to have enough FUE “capacity” to cover your total usage. Companies can reallocate FUEs over time (e.g., repurpose some FUEs from unused self-service users for additional core users if needs change) without needing to negotiate a new license type count.

This authorization-based licensing means you are paying for the authorized potential usage rather than actual consumption.

All named users in your S/4HANA Cloud must be assigned one of these categories, and the total must stay within your purchased FUE quota.

If you exceed the contracted FUEs (for instance, by adding more users or switching many users to advanced roles), you will need to true up by purchasing additional licenses.

Unlike on-prem, you can’t technically “overuse” beyond the subscription limits – it’s more about sizing the contract right from the start and at renewals.

One advantage of the FUE model is its simplicity: it consolidates multiple user license types into a single metric. However, it can obscure the complexity of how those FUE ratios affect cost.

If most of your users are classified as Advanced, your required FUE count – and thus subscription cost – will be significantly higher than if the majority are Self-Service. Optimizing user licensing (for example, ensuring power users are truly needed and others are categorized appropriately) is crucial to avoid overpaying.

In one real-world case, a company analyzed 1,000 users. It optimized their roles, reducing the FUE count from nearly 487 to 260 – a significant cost-saving measure that did not compromise any user functionality.

The takeaway is that you should carefully map your user population to these FUE categories and seek optimization opportunities before signing a RISE deal.

Cost Structure and Pricing Considerations

RISE with SAP is an OpEx subscription – you pay a recurring fee (usually annually, over a 3-5 year contract) that covers the software, infrastructure, and support.

The cost is typically determined by the number of FUEs and the edition (public vs private, base vs premium, etc.) you choose.

Understanding SAP’s pricing structure is critical for negotiation, as the model includes tiered volume discounts and various factors:

• Tiered FUE Pricing: The price per FUE per month decreases as you buy more units. For example, in one pricing scenario, SAP’s list price in Europe was approximately €716 per FUE per month for a small quantity (under 135 FUEs). However, for larger purchases, the rate drops dramatically – e.g., around €64 per FUE for ~5,000 FUEs and as low as €47 per FUE for 6,000 FUEs or more. In practical terms, buying more users than you currently need can sometimes lower your overall cost by allowing you to access a better pricing tier. It sounds counterintuitive, but a scenario was reported where 5,000 FUEs cost €320,000 per month. In comparison, 6,001 FUEs cost approximately €282,000 per month, meaning the customer would save money by contracting 1,001 extra FUEs they didn’t initially need. As a CIO/CFO, you’ll want to leverage SAP’s pricing tiers to your advantage: ensure you understand breakpoints where increasing scope yields better unit pricing and aim to negotiate into a favorable band.
• Public vs. Private Edition Costs: Generally, Private Cloud Edition (your instance) costs more per user than Public Cloud Edition due to the dedicated resources and flexibility it provides. For instance, one benchmark showed that a mid-tier volume (~1,500 users) might be priced at around $178 per FUE per month for private use versus $147 per FUE per month for public use. The exact gap varies, but expect to pay a premium for the private cloud’s customization capability. You should weigh whether your business truly needs those customizations – some companies save by adopting the public cloud if their processes can be optimized to fit standard SAP best practices.
• Contract Inclusions and Extra Costs: The RISE fee includes standard SAP Enterprise Support (support services and cloud ALM) and typically all software licenses for the components in your bundle. However, not everything is unlimited – for example, BTP comes with a set amount of credits; if you consume more than that, you will incur an additional charge. Likewise, the Business Network starter plan may cover a limited number of transactions; exceeding this limit could incur additional fees. It’s important to forecast your usage of these ancillary components. Ensure the contract clearly states what levels of usage are included and the rates for any overages. Additionally, suppose you require higher service levels or specialized services beyond the standard RISE scope. In that case, these may incur additional costs or require separate agreements (e.g., enhanced application management services from a partner).
• Migration and Transition Costs: The RISE subscription itself doesn’t include the effort of implementation or data migration – these are typically handled via a system integrator or SAP services as a separate project (although SAP may bundle some tools and provide one-time migration support credits). Be aware of these one-time costs when budgeting the full move to S/4HANA. SAP may offer incentives or include certain migration services at a discount as part of a RISE deal (especially to encourage hesitant customers), so ask about any one-time credits for services such as data migration, change management, or training.

Below is a high-level comparison of the traditional licensing model versus RISE with SAP’s subscription model, highlighting cost structure and control differences:

Key Considerations: Benefits vs. Risks

RISE with SAP offers clear benefits for organizations seeking modernization, but it also introduces risks and trade-offs.

Here are the key points CIOs/CTOs should weigh:

Major Benefits:

• Single Throat to Choke: One contract and one responsible party (SAP) for software, hosting, and support. This can simplify vendor management and accountability. If issues arise, SAP cannot blame a third-party infrastructure provider since SAP owns the service end-to-end under RISE.
• Faster Time to Value: With pre-bundled services and SAP handling the technical setup, projects can potentially be deployed faster. The public cloud option, in particular, offers rapid deployment with predefined processes, suitable for businesses that want a quick cloud ERP solution without lengthy customization cycles.
• Regular Innovation: The subscription ensures you’re always on a supported, up-to-date version of S/4HANA. SAP pushes continuous improvements (especially in the public cloud, where quarterly updates bring new features). This means access to the latest innovations (e.g.,. AI enhancements and analytics updates) without large upgrade projects.
• Predictable Operating Expense: RISE shifts ERP costs to a predictable operating expense. This can be more cost-effective than a large capital expenditure. It includes infrastructure and basic operations, so costs such as data centers, hardware refreshes, and certain administrative tasks are built into the fee. SAP also often provides TCO calculators showing savings in hardware and labor over time.
• Cloud Scalability & Flexibility: In theory, RISE allows you to adjust your subscription as business needs change – e.g., adding users or expanding to new modules or regions by simply increasing subscription quantities. You don’t have to procure and install new hardware for growth; SAP provisions it behind the scenes. This elasticity can be valuable if you expect significant growth or usage fluctuations (note, however, that scaling down can usually only occur at contract renewal, not dynamically on a month-to-month basis).

Key Risks & Challenges:

• Higher Long-Term Cost? While SAP may offer initial discounts, the subscription model can become more expensive over a long horizon. You must continue to pay to use the software. Over 10 years, subscription fees can equal or exceed what an on-premises license and maintenance would have cost (especially if SAP raises prices). It’s crucial to model the cumulative cost over 5-10 years. Additionally, RISE contracts often include built-in annual price escalators (e.g., 3-5% per year); consider negotiating those down or capping them if possible.
• Vendor Lock-In: RISE consolidates everything under SAP. This convenience comes with strong lock-in – switching away (back to on-prem or another vendor) after a few years would be painful and costly, as you have no perpetual license to fall back on. Your business becomes dependent on SAP’s cloud services and timeline. Ensure you’re comfortable with SAP as a long-term partner and build exit clauses into the contract (for example, assistance with data extraction or conversion rights to on-premises licenses if the arrangement terminates).
• Less Control: By handing the keys to SAP, you surrender some control over scheduling and infrastructure. For instance, SAP will schedule your upgrades or system maintenance windows. In the public cloud, you have a minimal say in update timing and must adapt your processes to SAP’s standard. In a private cloud, you get more say, but you’re still constrained by SAP’s support policies and cloud operations framework. For highly regulated industries or very custom scenarios, this loss of control can be concerning.
• Complex Negotiation & Scope Clarity: The RISE bundle is broad, and it’s easy to assume “everything is taken care of.” In reality, clarity on what is included versus what is excluded is vital. Some services (such as extensive application support, data archiving, and disaster recovery beyond standard requirements) may not be fully covered. Any misunderstanding can lead to surprise costs. Negotiating a RISE deal requires scrutinizing the Bill of Materials (BOM) line by line. For example, ensure the contract specifies the system sizing (performance and capacity) that SAP will provide, the SLA (uptime commitments and support response times), and what happens if you need additional resources. Without due diligence, you risk signing a contract that doesn’t meet your requirements or has costly gaps.
• Post-Contract Transition: Plan for what happens at the end of the RISE term. If you intend to renew, anticipate that SAP will have leverage to increase pricing. If you may not renew, have a strategy (and contractual provisions) in place for transitioning off, whether by moving to another SAP hosting model or extracting data to a different system. The goal is to avoid being forced into renewal at any price because you have no alternate plan.

In summary, RISE with SAP can accelerate your cloud journey and simplify operations, but it is not a one-size-fits-all silver bullet.

It requires careful consideration of the above factors to determine if the value outweighs the costs and constraints for your organization.

Recommendations

• Assess Fit for Your Strategy: Don’t assume RISE is the only way to go cloud – evaluate if it aligns with your business and IT strategy. For some, traditional on-premises S/4HANA or third-party cloud hosting with perpetual licenses may offer greater flexibility or lower costs. Match RISE’s offerings to your requirements and identify any gaps.
• Get Clarity on Scope: Insist on a detailed RISE contract scope document. Identify which components (modules, user counts, BTP credits, network transactions, etc.) are included. Ensure system sizing (memory, CPUs, environments) is adequate. Everything, from disaster recovery setup to data residency, should be clearly outlined to avoid assumptions.
• Optimize and Right-Size Licensing: Before signing, perform an internal license audit or use tools to map your users to the FUE categories. Optimize the user distribution (e.g., minimize unnecessary “Advanced” users) to lower the required FUE count. Then, leverage SAP’s tiered pricing – negotiate for the best price per FUE. If you’re near a tier threshold, consider adjusting your volume to move to a lower-priced band (as long as the additional users won’t go unused).
• Negotiate Future Protections: Treat the initial contract as the best chance to secure favorable terms. Push for price protections (caps on annual increases), flexible renewal options, and remedies if SAP’s service levels or SLAs are not met. Ensure there are provisions for adding additional SAP cloud services at consistent discounts so you don’t pay the list price if you expand usage later.
• Plan for Implementation and Beyond: Line up the right implementation partner (systems integrator) and have a solid migration plan – RISE provides the tools and infrastructure. Still, a significant portion of the heavy lifting (data migration, process redesign) remains your project’s responsibility. Post-go-live, determine which tasks SAP handles versus those handled by your team or partner (e.g., user management, testing of upgrades, etc.). Have governance in place for the ongoing relationship with SAP, including regular service reviews.
• Consider a Pilot or Phased Approach: If you are uncertain, you could start with a smaller scope on RISE (for example, moving a particular region or subsidiary first or implementing a specific module in the cloud) before making a full enterprise-wide move. This can reduce risk – you learn how RISE works on a smaller scale and can adjust the contract for the larger rollout.
• Stay Informed on SAP’s Roadmap: SAP continuously evolves the RISE offering. Keep an eye on new inclusions (e.g., newer analytics, AI services, or industry cloud packages) that SAP might add to sweeten the deal. Similarly, track any changes in licensing policy or support (for instance, how long the private edition will allow certain customizations or changes in hyperscaler partnership terms). This information can be leveraged for both negotiation and long-term planning.
• Evaluate the Exit Plan: As part of your risk management, have a strategy if RISE doesn’t work out. This could involve negotiating in advance for the conversion of your subscription into on-premise licenses (allowing you to self-manage if needed), or at least ensuring data export rights and transition assistance. While you hope not to use it, having an exit plan will force SAP to also deliver on promises (knowing you have alternatives).

FAQ

Q1: Is RISE with SAP the only way to get S/4HANA in the cloud?
A: No – you can run SAP S/4HANA in the cloud without a RISE contract. For example, you could license S/4HANA traditionally and host it on a hyperscaler (SAP refers to this as “Bring Your License” on the cloud), or use the standalone S/4HANA Cloud offerings outside of RISE. RISE is a bundle that adds convenience and incentives, but it isn’t mandatory. Some customers opt for alternative paths if they require more flexibility in infrastructure or licensing. Consider your requirements: if you need maximum control or are already invested in licenses, a non-RISE deployment might be preferable. RISE is about packaging — the core software remains the same, regardless of whether it’s S/4HANA or not.

Q2: What exactly is included in the SAP Business Network Starter Pack?
A: The Business Network Starter Pack typically provides limited access to SAP’s cloud-based collaboration networks. In practical terms, this may involve a set number of documents or transactions on networks such as SAP Ariba (for supplier procurement), SAP Logistics Business Network (for supply chain tracking), or the Asset Intelligence Network (for sharing equipment information). The idea is to provide you with a “starter” usage of these networks to realize value (e.g., conducting sourcing events or exchanging orders with key suppliers online) without requiring a separate license initially. If you find value and your usage grows beyond the included quantities, you would then consider expanding those licenses. Always verify the exact quantities and which networks are included in your RISE agreement since SAP can adjust the offering over time.

Q3: How does SAP BTP credit usage work in RISE?
A: When you sign up for RISE, SAP will allocate a certain amount of BTP credit (monetary credits to consume platform services) as part of your subscription. For instance, you might get an annual credit value that can be spent on any BTP services (integration flows, extensions, analytics, etc.). As you use BTP services, the consumption is metered against those credits. If you stay within the included credit amount, you won’t be charged extra for BTP usage. If you exceed the included amount, you will incur additional charges as per SAP’s BTP rate card or need to top up your agreement. It’s important to monitor BTP consumption. Treat these credits as you would a cloud budget – track which projects or applications are using the platform. Also, if you foresee a significantly higher BTP usage (for example, you plan to build extensive applications), negotiate upfront for a larger BTP credit pool or better rates in the RISE contract to avoid surprise costs later.

Q4: What are my options at the end of a RISE contract term?
A: As you approach the end of your RISE subscription term (say, year 3 or 5 of the deal), you typically have a few options: renew the RISE contract (possibly renegotiating terms), migrate to a different SAP licensing model or exit. Renewing is straightforward, but be prepared for changes in pricing – SAP may propose an increase, which you should negotiate using any leverage (e.g., competitive alternatives or willingness to scale up if the price is right). If you choose not to renew RISE, you will be unable to continue using S/4HANA unless you make alternative arrangements. Alternate paths could be negotiating a conversion to on-premises licenses (SAP has offered some customers the ability to convert their subscription into a perpetual license for S/4HANA if they wanted to bring it back in-house – this would likely involve a significant payment or a pre-defined conversion ratio), or moving to a different cloud ERP vendor (which would be a major project, essentially replacing SAP). It’s critical to start planning at least 12-18 months before the contract end date: assess satisfaction with RISE, gather quotes for renewal versus other options, and ensure you don’t find yourself without leverage as the deadline approaches.

Q5: How do I ensure I’m not overpaying for RISE with SAP?
A: Due diligence and negotiation are your best tools. Start with a baseline of your current costs (licenses, maintenance, infrastructure, and manpower) for running SAP on-premises, and compare them to the RISE proposal over an equal period. Scrutinize the Bill of Materials for any components you don’t need – for example, if the RISE package includes a set of products or tools your company won’t use, ask if they can be removed for a lower price or swapped with something more useful. Utilize experts or advisors who know SAP’s pricing structure; they can identify if the FUE count is inflated or if the offered discount is in line with industry benchmarks. Always negotiate on multiple fronts: per-unit price, included quantities (such as users and BTP credits), contract terms, and future flexibility. Additionally, leverage competitive tension – even if you intend to go with SAP, obtaining quotes from other cloud providers or ERP vendors can strengthen your position. SAP’s sales team is very motivated to sign RISE deals; use that to your advantage to secure a better rate. Finally, continue to monitor usage once live – for instance, if your actual user count or BTP usage is lower than anticipated, you may consider reducing subscriptions at renewal. Treat RISE as a dynamic cost that you manage actively, not a set-and-forget purchase.

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