What Is SAP RISE?
RISE with SAP is delivered via a single subscription contract that bundles multiple components to support a company's transition to S/4HANA Cloud. It combines SAP S/4HANA Cloud (your core ERP in the public or private cloud), cloud infrastructure, managed services, and additional features like SAP Business Technology Platform (BTP) credits and a Business Network Starter Pack.
Instead of buying and running software licences yourself, you pay SAP a subscription fee to provide and operate the software on a hyperscaler of your choice — AWS, Azure, or Google Cloud. SAP takes responsibility for system availability, technical support, and updates under a single SLA, shifting SAP from a software vendor to a full-service provider.
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How RISE Differs from Traditional SAP Licensing
Traditionally, SAP sold perpetual licences (CapEx) with annual maintenance, and customers ran SAP on their own or hosted infrastructure. With RISE, licensing moves to a subscription (OpEx) model — you don't own the software outright; you pay to use it. SAP introduced the Full User Equivalent (FUE) metric for RISE, which combines user licence types into a single metric for flexibility — a shift from buying specific user types under on-premises models.
In a RISE deal, infrastructure and basic technical services are included in the price, unlike the separate hosting or data centre costs in traditional setups. RISE is cloud-only, so you must migrate to S/4HANA (public or private cloud edition). You are essentially outsourcing a significant portion of IT operations to SAP — which can accelerate adoption of new features but also means less direct control over your environment.
| Aspect | Traditional SAP | RISE with SAP |
|---|---|---|
| Licensing model | Perpetual licences (CapEx) + annual maintenance | Subscription (OpEx) — single annual fee |
| User metric | Named user types (Professional, Limited, etc.) | Full User Equivalents (FUE) |
| Infrastructure | Customer-managed (on-prem or hosted) | SAP-managed on hyperscaler (AWS/Azure/GCP) |
| Upgrades | Customer-controlled timeline | SAP-controlled release cycles |
| Support | Separate maintenance contract | Included in subscription |
| Customisation | Full control | Limited (especially Public Edition) |
| Licence ownership | Perpetual — you own the rights | Subscription — you rent the rights |
Key Choices When Considering RISE
Before entering negotiations, you need to make several strategic decisions that will shape your contract terms, costs, and long-term flexibility.
Deployment Option
Choose between Public Cloud (multi-tenant S/4HANA with standardised processes) and Private Cloud Edition (single-tenant S/4HANA allowing more customisation). This choice affects flexibility, cost, and the degree of process standardisation required. Public Cloud is cheaper but more rigid; Private Cloud costs more but accommodates existing customisations.
Hyperscaler Selection
You can choose the cloud provider — Azure, AWS, or GCP — for deployment. SAP manages that relationship, but your choice may depend on latency requirements, data residency obligations, or your existing cloud strategy and negotiated hyperscaler discounts.
Contract Length
RISE contracts are multi-year, typically 3 or 5 years. Longer terms may secure better pricing but reduce flexibility. Ensure you understand the renewal conditions, escalation clauses, and exit terms before committing to any duration.
Licence Conversion
Existing SAP customers must decide how to transition licences. You can convert perpetual licences into a RISE subscription — SAP may offer credits or incentives such as BTP consumption credits. Evaluate the trade-in value carefully and understand what you give up, particularly perpetual rights that have long-term value.
Included Services Scope
Clarify exactly what services are included. RISE bundles many services including basic support and monitoring, but implementation services are not included. Additional services — extra environments, enhanced support, disaster recovery — must be negotiated and added to the contract explicitly.
Download the CIO & Procurement Playbook: Transitioning to SAP RISE
Download Playbook →SAP RISE Negotiation Strategies
Entering a RISE contract involves negotiating software, cloud services, and support simultaneously. This is fundamentally different from traditional SAP negotiations where each component was handled separately. Here are the key areas to focus on, critical contract clauses to watch, and common pitfalls to avoid.
Key Factors to Negotiate
1. Pricing and Discounts
RISE pricing is quoted as an annual subscription based on the number of FUEs and chosen services. Push for transparency — ask SAP to break down cost components (licences vs. infrastructure) so you can benchmark each element independently. Negotiate the overall fee to a competitive level using any leverage you have: existing ECC maintenance spending, competitive alternatives, or multi-year commitment. Some analyses indicate RISE can lower TCO by up to 20% compared to on-premises, but only with a strong negotiated discount and full utilisation.
2. Renewal and Escalation
These are among the most critical terms in any RISE contract. Negotiate caps on renewal price increases — without a cap, SAP could raise fees significantly after your initial term when you are already dependent on them. Include a clause limiting annual price escalation (tied to inflation or a fixed percentage). Clarify the renewal process and ensure you have adequate notice and the right to negotiate before any price increase takes effect.
3. Usage Flexibility (Scaling)
Negotiate the ability to adjust your subscription as needs change. Secure predefined rates for adding users or systems, and discuss options for downsizing — SAP typically won't allow mid-term reductions, but you can negotiate flexibility at renewal or the ability to repurpose unused subscriptions. Ensure any expansion inherits the same discount percentage as the initial purchase.
4. Service Level Agreements (SLAs)
SAP's standard SLA for RISE (approximately 99.5% uptime) may not meet your business needs. Negotiate a higher SLA or specific performance metrics, and ensure meaningful remedies: if SAP fails to meet the SLA, what credits or termination rights do you have? Also clarify support response times for critical issues.
5. Exit and Termination Terms
Plan for a possible exit before you sign. Negotiate an exit clause that allows you to retrieve your data and transition off RISE at end of term. Since RISE often means giving up perpetual licences, ask what happens if you leave — can you revert to on-premises licensing? Negotiate a right to purchase a perpetual licence for S/4HANA at end of contract for continuity. The goal is to avoid being completely locked in with no exit strategy.
Critical Contract Clauses to Watch
| Clause | What to Watch For | Recommended Action |
|---|---|---|
| Bundling & scope | Gaps in what's included — DEV/QA systems, DR, interface maintenance may be excluded | Get a complete service description aligned with your expectations; eliminate ambiguities |
| Price escalation uplift | Automatic annual increases (e.g., 3% per year) built into the contract | Remove or minimise; aim for fixed pricing over the term or very low escalation |
| Renewal notice | Insufficient notice of renewal pricing, forcing last-minute decisions | Require written notice of renewal pricing at least 6 months in advance |
| Data & IP ownership | Ambiguity over who owns your data and custom developments on BTP | Ensure explicit ownership of data and custom code, with right to export in standard format |
| Expansion pricing | New users or capacity added at full list price, not your negotiated rate | Lock in that all expansions inherit the same discount percentage as initial purchase |
| Liabilities & indemnities | SAP's standard contracts limit their liability significantly | Discuss scenarios important to you (data breach, compliance failure) and seek appropriate coverage |
Common Pitfalls (and How to Avoid Them)
🔴 Common Pitfalls
- Over-focusing on upfront price while neglecting renewal caps, SLA, or scope terms
- Assuming "SAP will handle it" — your team still manages application-level tasks, testing, and security
- Vendor lock-in trap — surrendering perpetual licences and moving to a bundled cloud without an exit plan
- Rushing the decision — letting SAP's sales pressure override proper evaluation
- Leaving gaps undefined — unclear responsibility boundaries lead to finger-pointing during incidents
🟢 How to Avoid Them
- Balance negotiating both cost and terms as equally important
- Explicitly document who is responsible for what — upgrades, testing, security, monitoring
- Maintain competitive tension by evaluating alternatives (on-prem, self-managed cloud) openly
- Take the time needed to evaluate properly; don't let fiscal-quarter pressure dictate your timeline
- Define responsibility boundaries in writing for every operational scenario
Learn more about hidden costs and securing flexibility in RISE deals
Hidden Costs Guide →Cost Analysis and Calculation
Adopting RISE with SAP significantly changes your cost structure. The primary pricing metric is the number of Full User Equivalents (FUEs), which correlates to users with different roles. You purchase a block of FUEs that cover your users' access to S/4HANA. The subscription fee per FUE varies by volume tier and deployment edition — Private Edition is typically pricier than Public Edition. Indicative list prices are approximately $178 per FUE per month for Private Edition and $147 for Public Edition, though negotiated rates will differ significantly.
Key Cost Components
| Component | What It Covers | Key Considerations |
|---|---|---|
| Software subscription | S/4HANA software rights + other SAP modules in the bundle | Replaces licence + maintenance in on-prem model. Cost depends on scope and number of FUEs. |
| Infrastructure & hosting | HANA database instances, compute, storage, backups, system maintenance | Compare to direct hyperscaler pricing for similar resources to gauge SAP's premium. |
| SAP BTP credits | Credits for extensions, integrations, and custom development on BTP | Understand how many credits you receive and what they equate to. Unrealised value if unused. |
| Business Network fees | Starter pack for SAP Business Network (Ariba, etc.) | Covers basic level only. Heavy usage beyond the starter pack incurs additional fees. |
| One-time costs | Migration, implementation, data conversion, integration work | NOT included in the subscription. Requires separate project budget — often substantial. |
Financial Comparison: RISE vs. On-Prem vs. Cloud DIY
When comparing RISE to alternative models, conduct a multi-year total cost of ownership (TCO) analysis that accounts for all direct and indirect costs.
| Cost Factor | RISE with SAP | Traditional On-Prem | Self-Managed Cloud |
|---|---|---|---|
| Software | Subscription (included) | Perpetual licence + annual maintenance | Perpetual licence + maintenance (or separate SaaS) |
| Infrastructure | Included in subscription | Data centre / hardware (CapEx) | Direct hyperscaler contract (OpEx) |
| Management | SAP handles basis operations | Internal IT team or hosting partner | Internal team or managed service provider |
| Upgrades | SAP-controlled cadence | Customer-controlled (project effort) | Customer-controlled |
| Flexibility | Limited mid-term changes | Full control | Full control over infrastructure |
| Hidden costs | BTP overages, network fees, implementation | Hardware refreshes, upgrade projects | Multi-vendor coordination, cloud optimisation |
| Risk transfer | SAP bears operational risk (with SLA) | Customer bears all risk | Split between customer and cloud provider |
SAP RISE vs. Alternative Deployment Models
To make an informed decision, compare SAP RISE with the two primary alternatives: keeping SAP on-premises or using a self-managed cloud deployment. Each model has distinct financial and operational implications.
☁️ RISE with SAP (Vendor-Managed Cloud)
Simplified engagement with a single contract and single point of accountability. Faster time to value on S/4HANA — SAP handles technical migration and upgrades. Reduced need for in-house infrastructure expertise. Cloud-only features and innovations (AI, continuous updates) available immediately. Predictable OpEx costs aligned to usage.
Potentially higher cost over the long term — you pay for convenience and SAP's margin. Loss of licence ownership — you become a "renter" with exposure to future price increases. Limited flexibility, especially in Public Edition where customisation is restricted. Vendor lock-in — core systems and data tied to SAP's environment, making exit difficult. All change management processes go through SAP, which may be less agile for certain needs.
🏢 Traditional On-Premises (Customer-Managed)
Full control over systems, customisations, and upgrade timelines. Perpetual licence ownership providing long-term usage rights and the option to use third-party support. Costs can be lower if infrastructure and support are optimised — no cloud vendor margin. No mandatory recurring fees beyond maintenance (which you can opt out of if you forgo updates).
Requires significant internal resources or hosting partners for operations, backups, DR, monitoring, and compliance. Large upfront investments in licences and hardware. Slower adoption of new features — cloud gets priority for SAP innovations. Risk of running outdated technology if upgrades are deferred. You carry all operational risk.
🔧 Self-Managed Cloud (Customer on Hyperscaler)
Combines control with cloud benefits. You can bring existing SAP licences to the cloud or subscribe to S/4HANA outside of RISE. Negotiate directly with infrastructure providers — potentially securing better rates or leveraging existing cloud credits. Choose your own support providers. Scale infrastructure on your terms without SAP as an intermediary. Many large enterprises prefer this approach to avoid the bundled SAP layer.
You assume integration responsibility — coordinating between SAP (software) and cloud provider (infrastructure) when issues arise. Not a single-vendor model. You miss bundled RISE perks like BTP credits and Network access — those must be licensed separately. Requires cloud-savvy staff or a managed services partner. The onus of success is on you rather than SAP.
Which Model Should You Choose?
It depends on your organisation's priorities. If speed, simplicity, and having SAP accountable end-to-end are critical, RISE is a strong option. If cost control, flexibility, and avoiding lock-in matter more, consider on-premises or self-managed cloud. Many enterprises use a hybrid approach — keeping critical or highly customised systems on traditional setups while running standard workloads on RISE. When comparing, evaluate each scenario's 5–10 year costs, internal capabilities, and risk tolerance. There is no universal right answer — the best choice aligns with your business strategy and financial goals.
Recommendations for CIOs and Procurement
Assessing Fit
Evaluate RISE as both a technical solution and a business move. Does RISE's model align with your IT strategy and culture? If your company is cloud-first and wants to innovate rapidly on SAP, RISE could be a strong enabler. If you have a complex SAP landscape with numerous integrations or specialised customisations, verify whether they can be supported in RISE or if significant changes would be required. Consider timing — if you must be off ECC by 2027, you have a compelling event; otherwise, you may have more leverage to wait and negotiate.
Preparation and Negotiation Strategy
Start engaging with SAP early and do your homework. Before seeing SAP's offer, develop a clear list of requirements and non-negotiables — maximum budget, required SLA, must-have terms. Internally, align IT, finance, and procurement on these goals to present a united front. Leverage independent expertise — benchmarks or advisors can reveal what discounts and terms similar companies achieved. Maintain competitive tension: even if you lean towards RISE, let SAP know you are examining alternatives including staying on-premises.
Final Decision Checklist
- Business case verified. You have compared RISE to alternatives and the value proposition is clear, with costs justified by benefits or intangibles. All stakeholders — CIO, CFO, procurement — agree on the rationale.
- Scope of contract understood. The contract covers all necessary components — ERP modules, environments, integrations — and you are aware of any exclusions. No "to-be-decided" gaps remain in the agreement.
- Key terms locked in. Negotiated items — discounts, renewal caps, SLA levels, exit clauses, expansion pricing — are explicitly written in the contract. You have minimised open risks such as uncontrolled renewals or undefined responsibilities.
- Transition plan in place. You have an implementation plan including who performs the migration, timeline, and associated costs. An internal team is assigned to vendor management to work with SAP after the contract is signed.
- Exit strategy defined. You know what you would do if you needed to leave RISE after the term. Data export and continuity options are documented, and you have retained any rights possible — even if it is just the knowledge of how to licence S/4HANA on-premises if needed.
How Redress Compliance Helps with SAP RISE
Considering RISE with SAP? Get Independent Advisory First.
SAP RISE negotiations involve complex trade-offs between cost, flexibility, and long-term risk. Our SAP advisory team has helped enterprises negotiate RISE contracts that deliver real savings while protecting against lock-in, uncontrolled renewals, and scope gaps. We bring independent benchmarking data, deep knowledge of SAP's commercial playbook, and proven negotiation strategies to ensure you get the best possible terms.