SAP Rise vs Grow.
SAP’s cloud-first strategy is transforming how businesses adopt enterprise software. In recent years, SAP has introduced offerings like RISE with SAP to help customers migrate to cloud-based ERP solutions. These packages bundle SAP’s flagship S/4HANA Cloud ERP with various services under a subscription model, catering to different audiences and needs.
RISE is positioned as an all-encompassing “business transformation as a service” for established SAP customers and larger enterprises. GROW (launched in 2023) targets mid-sized companies and newcomers to SAP looking for a faster, simplified cloud ERP adoption.
This article compares SAP RISE and SAP GROW, focusing on cost, licensing, and contract considerations, to help business decision-makers determine which option best fits their organization.
(Image: SAP’s cloud ERP offerings like RISE with SAP and GROW with SAP are key pillars of its strategy to transition businesses to subscription-based cloud solutions)
RISE and GROW align with SAP’s cloud strategy of driving customers from on-premise systems to SAP S/4HANA Cloud, but they differ in scope and intent.
Below, we break down each offering, examining its cost model, SAP Rise licensing approach, and key considerations for contract negotiations. We conclude with guidance on choosing the right path for your business.
What is SAP RISE?
RISE with SAP is SAP’s flagship cloud offering, introduced in 2021 to help enterprises achieve end-to-end digital transformation. It bundles the core SAP S/4HANA Cloud (available in both Public and Private editions) with a suite of extras – including SAP Business Technology Platform (BTP) credits, business process intelligence tools (e.g. SAP Signavio for process analysis), and access to SAP’s Business Network – all under a single subscription contract.
In essence, RISE provides a “one hand to shake” by combining what would traditionally be separate software licenses, infrastructure hosting, and support services into one package managed by SAP. This means SAP (and its cloud infrastructure partners) takes on responsibilities like system hosting, technical monitoring, and updates, relieving the customer’s IT team of much of the operational burden.
Licensing and Cost Structure: RISE is sold on a subscription basis, typically with a multi-year contract (e.g., 3 or 5 years), and pricing is based on metrics such as Full User Equivalents (FUEs) rather than traditional perpetual licenses. The FUE model simplifies user licensing by aggregating different user types into a unified metric. For example, a heavy “Professional” user might count as 1.0 FUE, whereas a lighter user might count as 0.2, allowing flexibility as your workforce’s usage mix changes.
The subscription fee in RISE covers the S/4HANA software, infrastructure (whether SAP’s data centers or hyperscalers like AWS or Azure), and standard support and SLA commitments. Because it’s an all-inclusive model, the pricing can appear complex – SAP’s quote will factor in the size of your system (in terms of users and data), any additional cloud services, and the scope of SAP’s managed services.
SAP often touts that RISE can lower the total cost of ownership by up to 20% compared to a traditional on-premise deployment over time, thanks to efficiencies in cloud infrastructure and avoiding large upfront investments. Key benefits of RISE include:
- Comprehensive Package: One subscription covers software, hosting, and basic technical management, simplifying vendor management.
- Flexibility and Customization: With the Private Cloud Edition, customers can implement more extensive customizations and choose deployment options, making RISE suitable for complex scenarios that require tailored solutions.
- Built-in Tools: RISE bundles transformation tools – e.g., process analytics to optimize workflows, automatic software updates, and credits for SAP BTP to extend or integrate the system, adding value beyond just the ERP software.
- Single Contract & Accountability: With RISE, SAP acts as the single point of contact. Instead of negotiating separate contracts for software licensing, cloud hosting, and support, businesses deal with SAP for all these aspects. This can streamline contract management and expedite issue resolution under a unified SLA.
Ideal Customer Profile: RISE with SAP is generally best suited for mid-sized to large enterprises, often existing SAP ERP (ECC or S/4HANA) on-premise customers looking to modernize and migrate to the cloud. It shines in scenarios where a company has complex processes or industry-specific requirements that necessitate extensive customization, integration with other systems, or a need for a private cloud option due to regulatory compliance.
For example, a global manufacturer running a heavily customized SAP ECC might choose RISE to migrate to S/4HANA Cloud, while preserving critical custom extensions and leveraging SAP’s assistance during the transition. RISE is also attractive to organizations that want a comprehensive transformation, not just an ERP technical upgrade but also business process re-engineering and adoption of cloud innovations (AI, advanced analytics, etc.) as part of a long-term strategy.
Conversely, companies with an established internal cloud infrastructure strategy or those unwilling to cede control to SAP may find RISE less appealing if it conflicts with their preferred cloud architecture or existing third-party outsourcing relationships.
Read about SAP Rise Negotiations.
What is SAP GROW?
GROW with SAP is a newer offering (announced in 2023) designed to provide a fast-track, simplified cloud ERP for small and mid-sized businesses. It centers on SAP S/4HANA Cloud Public Edition – a SaaS, multi-tenant ERP environment – delivered in a preconfigured, best-practice package that SAP claims can be up and running in weeks. T
he philosophy of GROW with SAP is to deliver the most essential ERP capabilities with minimal complexity: think of it as a leaner bundle that forgoes some of the extensive customization and add-ons of RISE in favor of simplicity, speed, and lower cost. SAP has positioned GROW as ideal for businesses with revenues below $1 billion and those new to SAP, including startups, scale-ups, and those switching from non-SAP or legacy small ERPs.
Licensing and Cost Structure: Like RISE, GROW with SAP uses a subscription licensing model (no perpetual license; it’s SaaS). Pricing is typically more straightforward and entry-level than RISE, often presented in predefined packages.
SAP offers GROW in two main editions (Base and Premium) with a transparent set of included components. The Base edition provides core S/4HANA Cloud public edition functionality, covering standard finance, procurement, sales, and more. It also includes a starter set of SAP Business Technology Platform credits and a few add-ons, such as basic procurement (Ariba) features.
The Premium edition builds on that with additional capabilities – for example, more advanced financial modules, planning with SAP Analytics Cloud, SAP Sales Cloud CRM, and Concur Expense integration. Both editions are sold as subscription bundles meant to be “ready-to-run.” Importantly, infrastructure costs are included. As a multi-tenant cloud, SAP handles all hosting and updates, so customers don’t need to budget separately for hardware or cloud operations.
GROW also leverages the FUE (Full User Equivalent) licensing concept, allowing flexibility in user types while keeping licensing simple and scalable.
Because GROW is designed to be affordable and accessible, the cost structure typically involves lower upfront costs and predictable monthly or annual fees. There are “no hidden fees or upfront infrastructure costs”, as one SAP partner describes.
This makes budgeting easier for midmarket firms. Key benefits of GROW with SAP include:
- Rapid Deployment: GROW comes with preconfigured industry best practices and guided implementation tools (using SAP’s Activate methodology), enabling go-live in as little as 4–8 weeks for a straightforward scope. This accelerated timeline means faster time-to-value.
- Lower Cost Entry Point: The pricing is streamlined and typically lower than a full RISE package. GROW avoids the high upfront costs of extensive customization by focusing on standard features. It’s a subscription model built for cost predictability and low total cost of ownership (TCO), appealing to businesses with tight budgets.
- Scalability and Future Growth: As the name suggests, GROW is meant to scale with the business. Companies can start with what they need and add users or modules over time. Since it’s a public cloud, adding capacity or new features (such as an SAP cloud add-on) is usually a matter of adjusting your subscription. The standardized nature ensures that as you grow, you’re always on the latest version (automatically updated every quarter by SAP) without needing hefty upgrade projects.
- Simplicity (Clean Core): GROW emphasizes sticking to SAP’s standard processes— a “clean core” approach. This reduces implementation risk and complexity. While it means less customization, it also ensures that you benefit from SAP’s continuous innovations and avoid technical debt. Many mid-sized firms value a solution that works out of the box without needing a large IT team to tailor or maintain it.
- Included SAP Services: Even though leaner than RISE, GROW still includes helpful extras, such as some SAP BTP credits for extensions, SAP Build tools for low-code apps, and community and learning resources to support adoption. It also offers optional add-ons at “commercially attractive” rates exclusive to GROW customers (for example, you could plug in SuccessFactors or additional SAP modules as your needs evolve).
Ideal Customer Profile: GROW with SAP is tailored for small and mid-sized enterprises (SMEs) or any organization that wants a standardized ERP quickly, without a huge upfront investment. Companies with relatively straightforward processes, or those willing to adopt SAP’s best practices with minimal tailoring, are the best fit.
This could include a manufacturing or distribution company that has outgrown entry-level accounting software and needs a robust ERP, or a fast-growing firm that wants to modernize on a proven platform but can’t afford a long project. GROW is also ideal for greenfield implementations – if you have no significant legacy SAP footprint to worry about, starting fresh on GROW provides a clean, simpler path.
On the other hand, companies that foresee the need for heavy customization or have unique processes might find GROW too restrictive. In such situations, they might opt for RISE or a traditional approach, allowing for a private cloud or on-premise solution to be tailored extensively. GROW is for those who value speed, simplicity, and lower cost over deep customization.
Cost Comparison: RISE vs. GROW
When evaluating costs, it’s essential to understand the different pricing models of RISE and GROW and how costs can change over both the short and long term.
Pricing Models: GROW with SAP features a straightforward subscription pricing model that is generally lower in absolute terms than RISE. It’s essentially SaaS pricing – you pay a subscription fee per year (often broken down by a specific number of users or a usage metric), which covers both the software license and cloud service.
The emphasis is on transparency and simplicity: a midmarket customer can often get a clear quote for a GROW package (e.g., Base or Premium edition) without extensive customization. By contrast, RISE with SAP has a more complex, bundled pricing structure. The RISE subscription includes more components (infrastructure choices, multiple software elements like Signavio, and Ariba Network Starter, etc.), which means the quote is tailored to each customer’s specific situation.
Two RISE customers may have very different annual fees, depending on the scope of included services, the size of their user base, and the cloud resources they need. In essence, RISE is a custom bundle priced for your transformation needs, whereas GROW is a pre-packaged bundle with a set price for a specific usage tier.
Upfront vs. Long-Term Costs: With GROW, upfront costs are minimal – no large license fee or hardware investment is needed at the start, just a subscription fee, which can often be paid annually or even quarterly. This lowers the barrier to entry and conserves cash for a smaller business.
The total cost of ownership (TCO) is optimized by having SAP handle maintenance and using standardized configurations, which means you spend less on custom development and ongoing administration.
Over the long term, GROW’s costs will scale primarily with the number of users or additional modules you activate, making it relatively predictable. RISE, on the other hand, often requires a higher initial investment or commitment.
While you still pay as a subscription, the scope of your buying (including migration services or broader capabilities) can make the annual cost quite substantial. However, RISE’s higher cost can be justified by the value it includes. For example, the ability to carry out a complex migration, integrate multiple systems, and run a large-scale ERP with SAP and hyperscaler infrastructure, all managed together.
Over time, if RISE helps the company streamline operations and eliminate on-premise costs, those efficiencies can offset the upfront premium. In summary, GROW is optimized for lower TCO from the start, whereas RISE requires a larger investment but promises greater long-term benefits, including more flexibility and innovation, for those who need it.
Additional Cost Considerations: Regardless of RISE or GROW, businesses should be aware of possible add-on costs that can arise:
- Indirect Access Fees: SAP’s infamous’ indirect access’ licensing (now formalized as the Digital Access model for document-based licensing) can impact costs if third-party systems create or access SAP data. In cloud subscriptions, some of this risk is mitigated by user-based licensing, but not eliminated. RISE contracts may include a certain amount of Digital Access or give an option to license it. However, if not explicitly covered, you may face additional fees for documents created using non-SAP applications. For example, if your e-commerce platform generates sales orders in S/4HANA, these may count as documents requiring a digital access license if they are not included. Clarifying this in the contract is crucial to avoid unbudgeted costs from an audit. GROW customers, with simpler landscapes, should still inventory any external integrations (e.g., a third-party CRM or e-commerce platform) and ensure they stay compliant with indirect usage rules to prevent unexpected costs.
- Integrations and Extensions: RISE and GROW include some SAP BTP credits (cloud platform credits) for building extensions or integrations. These credits effectively pre-pay a certain consumption of SAP’s platform services. If you use more than the included amount – for instance, building many apps or high volumes of API calls/integration flows – you may incur additional charges once you exceed your credits. RISE typically includes more generous credits (because larger enterprises might need more integration) than GROW, which offers enough for basic needs. Keep an eye on these as a cost factor: heavy integration or reporting scenarios might require you to purchase extra BTP capacity.
- Scalability and Overages: A big advantage of the cloud model is that you can scale up users or data, but doing so will raise costs. With RISE, your contract will specify the number of FUEs (users) and system size. If your business grows beyond the contracted amount – say you acquire a company and need 500 extra users – you must amend the contract and pay for those at the rates in your agreement (if pre-negotiated) or potentially at higher list prices if not pre-agreed. The same goes for storage or transaction volume: the contract may include a certain database size or throughput, and any overage fees are paid beyond that. GROW is similar because its pricing scales with added users or any optional add-ons you enable. The key difference is that GROW is aimed at a smaller scale, so if you exceed a GROW package’s bounds, it might signal that you’re outgrowing the GROW offering itself. In any case, long-term cost predictability requires thinking about growth – negotiating foreseeable expansions upfront if possible, or understanding the rate card for adding more users, so there are no financial shocks as you scale.
- Renewal and Escalation: While not an immediate “cost,” it’s important to note that both RISE and GROW subscriptions will come up for renewal (unlike a perpetual license, which you own outright). SAP often builds in annual escalators or relies on renegotiation at renewal time. For instance, some RISE deals may have a clause for a yearly price increase (e.g., 3-5% per year) to account for inflation or added value. If not, SAP might seek a higher price at renewal if usage has increased or the initial discounts were introductory. We’ll discuss negotiation strategies to handle this, but financially, one should plan for the fact that cloud costs can increase over time and factor that into total cost of ownership (TCO) calculations.
In summary, RISE tends to cost more than GROW due to its breadth and flexibility, but it also covers more ground, potentially replacing multiple other costs with a single bundle. GROW is cost-effective for what it delivers, but it is intentionally narrower in scope. Companies should evaluate not just the sticker price but also what is included and what additional costs might emerge based on their specific system usage.
Licensing Differences
SAP’s move from traditional on-premise licensing to cloud subscriptions (as seen in RISE and GROW) brings several important differences in how licenses are structured and managed.
Perpetual vs. Subscription Licensing: Historically, SAP sold perpetual licenses – you paid a one-time large fee for software usage rights and then an annual maintenance fee (typically around 22% of the license cost) for support and updates. This gave the customer the right to use the software indefinitely (perpetually), with full control over if and when to upgrade.
However, the customer also had to provide the infrastructure and handle upgrades themselves. In the RISE/GROW cloud model, this is flipped to a subscription license: you pay for access to the software for a defined period, and SAP (plus its cloud partners) takes care of hosting, maintenance, and keeping the software up to date.
You don’t “own” the software license – if you stop subscribing, you lose access, but you get a significantly more turnkey service. The subscription fee already includes what would have been maintenance, support, and infrastructure. So, while the ongoing cost is higher than just maintenance in a perpetual model, many separate costs are consolidated. For businesses, this means shifting from a capital expenditure (CapEx) model, where assets are bought upfront, to an operating expenditure (OpEx) model, where expenses are paid as needed.
One practical consideration here is budgeting and cost predictability: with perpetual licenses, after the upfront payment, companies had a steady maintenance fee (subject to annual increase, like SAP’s ~5% support hikes). With subscriptions, the annual cost is higher, but it is known for the contract term. However, at renewal, the entire contract is up for negotiation, introducing a potential cost risk if not managed effectively. It’s crucial to negotiate favorable renewal terms to maintain cost predictability (more on that in the next section).
User-Based vs. Transaction-Based Metrics: Another key difference lies in how usage is measured for licensing. Traditional SAP on-prem licenses often involved a mix of named user licenses and “engine” metrics. For example, you might have 100 Professional User licenses and licenses for specific modules, measured by the number of orders processed or revenue managed (these are engine metrics).
Additionally, indirect usage (access by non-SAP systems) historically required separate licensing (e.g., SAP’s Digital Access model charges by the number of documents created indirectly). This could make on-prem licensing quite complex and sometimes unpredictable if usage patterns change.
RISE and GROW aim to simplify licensing using a per-user subscription model. Both use the Full User Equivalent (FUE) concept for S/4HANA Cloud, meaning all users are counted in a normalized way. Instead of buying different types of user licenses, you purchase a total FUE count.
This can greatly simplify compliance – you no longer need to worry about the number of users in each category, just that the total authorized usage is within your FUEs. It also provides some elasticity; for instance, five light users might equal one FUE, so you can mix and match roles without needing to adjust the contract for each minor change.
Transaction and consumption metrics have not disappeared entirely in the cloud. Certain cloud services in RISE/GROW are consumption-based; for example, the SAP BTP credits included are essentially a currency for consuming platform services, such as API calls, data storage, and additional apps. If you consume beyond the included credits, you pay by usage.
Similarly, SAP’s Digital Access (indirect document) licensing can still apply if an external app is creating a high volume of sales orders in your S/4HANA. Though SAP sometimes includes a baseline of digital access in RISE deals, it’s something to verify.
Also, in RISE’s SAP Business Network Starter Pack, the 2,000 Ariba network documents are a usage metric – exceeding this document count (for supplier transactions) would require purchasing additional document packs. The key difference is that in the cloud model, these usage-based elements are usually ancillary; the primary metric remains users (FUEs) or overall subscription size.
This tends to make licensing costs more predictable relative to on-prem because user counts are easier to forecast than transaction volumes. If your company grows in headcount or usage, you’ll need more FUEs (or a higher subscription tier in GROW). Still, ideally, these are negotiated at contract signing with volume discounts or, at least, known unit prices for additional blocks.
Impact on Scalability and Cost Predictability: With subscription licensing, scaling up is generally straightforward – you inform SAP and add more users or additional modules, and your subscription fee increases accordingly, or is prorated. This scalability is a benefit: you’re not limited by a fixed license count, as you would be with a true-up on-premises.
However, businesses must be vigilant about negotiating terms for scalability. It’s wise to include provisions in your RISE/GROW contract for anticipated growth, so that the cost per additional user or unit remains at the negotiated rate, rather than SAP’s list price at the time of expansion.
Another aspect is that subscription contracts often have built-in flexibility for temporary adjustments. For example, some RISE agreements allow for a “ramp-up” (purchasing a portion of licenses initially and increasing over a couple of years), which helps align costs with deployment stages.
In contrast, perpetual licensing required you to buy upfront for peak usage or risk non-compliance if you exceeded it. Thus, licensing under RISE/GROW can offer more agility. Cost predictability is high during the contract term if usage remains stable, but it’s always a good idea to plan for renewal. Ensuring predictable costs means locking in multi-year rates or caps on increases.
With perpetual licenses, you had predictability because the licenses were paid for, and only maintenance costs could rise (SAP has been raising maintenance by around 5% yearly). With cloud subscriptions, the entire subscription is subject to renegotiation or inflationary increase after the term, making it a crucial point to manage in negotiations.
In summary, RISE and GROW use subscription and user-centric licensing, trading off the complexity of the old model for a more service-oriented approach. This generally makes life easier for license management, as there are fewer moving parts to track. Still, it requires a shift in financial planning – treating ERP as an ongoing service expense rather than a one-time asset purchase.
Companies should embrace simplicity but proactively address any usage-based components, such as indirect access or extra services, to avoid unexpected costs.
(Image: The SAP cloud model consolidates software and infrastructure into a service, with user-based licensing, shifting the cost model from upfront licenses to ongoing subscriptions)
Contract Negotiations
Whether you choose RISE or GROW, negotiating the contract with SAP is a critical step to ensure you get favorable terms and cost certainty.
Here, we highlight typical contract terms and differences, and key negotiation strategies:
Contract Structure and Terms:
- Single Contract vs. Traditional: RISE with SAP is delivered via a single contract (often accompanied by an attached order form with SAP’s Cloud General Terms and Conditions), which covers both the software subscription and cloud services. This is a departure from the traditional model, where you might have separate agreements for software license, maintenance, hosting, etc. The Cloud GTC for RISE/GROW is much shorter (around four pages) compared to old on-premise contracts, which could be 40-50 pages of terms. The upside is simplicity, but some terms from past agreements may not carry over. For instance, if you previously negotiated special discounts or perpetual license protections, those would be superseded by the new RISE/GROW contract. GROW contracts are similarly streamlined. They tend to be more standardized, given that the offering is pre-packaged, meaning there may be limited room to alter the structure. Small businesses often receive a boilerplate contract. RISE and GROW are typically sold as subscription terms (multi-year) rather than month-to-month. A common term is 3 years, with many RISE deals going 5 years to secure better pricing.
- Renewal and Price Escalation: Cloud contracts typically don’t auto-renew at the same price indefinitely; you will either renegotiate at renewal or accept a predefined increase. SAP has been known to push for annual uplifts even within multi-year cloud terms – for example, a 5% increase each year of the term or at renewal. As a customer, you want to negotiate price protections. This could mean capping the yearly increase (e.g., no more than CPI or 3% per year) or even locking in the initial price for a certain number of years. Also, clarify what happens at renewal: Do you have the right to renew, and if so, is the renewal price capped, or will it revert to the then-current list price? Ideally, you get language in the contract that limits SAP’s ability to impose a steep hike at renewal. Otherwise, you could face a costly surprise after your initial term when you’re already deep into the solution.
- Flexibility and Termination: Review the terms related to scaling up and down, as well as termination. RISE contracts often have some flexibility to add additional services (via addenda) as your needs grow. However, scaling down (reducing users or scope) is typically not allowed until renewal – you generally commit to a certain consumption for the full term. If your business might shrink or divest units, you should discuss how that would be handled (for instance, can you drop users if a division is sold?). Another area is exit provisions: if you decide not to renew, the contract should outline data return, transition assistance, and any penalties. Ensure that there is a provision for SAP to assist with data extraction or migration if needed, and ideally, no significant termination fees beyond what is contractually committed. GROW customers should also check if there’s an initial lock-in period. Some GROW deals might offer a lower entry price but require a multi-year commitment.
Negotiation Strategies:
Negotiating with SAP can be challenging – SAP’s sales teams are known for aggressive tactics to drive cloud adoption.
Here are some strategies for RISE/GROW contracts:
- Know Your Needs and Scope: Before signing, carefully review what’s included in the SAP proposal. Don’t assume every component is necessary. SAP might bundle products you won’t use (for example, an extra module or too many users). Push to remove or reduce those that can cut costs. Conversely, ensure that all the necessary things are included – if you plan to use a specific feature or module, verify it’s in the contract so you don’t incur unexpected fees later for something missing. Clarity at this stage prevents costly change orders post-signature.
- Leverage Competition and Alternatives: Even if you’re likely to choose SAP, maintain leverage by evaluating other alternatives. SAP knows that mid-market customers could opt for competitors like Oracle NetSuite or Microsoft Dynamics, and large enterprises could stick with on-premise or another cloud. Suppose SAP has also introduced GROW with SAP (for midmarket). In that case, larger customers can’t use it directly, but being aware of it can give you talking points: for instance, “We want a simple, scalable deal more like GROW – how can we get some of that simplicity/price benefit in our RISE deal?”. If you are an existing ECC customer, also request a proposal for S/4HANA on-premises or a subscription outside of RISE, even if SAP is reluctant, so you have a baseline to compare. SAP will often only seriously negotiate if it feels competitive pressure or risks losing the deal.
- Time Your Negotiations: SAP quotas and fiscal year-end pressures are real. Typically, SAP might offer the best discounts at quarter-end or year-end when it needs to close deals. However, the caution is that SAP may withdraw or reduce discounts if you delay too long. It’s a fine balance – you want to negotiate when SAP is hungry to close, but not push it past their deadline. Work with your SAP account executive to understand their timing and use that to your advantage. If you get a strong offer, try to get it in writing that the pricing is valid even if you don’t sign immediately (to avoid the “discount expires” pressure).
- Negotiate Future Growth in Advance: As mentioned in the cost section, one of the biggest mistakes is not planning for growth. If you expect more users or capacity in a year or two, negotiate those rates now. For example, include a clause that allows you to add users at the same per-user rate as the initial batch or at a fixed discount percentage off the list. Otherwise, if you return to SAP mid-term for more, you might pay a premium. SAP may offer a step-in license model under RISE, where you start with a portion of the licenses and gradually ramp up over time, which can align costs with deployment . If so, ensure that future increments are pre-priced. The goal is to avoid future expansion being priced as “new sales” at potentially much higher rates.
- Secure Price Protections and Caps: Try to cap any annual price increases. It’s reasonable to allow some inflation adjustment in a long-term deal, but you could negotiate, say, a 0% increase for the first 2 years and a max 3% thereafter, or tie it to a local CPI index with a cap. Also, ensure that SAP cannot automatically increase the price by a huge amount at renewal. Even if SAP won’t fix the renewal price now, you can negotiate a cap on renewal increase (for instance, the renewal price shall not increase by more than X% over the prior term). Another tactic is to negotiate a conversion credit if you have existing SAP licenses – SAP sometimes gives credit for your unused on-premises investment when moving to the cloud. Make sure any such credits or discounts are clearly stated and will continue into the renewal (or at least that you won’t suddenly lose a discount at renewal).
- Address Indirect Use and Compliance in Writing: We noted indirect or digital access licensing as a potential cost. During negotiations, we explicitly asked how indirect access is handled in the contract. If possible, get an included allotment of Digital Access documents or a clause that covers typical scenarios, such as the use of a non-SAP front end or e-commerce. If SAP is not including it, consider leveraging the Digital Access Adoption Program to get a discounted package and factor that into your deal. At a minimum, document any verbal assurances in the contract or an official communication. You want no grey area on this topic because it’s a common source of audits and unexpected fees if left vague.
- Retain Exit and Flexibility Options: While you hope for success with the new system, also consider the worst-case scenario. Try to include termination assistance – e.g., SAP helping with data export if you leave – and negotiate any penalties down. Also, consider what happens if you need to adjust mid-term. For example, if you merge with another company that also uses SAP, can you consolidate contracts, or will you have to pay double? If you divest a unit, can you transfer part of the subscription to them or drop those users? These scenarios should be discussed up front. The more flexibility you can build in (even if just an agreement to negotiate in good faith for such events), the better.
- Use Expert Help if Needed: SAP contracts can be intricate, and a lot of money is at stake. Don’t hesitate to involve a third-party advisor or licensing expert if your deal is large. Firms experienced in SAP negotiations are aware of common pitfalls and know how to benchmark discounts. They can often help you save far more than their fees by pinpointing negotiable areas and providing leverage. SAP reps know when an expert is involved and the customer is well-informed. At the very least, do thorough research – read case studies or seek peer advice. Even forums like the SAP community or r/SAP on Reddit have discussions on RISE/GROW experiences. Knowledge is power in negotiation.
Which One is Right for Your Business?
Choosing between RISE with SAP and GROW with SAP ultimately comes down to your organization’s size, complexity, strategic goals, and budget.
Here are key factors and scenarios to consider:
1. Company Size and Existing Landscape:
- Small to Mid-Sized, No Heavy SAP Footprint: If your company is mid-sized (say tens to low hundreds of millions in revenue), and you are either new to SAP or running a basic legacy ERP, GROW with SAP is likely a strong fit. It’s tailored for businesses that need standard ERP capabilities quickly and cheaply. For example, a regional distributor with 200 employees might choose GROW to implement financial and supply chain management in a few months without needing a large IT team.
- Large Enterprise or Complex Operations: If you are a large organization (with revenues in the billions) or a mid-sized organization with very complex operations (multiple divisions, a global footprint, and industry-specific processes), RISE with SAP is probably a better fit. RISE’s ability to handle brownfield migrations (converting an existing SAP ECC with customizations) and to offer private cloud deployment for added control is crucial in such environments. For instance, a multinational manufacturing conglomerate running SAP ECC on Oracle DB will benefit from RISE’s comprehensive tooling and support to transition to S/4HANA Cloud and the flexibility to keep some unique custom processes via extensions on SAP BTP.
2. Cloud Strategy and IT Resources:
- Lean IT or a Desire for Turnkey SaaS: If your strategy is to minimize on-premises infrastructure and outsource technical complexity, GROW with SAP offers a true SaaS experience (public cloud only) that aligns well. Companies without a large IT department can rely on SAP to manage the system. You get a clean, standard system always on the latest version – great for those who want an “ERP that just works” and allows the internal team to focus on business usage rather than IT maintenance.
- Strategic Control and Customization: If your company has a well-defined cloud architecture or specific reasons to control the environment (for example, you have already invested in a preferred hyperscaler or require data residency controls), RISE provides more deployment options. You can deploy S/4HANA in a private cloud (still managed by SAP or a partner, but isolated and with more control over upgrade timing). Also, suppose you have a strong internal IT team that wants to build custom enhancements. In that case, RISE’s inclusion of SAP BTP and ability to accommodate custom code (especially in private edition) will be important. GROW might feel too limiting in such a case because it’s standardized for the masses.
3. Business Process Requirements:
- Standardized Processes: If your processes can largely follow SAP’s best practices – say you’re in an industry where the SAP model company approach fits 80-90% of your needs – then GROW with SAP will meet those needs without the overhead of customization. A services company or a generic manufacturing firm might find that the out-of-the-box processes in the S/4HANA public cloud cover their requirements well.
- Highly Customized or Regulated Processes: If your business model is unique or you operate in a heavily regulated industry requiring specific functionality (e.g., complex tax, audit, or validation processes), RISE is more likely to accommodate these. Because RISE can leverage the private edition of S/4HANA, you can retain modifications or use industry-specific add-ons that might not be available in the public cloud. Also, industries like pharmaceuticals or defense, where validation and control are key, often lean towards the private cloud for compliance, which means RISE, not GROW.
4. Cost Considerations:
- Budget Constraints: For organizations with limited budgets or that need to show quick ROI, GROW is very attractive. You avoid large upfront costs and get a predictable subscription that is generally lower than an equivalent RISE subscription. If ROI within a year or two is critical (for example, a PE-backed company seeking efficiency gains quickly), GROW’s rapid deployment and lower price point check those boxes.
- Willingness to Invest for Transformation: If the company sees ERP as a platform for long-term transformation and competitive advantage, it may invest more in RISE. RISE could involve a higher cost and a longer project. Still, if that enables entering new markets, re-engineering processes, or integrating a digital supply chain, the investment can pay off. It’s important to weigh TCO: a heavily customized RISE private cloud might cost more each year, but consider if it replaces the costs of running multiple legacy systems or if it enables growth that was not possible before. Also, consider the opportunity cost – not doing a needed transformation could leave the business at a competitive disadvantage. RISE’s bundle (including innovation tools and even sustainability or advanced analytics in higher editions) might be justified by strategic initiatives beyond basic ERP.
5. Timeframe and Urgency:
- Need for Speed: If the business goal is to implement a modern ERP within a few months (for example, to support a new product launch or replace a retiring legacy system by a hard deadline), GROW is designed for speed. The implementation methodology is accelerated; partners offering GROW implementations often tout a go-live time of 6-8 weeks for the standard scope. This rapid timeline is usually not feasible with RISE, especially if there is data migration and customization – RISE projects can take several months to over a year. So, GROW could be the right choice for a quick win or a pilot in one division.
- Comprehensive Transformation Roadmap: If your organization views the S/4HANA move as one piece of a larger digital transformation (involving process redesign, organizational change, and phased rollout across business units), then RISE provides the tools and flexibility to support that comprehensive program. The timeline will be longer, but you can align RISE with your roadmap, perhaps using a phased approach, such as migrating one business unit at a time. RISE’s inclusion of advisory services (SAP or partners can provide process discovery, etc.) can also help with large transformations.
Use Case Examples:
- Example 1: Midmarket Manufacturer (GROW Scenario): A $200M manufacturing company with minimal IT staff runs a mix of spreadsheets and a small legacy ERP. They want to standardize on modern best practices quickly to support growth. GROW with SAP is an ideal fit – they choose the GROW Base edition, getting core finance and supply chain in SAP S/4HANA Cloud. In about three months, with the help of an SAP partner, they will go live on a new cloud ERP that will improve their inventory management and financial reporting. The subscription cost is manageable, and they didn’t have to invest in a data center or large IT projects. Over time, they plan to add more users as they open new locations and maybe upgrade to the Premium edition to use SAP Analytics Cloud for better forecasting. This company values getting a fast, predictable outcome with minimal disruption.
- Example 2: Global Retail Corporation (RISE Scenario): A multi-billion-dollar retail company uses SAP ECC on-premises with numerous custom point-of-sale integrations and a data warehouse. With ECC support ending in a few years, they decided to move to S/4HANA, but must ensure their custom sales processes and integrations to e-commerce platforms continue smoothly. They opted for RISE with SAP. SAP provides a RISE contract, including the S/4HANA Private Cloud edition, which allows the retailer to migrate certain custom ABAP programs. The contract also includes a SAP Business Network starter to connect with suppliers and Signavio tools to analyze and improve processes during the migration. It’s a large project – taking 12 months or more – and the cost is higher, but the company treats it as a strategic investment to revamp their systems. They negotiate the RISE deal to include a flexible ramp-up of users (because they will roll it out store by store) and cap the renewal increase. After two years, they have a modern, scalable ERP in the cloud, managed by SAP, and they’ve avoided the complexity of dealing with multiple vendors. This company values flexibility, comprehensive scope, and SAP’s direct involvement in reducing risk in a major transformation.
When deciding between the two, ask: Are speed and simplicity most important, or do we need flexibility and a tailored approach? Also, consider your internal capabilities – if you lack IT capacity, GROW’s simplicity is a boon; if you have a strong IT team, you might be able to leverage RISE’s options more fully.
Conclusion
SAP RISE vs SAP GROW – Key Differences and Recommendations: RISE with SAP and GROW with SAP represent two paths to the cloud, each aligned to different business needs. RISE is about a tailored, all-in-one transformation for companies with complex requirements, offering extensive customization, a choice between public and private cloud, and a rich bundle of tools (although at a higher cost and complexity).
GROW is about simplicity and rapid adoption, targeting mid-sized firms with standardized needs, delivered exclusively in the public cloud for lower costs and faster ROI. Both use subscription licensing and promise cloud benefits, such as automatic updates and scalability, but they differ in terms of scale and scope.
For business decision-makers: if you run a smaller or midmarket company looking for a modern ERP without breaking the bank, GROW with SAP is likely the right choice. It will keep your costs predictable and lower, and you’ll benefit from SAP’s best practices out of the box.
If you’re a larger enterprise with existing SAP investments and need a comprehensive solution that covers every detail, including custom processes or phased migration, RISE with SAP is better suited, despite the higher cost. It provides a one-stop shop for your cloud transition and the flexibility to shape the system to your needs.
In terms of cost, licensing, and contracts, remember these parting insights:
- Cost: GROW offers a lean cost structure, ideal for immediate value and lower total cost of ownership (TCO), whereas RISE requires higher spending but can deliver broader business value (think of it as paying for an entire transformation, not just software). Always analyze the 5-10 year total cost of ownership (TCO) of each option for your case – sometimes RISE’s higher subscription is offset by retiring many legacy systems or avoiding data center costs. In contrast, GROW’s savings might be lost if you need lots of extra add-ons down the road.
- Licensing: Both are subscription-based – no more perpetual licenses, which means you trade upfront expense for ongoing payments. Licensing is largely user-count driven (FUE), simplifying management. This favors clarity, but keep an eye on any usage-based elements (such as additional documents or storage) and factor those into your plan. The goal is to have no surprises, so ensure the licensing model of your choice covers all typical usage.
- Contract Negotiation: Enter negotiations well-informed. Leverage the fact that SAP is very eager to sign cloud deals (it’s a stated corporate priority) – this can translate into incentives for you, such as conversion credits, extra services, or discounted pricing. Don’t be shy to ask for those. Negotiate protections on renewals and future growth to safeguard your budget. And choose the right partners (implementation and advisory) to back you up – a smooth project and a good contract go hand in hand.
Ultimately, SAP’s cloud-first approach with RISE and GROW underscores that the future of ERP is in the cloud, but one size does not fit all. By understanding the differences in cost structures, licensing models, and contractual nuances, you can decide to align with your company’s strategy and negotiate an agreement that sets you up for success.
Whether you opt to “RISE” or “GROW,” the key is to ensure the offering you choose truly supports the growth and transformation of your business on favorable terms. Good luck with your SAP journey, and may your ERP investment yield strong returns in efficiency and innovation.
