Introduction – What Is RISE with SAP
RISE with SAP is a bundled subscription offering that combines SAP’s S/4HANA ERP software with cloud infrastructure, database, and services under one contract.
It delivers S/4HANA as a service – including the software licenses, the HANA database, hosting, and ongoing technical support – all for a recurring fee. SAP’s goal with RISE is to shift customers from large upfront license purchases to an operating-expense subscription model.
This provides customers with a simpler, all-in-one solution while giving SAP steady recurring revenue and tighter control over the customer’s environment.
What does a RISE subscription include? Typically, the RISE with SAP bundle covers:
- S/4HANA Cloud software – either the multi-tenant Public Cloud edition or a single-tenant Private Cloud edition of S/4HANA.
- SAP Business Technology Platform (BTP) credits – for building extensions, integrations, and using SAP’s cloud platform services.
- Cloud infrastructure & hosting – the underlying data center and hardware (either in an SAP data center or a hyperscaler like AWS, Azure, or GCP) to run your SAP systems.
- Technical managed services – SAP handles system administration tasks such as monitoring, backups, patching, and version upgrades as part of the service.
- Support and maintenance – access to SAP support (comparable to Enterprise Support) and tools like SAP Cloud ALM for managing the application lifecycle.
Context Insight: RISE is SAP’s way to own the entire stack — licensing, infrastructure, and support — and eliminate third-party control.
RISE Pricing Model Explained
Full Usage Equivalents (FUE): RISE contracts use a metric called Full Usage Equivalents (FUEs) as the core pricing unit. Instead of buying separate license types for each user, you purchase a total number of FUEs.
SAP assigns each user role a weight towards FUEs – for example, one Professional user equals 1.0 FUE, whereas a lighter user role (like an Employee Self-Service or a Warehouse clerk) might count as 0.1 or 0.2 FUE.
All your users are converted into this FUE total, which then determines your subscription fee. Essentially, you’re contracting for a pool of usage credits rather than named-user licenses.
Other pricing factors:
In addition to user count, RISE pricing takes into account several other inputs: the size of your HANA database (memory/GB requirements), any additional modules or industry solutions you add on top of core S/4HANA, the term length of the contract (RISE deals are usually 3 to 5-year commitments), and the level of support/SLA you require (standard included support versus premium support or uptime guarantees).
All these elements are bundled into what appears to be a single annual price for the RISE subscription.
Key Reality: RISE pricing looks all-in — but it’s layered on SAP’s most expensive cloud infrastructure and rigid renewal terms.
Checklist: When evaluating RISE pricing, make sure to:
- Confirm how SAP calculated your FUEs and which user roles were used. (Are you confident the user-role mapping isn’t overestimated?)
- Request a transparent price breakdown of each component (software, infrastructure, support) included in the RISE quote.
- Validate what’s included vs. excluded in the RISE bundle. (For example, products like SuccessFactors or Ariba are not part of base RISE and will be billed separately.)
Benefits vs Drawbacks
RISE with SAP offers some clear benefits, but it also comes with significant drawbacks. It’s important to weigh both sides before committing:
Potential Benefits:
- One-stop solution: One contract and one invoice for software licenses, infrastructure, and support, simplifying vendor management and accountability.
- Reduced complexity: SAP manages the infrastructure and technical operations, so you deal with fewer third parties (no separate hosting or MSP contracts).
- Faster deployment option: Especially with the public cloud edition, you can deploy more quickly using SAP’s pre-configured best practices and rapid provisioning.
- Predictable OpEx: Costs become a regular operating expense. CFOs may prefer the subscription model for its predictability and avoidance of large upfront capital outlay.
Hidden Drawbacks:
- Loss of flexibility: You surrender some control. SAP dictates the cloud infrastructure and enforces a set upgrade schedule. You can’t freely choose how or when to apply upgrades or make certain customizations, particularly in the public cloud version.
- Higher long-term cost: While year-one costs may look attractive, over a 4–5 year period, the subscription fees can exceed what a perpetual license + annual maintenance would have cost. The “all-in” convenience comes at a premium if you consider the long-term implications.
- License lock-in: During the RISE contract, any existing on-premise licenses you own are essentially inactive (you typically must waive using them). You can’t fall back on those perpetual licenses without terminating RISE, which means you’re locked into SAP’s cloud for the duration.
- Exit complexity: Getting out of RISE isn’t simple. If, after the term, you want to revert to an on-premise solution or a different one, you’ll need to migrate your data and potentially re-purchase or reinstate licenses. Planning an exit strategy can be complicated and costly if not anticipated early.
Expert Note: “RISE simplifies the bill, not the ownership — SAP still controls every layer.”
Negotiation Tactics for RISE Deals
A strategic approach can greatly improve your RISE with the SAP contract. Consider these negotiation tactics:
- Evaluate Existing Investments – Begin by inventorying all your current SAP licenses and maintenance agreements (ECC or S/4HANA). Leverage SAP’s Cloud Extension Policy to convert those old perpetual licenses into credit toward your RISE subscription. This avoids double-paying for software you already own. Insist that SAP give you full credit value for your existing licenses/maintenance – they might initially undervalue your legacy investment, so negotiate that up front.
- Push for Flexibility Clauses – Don’t accept a contract that is entirely rigid for the full term. Negotiate provisions that allow adjustments:
- True-down rights: the ability to reduce your FUE count if your user count or business volume decreases mid-term.
- Renewal cap: a limit on how much the subscription price can increase at renewal (e.g. cap annual price uplifts at 3%).
- Resource re-sizing: rights to adjust things like database size or even switch some user types annually without needing a whole new contract.
- Clarify Lock-In Terms – Prevent hidden lock-in by spelling things out. Ensure the contract specifies your right to exit and what happens at the end of the term. For instance, negotiate a clause that allows you to revert to on-premises or switch to another solution once the RISE term ends, with no penalties beyond perhaps stopping the subscription. Demand clear data extraction assistance: SAP should provide your full data in a usable format when you exit. Also, avoid auto-renewal traps by including a requirement that SAP must provide a renewal notice (e.g., 90–120 days before the term ends) and obtain your approval to renew, rather than auto-renewing you by default.
- Leverage Competition – Create bargaining power by showing SAP you have other options. Run an RFP or gather quotes for alternative solutions – whether that’s a different cloud ERP (like Oracle Cloud ERP or Dynamics 365) or simply hosting S/4HANA yourself on AWS/Azure with a systems integrator. Make it clear to SAP that both staying with on-premises and choosing a different cloud path are on the table. This signals that you’re willing to walk away, which can push SAP to sharpen its pricing and concessions to win your business on RISE.
- Align Internal Readiness – Involve your internal stakeholders early. Bring in IT operations, security, and legal teams to review the implications of RISE. Since SAP will manage the environment, ensure it meets your company’s requirements for aspects such as data residency, security compliance, and integration with other systems. Legal should review liability, data protection, and service level clauses. By aligning internally (IT, finance, procurement, and legal all on the same page), you can approach SAP with a clear list of must-haves and deal-breakers, strengthening your negotiation position.
Key Contract Clauses to Review
Certain clauses in a RISE with SAP contract can have outsized impacts on cost and flexibility. Scrutinize these key areas and negotiate improvements to protect yourself:
| Clause | What to Check / Beware | Negotiation Focus |
|---|---|---|
| Term Length | Standard RISE terms are 3–5 years. Once signed, you’re locked in for that duration (little to no cancellation allowed). | Aim for a shorter initial term (no more than 3 years) for flexibility. Avoid over-committing if you’re unsure about the long term. |
| Renewal Uplift | SAP often builds in a 5–10% annual price increase at renewal by default. This can make costs jump significantly after the initial term. | Cap the renewal increase (e.g. 3% max per year). Better yet, negotiate fixed pricing for a renewal term or an option to renew at the same rate. |
| Early Termination | Most RISE contracts disallow mid-term termination and impose heavy penalties if you try to exit early. You’re effectively stuck for the full term. | Push for a mid-term exit clause or mutual termination right after a certain point (e.g. after year 3) without severe penalties. At minimum, understand the penalties and try to soften them. |
| Included Services | The RISE contract may not include every SAP cloud product. (For example, SuccessFactors, Ariba, Concur, etc., are usually separate subscriptions.) It might also exclude certain tools or add-ons unless specified. | Get a written list of all services and products included in your RISE scope. If something is critical (analytics cloud, integration tools), ensure it’s explicitly included or negotiate it in. No assumptions – if it’s not in writing, it’s not included. |
| Data Export | Contracts often don’t mention how you retrieve your data if you leave. Without terms, SAP’s assistance in exporting data might be limited or at additional cost. | Add a clause guaranteeing data export support. For instance, SAP should provide a full data dump in a standard format and reasonable assistance at no extra charge when the contract ends. |
| Support SLAs | RISE comes with SAP’s standard support (often part of “SAP Enterprise/Unified Support”). The SLA for issue response and resolution might be generic. If support is poor, remedies are unclear. | Include a service performance clause – e.g. quarterly service reviews, and the ability to escalate or even get fee credits if SAP consistently misses support expectations. This holds SAP accountable for quality of service. |
Mini Checklist: Before signing, also verify these details:
- Set a clear renewal notice period in the contract (e.g. SAP must give 90 days’ notice before renewal, and the contract doesn’t auto-renew without your approval).
- Cap any price escalations for additional users or expansions during the term, not just at renewal.
- Ensure any conversion credits for your existing licenses are explicitly documented in the order form (so there’s no dispute later about the discount you were promised).
- Confirm which infrastructure provider will host your system (SAP’s own data center or a specific hyperscaler) and include that in the contract for transparency and compliance reasons.
RISE vs Traditional Licensing – When Each Makes Sense
Is RISE with SAP the right model for your organization, or would sticking with traditional licensing be better? The answer depends on your scenario.
Below is a comparison of when RISE (subscription) makes sense versus traditional perpetual licensing:
| Scenario | RISE with SAP (Subscription Model) | Traditional SAP Licensing (Perpetual + Maintenance) |
|---|---|---|
| New SAP customer (no existing licenses) | Simplified entry: Quick, turnkey start with minimal upfront cost. One subscription covers software and cloud infrastructure, making it easier to get started. | High upfront cost: Requires significant CapEx to purchase licenses and hardware. More setup effort (you or a partner must handle hosting), but you own the licenses long-term. |
| Existing ECC customer (already invested in SAP) | Potential double-pay: If not negotiated carefully, you could end up paying for RISE while your existing licenses/maintenance go unused. RISE forces a move to SAP’s cloud, trading some control for convenience. | Maximize current investments: You keep using your perpetual licenses and can host how you want. No need to give up licenses – you maintain full control over infrastructure and upgrade timing. (You can also move to cloud on your own terms, outside of RISE.) |
| Outsourcing IT infrastructure (want SAP to handle it) | All-in-one outsourcing: RISE is ideal if you want SAP to manage the infrastructure and technical operations. SAP acts as your hosting provider and basis team under the subscription. | Third-party or in-house: You either manage infrastructure internally or hire a third-party provider. More vendor management on your side, but also more flexibility to switch providers or optimize costs. |
| Heavy customization needed (complex or industry-specific processes) | Limited customization: Especially in the public cloud edition, SAP restricts modifications. Even in private cloud, certain classic customizations might be discouraged to keep the environment stable and upgradable. | Full flexibility: With on-premise or a standard hosting arrangement, you can customize SAP as much as you need. You control the software environment, which is important if your processes don’t fit the “vanilla” cloud templates. |
| Long-term cost focus (5+ year TCO) | Higher long-term TCO: In the short run, RISE’s OpEx model is predictable, but over many years the cumulative subscription fees often surpass the cost of owning licenses and infrastructure. Renewals can further increase costs. | Lower long-term TCO: After the initial investment, perpetual licenses have only annual maintenance fees (~20% of license cost). Over a 5-10 year span, this can be cheaper than paying subscriptions every year, provided you sweat the assets. |
Guidance: “RISE makes sense for greenfield (new) SAP customers; legacy ECC clients often lose more control than they gain.”
Common Pitfalls in RISE Contracts
Even savvy organizations can stumble during RISE negotiations. Watch out for these common pitfalls:
- Accepting SAP’s default FUE mix without review: SAP will propose several FUEs based on your users. Don’t just accept it. Validate the user count and roles yourself – you may find SAP’s suggested mix (e.g., ratio of Professional vs. lighter users) is higher than necessary, inflating cost.
- Failing to cap renewal pricing: If your contract doesn’t cap the increase at renewal, you could face an unwelcome surprise like a double-digit percentage jump in year 4 or 6. Always negotiate a limit on how much the price can rise later.
- Paying double maintenance during transition: Some customers sign RISE while still running ECC for a period, accidentally overlapping costs. If you are transitioning, negotiate a maintenance holiday or credit so you’re not paying SAP maintenance fees on old licenses at the same time as the RISE subscription.
- Missing data exit or reversion rights: If the contract is silent on how you exit, you’ll have little leverage later. Companies often overlook defining how they can get their data back or revert to on-prem. This can make leaving RISE difficult and expensive.
- Assuming all SAP products are covered: Don’t assume that other SAP cloud products (SuccessFactors, Ariba, Concur, etc.) automatically roll into RISE. They do not. RISE mainly covers the S/4HANA environment; other SaaS products from SAP will still require separate contracts. This can lead to a fragmented landscape if you don’t account for those additional subscriptions.
Risk Control Tip: “RISE bundles the costs SAP wants you to forget — separate each element and reprice individually.”
RISE Renewal and Exit Planning
The best time to plan your renewal or exit from RISE is well before the contract expires.
Keep these points in mind to maintain leverage and avoid being stuck:
- Start early: Begin renewal or exit planning 12–18 months before your RISE term ends. This gives you time to assess options, whether it’s negotiating a better renewal, transitioning to a different SAP model, or even considering other platforms.
- Track your usage: Throughout your RISE contract, closely monitor how many FUEs you’re actually using, and your system growth (users, data volume). If you find you’re under-utilizing what you’re paying for, that’s a key discussion point to push for lower costs at renewal. Conversely, if you’re growing, plan for how that impacts cost so you can negotiate needed headroom in advance (instead of last-minute high fees).
- Have an “Exit Playbook”: Internally, develop a plan for how you would come off RISE if needed. Identify what it would take to stand up your own environment or switch to another provider – including data migration steps, reactivating or purchasing licenses, and lining up support. Having this playbook means if negotiations go south, you have a viable fallback, and SAP knows it.
- Secure reversion rights now: If you might want to return to on-premises in the future, negotiate that right in the initial contract. For example, ensure you have the option to re-license your SAP software (perhaps by reactivating maintenance on your old licenses or purchasing licenses at a certain discount) when the RISE term ends. It’s much easier to get this agreed up front than after you’ve signed and handed SAP all the leverage.
Example Scenario – RISE Negotiation Outcome
To illustrate the impact of a strong negotiation, consider this real-world style scenario:
Scenario: A global manufacturing firm with an existing €15 million investment in SAP ECC was evaluating a move to RISE. SAP’s initial proposal was for 4,000 FUEs on a 5-year term, at about €7.8 million per year.
Actions Taken:
- The company leveraged the Cloud Extension program to trade in its ECC perpetual licenses for credits, substantially lowering the RISE subscription cost. (They ensured they weren’t paying for licenses twice by getting credit for the value of their prior investments.)
- They negotiated the contract down to a 3-year term with an option to renew, instead of being locked for 5 years. They also secured a 3% cap on annual price increases at renewal, preventing cost spikes.
- By carefully analyzing their user population, they discovered SAP’s FUE count was inflated. They remapped user roles and rights, successfully reducing the FUE baseline to ~3,200 instead of 4,000. This optimization meant paying only for what they truly needed.
Result: Over a five-year horizon, these moves saved the firm roughly €8 million compared to SAP’s initial offer. Equally important, they retained control over their destiny.
With a shorter commitment and explicit rights to exit or change course after the term, the company avoided the trap of being stuck in an unfavorable long-term deal.
Related articles
- RISE with SAP Explained: What It Includes, How It Works, and What to Watch Out For
- RISE vs Traditional SAP Licensing: Which Model Delivers More Value and Control?
- RISE Migration Considerations for Existing SAP Customers: How to Transition Without Double-Paying or Losing License Value
- RISE Contract Checklist: Critical Clauses and Terms Every SAP Customer Must Negotiate
- Negotiating a RISE with SAP Deal: How to Secure Favorable Terms and Avoid Hidden Traps
5 Steps to Negotiate a Stronger RISE Contract
- Inventory your current licenses – List all existing SAP licenses (ECC, etc.) and make sure you get credit for them in any RISE deal, so you’re not paying twice for the same software.
- Cap the increases – Negotiate a firm cap on any annual price hikes (renewals or expansions). Never agree to undefined “market rate” increases down the road.
- Lock in exit rights – Insist on contract clauses for data export support and the right to revert to on-premise (or another solution) when the term ends. Get these rights in writing from the start.
- Double-check SAP’s math – Don’t blindly trust SAP’s FUE calculations. Audit the user counts and roles independently to ensure the proposed FUE number is accurate and justified.
- Calculate the 5-year cost – Build a 5+ year TCO model for RISE vs. your other options. Understand the full cost of RISE over the contract and beyond, not just the first-year payment, before you sign.
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