RISE with SAP Explained: What It Includes, How It Works, and What to Watch Out For

Introduction – RISE with SAP Explained

RISE with SAP is an all-in-one subscription bundle that combines SAP S/4HANA Cloud software, infrastructure hosting, and various managed services into a single offering.

It was introduced as a strategic move by SAP to accelerate customer transitions to S/4HANA Cloud and to shift its business model from traditional one-time license sales to steady, predictable subscription revenue.

In essence, RISE isn’t just a product — SAP attempts to control the full customer stack under one contract, from the application down to the cloud infrastructure. Read our overview article, RISE with SAP Contracts: Negotiation Guide & Key Considerations.

SAP launched RISE to address customer hesitations around migrating to S/4HANA. By bundling everything needed for a cloud ERP deployment – software, cloud infrastructure, database, and support – SAP pitched RISE as a way to simplify the path to the cloud.

The promise was a “business transformation as a service” model: instead of buying licenses and then finding a cloud provider and implementation partner, customers get it all in one package. SAP manages the technical operations, takes on the hosting responsibilities (either in their own data centers or on a hyperscaler of choice), and provides cloud-oriented tools to support the migration.

From SAP’s perspective, RISE ensures clients stay within the SAP ecosystem for the entire stack. It helps SAP lock in customers to a long-term subscription and cloud relationship. It also attempts to remove friction for customers by taking care of many moving parts—at least on paper.

The context around RISE’s creation includes the looming end-of-support dates for legacy ECC systems and slow adoption rates of S/4HANA. SAP needed a compelling carrot to get hesitant customers onto S/4HANA Cloud, and a simplified all-in-one cloud bundle was that answer.

However, strategic CIOs should look past the marketing. RISE with SAP indeed streamlines who you pay (one vendor, one invoice), but RISE simplifies who you pay – not what you pay for. All the components are still there, just wrapped under a single contract.

The key is understanding exactly what’s included, what isn’t, and how this model impacts your flexibility and costs over time.

What’s Included in RISE with SAP

RISE with SAP bundles a range of elements needed for an S/4HANA cloud deployment. It’s critical to know what you are actually buying with RISE, and what remains separate or extra.

Below is a breakdown of what’s included versus what typically is not included in a standard RISE with SAP deal:

Public vs. Private Edition:

RISE can be delivered with S/4HANA Cloud in two flavors. The Public Edition is a standardized, multi-tenant SaaS version of S/4HANA. It offers rapid deployment with pre-configured best practices, but allows only limited customization (you adapt your processes to SAP’s standard).

The Private Edition is essentially a single-tenant S/4HANA system (often a dedicated instance in a cloud) that is more akin to a traditional on-premise SAP system but hosted for you.

Private Edition permits more extensive modifications and custom code, supporting those who need flexibility; however, it comes at a higher cost and complexity (you’re paying for a dedicated environment). Be very clear on which edition is being offered in your RISE package, as the capabilities and constraints differ significantly.

Expert Insight: If your business needs significant customization or has unique processes, the Private Edition of RISE might be required – but at that point, ask whether RISE’s value remains or if a traditional approach might give more control.

A few additional points to clarify what you get:

• Hosting Details: The infrastructure included means you don’t separately pay AWS/Azure/GCP – SAP does, and it’s bundled. But always ask where your system will actually run. Will it be in an SAP-owned data center, or on a hyperscaler’s cloud in your region? This has implications for performance, compliance, and disaster recovery options.
• BTP Credits: The bundle typically includes a fixed amount of SAP BTP credits (platform resources) to use for extensions, integrations, or building apps. Confirm how many credits you get and what happens if you exceed them – will you pay overage, or can you adjust the amount during the term?
• Included Tools: RISE often comes with starter access to tools like SAP Signavio (Business Process Intelligence) for process analysis, and SAP Cloud ALM for monitoring. These are helpful, but might be limited versions. Know their scope so you aren’t assuming you have full enterprise editions of these tools.
• Excluded Items: Keep in mind that other popular SAP cloud products (HR, procurement, travel, etc.) are not magically rolled into RISE. You still need separate contracts for those. Also, services like actual implementation consulting, data migration execution, or advanced support (e.g. SAP Preferred Success) are not included unless explicitly added (usually at extra cost).

Checklist: Before signing, be sure to:

• Identify which S/4HANA Cloud edition you’re being quoted (Public vs. Private) – this affects cost and flexibility.
• Confirm the amount of SAP BTP credits included and whether they can be adjusted if your needs change.
• Ask where your system will be hosted and how that aligns with your data residency, latency, and compliance requirements.
• Clarify any limits (users, storage, transactions) in the RISE contract so you don’t hit unexpected ceilings.

Read how Rise with SAP is different from traditional licensing, RISE vs Traditional SAP Licensing: Which Model Delivers More Value and Control?.

How the RISE Model Works

Under RISE, instead of multiple separate agreements (one for software licenses + annual maintenance, one for a cloud hosting provider, one for a support partner), you have one contract and one subscription fee paid to SAP.

In that sense, it simplifies vendor management – there’s a single point of control. You pay SAP a recurring fee (often annual, sometimes quarterly) for a bundle of services. But understanding how that fee is calculated and structured is crucial.

The RISE subscription cost is primarily based on a metric called Full Usage Equivalents (FUEs). This is a normalized unit representing your users and their usage level.

Essentially, SAP classifies users into different types (often by roles or authorizations they need), and each type counts as a fraction of an FUE or multiple FUEs. For example:

• A heavy “Professional” user (full access to advanced functionality) might count as 1.0 FUE.
• A lighter “Core” user might count as 0.5 FUE.
• Occasional or self-service users might be 0.1–0.2 FUE each.

These ratios can vary, but the idea is to convert your mix of users into a single FUE total. You then pay a rate per FUE. SAP sets FUE pricing in tiers (the more FUEs, the lower the unit price, generally).

For instance, as a rough real-world reference, a mid-sized contract might price around $150–$200 per FUE per month. That means if you needed, say, 1000 FUEs to cover all your users, the annual cost could be on the order of $1.8–$2.4 million. (Specific pricing will depend on your deal, volume, and any discounts negotiated.)

Once you agree on an FUE count and sign the contract, that FUE allocation is locked in for the term (usually 3 to 5 years). If your user counts or roles change, you generally cannot reduce the subscription cost until renewal.

You could increase it (if you need more users or additional capacity, you’ll have to amend the contract upward), but downsizing mid-term is not part of the standard deal. This is why accurately sizing and classifying your users up front is so important – it directly drives cost.

SAP’s responsibilities in the RISE model include operating the system (installing updates, applying patches, monitoring performance, taking backups) and meeting certain Service Level Agreements (SLAs) for uptime and response.

Your internal IT shifts to more of a governance role for the SAP system rather than a day-to-day admin. RISE moves your spend from CapEx to OpEx – instead of a large upfront license purchase and data center investment, you have ongoing subscription payments.

It’s worth noting that while the billing is simplified, the components of cost are still there in the background. You’re essentially pre-paying for infrastructure, support, and licenses together.

In traditional models, you might optimize each component separately (e.g., use a cheaper cloud provider, or only pay maintenance on needed licenses); with RISE, that flexibility is ceded to SAP.

Expert Insight: “RISE simplifies who you pay — not what you pay for.” All the underlying costs (software, hardware, services) are still present, just bundled. This can mask the breakdown of costs, making it harder to tell if, for example, your infrastructure is overpriced or if you’re paying for unused licenses. Always model out the costs of RISE vs doing it yourself to ensure the premium for convenience is justified.

FUE Model Summary:

• 1 Professional user ≈ 1 FUE. Lighter users count as a fraction (e.g., 0.1–0.5 FUE) depending on their role. Make sure SAP provides the FUE weighting for each user type in your organization.
• Contract is based on a fixed FUE count. You commit to several FUEs for the term. If you overestimate, you still pay for unused capacity. If you under-estimate, you’ll pay more to add later. There’s no automatic scaling down.
• Review user roles carefully. Many companies find, after analysis, that not all “named users” need to be full FUEs. Optimizing license assignments before converting to RISE can save significant money. (E.g., if you can designate more users as self-service instead of professional, your FUE count drops.)
• All-in-One SLA. SAP provides a single SLA covering application and infrastructure. Ensure you understand this SLA and its remedies (credits for downtime, etc.), as you cannot separately hold, for example, AWS accountable – SAP is your vendor for uptime.

The Benefits – When RISE Works Well

When does RISE with SAP make sense? There are scenarios where the bundled approach can truly shine.

Key benefits include:

• One Contract, One Invoice: You deal with one vendor (SAP) for everything. This can simplify procurement and vendor management tremendously. Commercial accountability is clear – SAP can’t point fingers at your cloud provider or vice versa. For organizations without a large procurement or vendor management team, this consolidation is attractive.
• Faster Migration Path: Especially for greenfield implementations (new SAP customers or new S/4HANA projects without carrying over old customizations). SAP has pre-packaged the cloud environment, so you skip the complex step of separately setting up infrastructure and installing S/4HANA. In Public Edition, SAP delivers a ready-to-run SaaS system that can drastically cut deployment time. Even in Private Edition, RISE often includes tools and services for data migration and process analysis (like Signavio for process mining), smoothing the migration journey.
• Predictable Operational Cost: With RISE, you transition to a subscription model (OpEx) instead of a large upfront capital expenditure. You know the set fee per year (subject to any contractual escalation). This can make budgeting easier – no surprise hardware refresh costs or big upgrade projects; it’s all rolled into the subscription. For CFOs, turning ERP into a utility-like service can be appealing.
• Reduced IT Overhead: Because SAP handles infrastructure management, system upgrades, patches, and technical monitoring, your internal IT staff can focus on higher-value tasks (or you might not need as many basis admins and infrastructure specialists for SAP). For companies that struggle to attract or afford skilled SAP Basis and security experts, this offloading to SAP can ensure the system is maintained properly without stretching the internal team.
• Standardized Architecture: When SAP manages the environment, there’s more consistency in how the system is set up and secured. You get SAP’s best practices for cloud security and compliance. Things like regular backups, high-availability setup, and disaster recovery (to the extent included) are handled in a standardized way. For industries with strict compliance, having SAP’s stamp on the infrastructure and processes can simplify some audit and security concerns (though you still must ensure the RISE setup meets your specific regulatory needs).

Example: For a mid-size enterprise with minimal existing SAP footprint, RISE can provide a fast, low-friction entry into S/4HANA. They don’t need to build a data center or hire cloud architects for SAP – SAP provisions the system quickly.

The company gets modern ERP capabilities on a subscription, and if their processes are relatively standard, the lack of heavy customization in a Public Edition isn’t an issue. In this case, RISE truly accelerates time-to-value.

The Drawbacks – What SAP Doesn’t Emphasize

RISE with SAP, despite its convenience, comes with significant trade-offs. It’s crucial to weigh these drawbacks, which SAP’s sales presentations may downplay:

• High Long-Term Cost: While RISE can be cost-effective in years 1 and 2, over a longer horizon, it often costs more than traditional licensing + self-managed infrastructure. After roughly 4-5 years, the subscription fees you’ve paid may exceed what an upfront license + annual maintenance + cloud hosting would have cost. There is no asset being built; if you stop paying, you lose access to the software entirely. In contrast, with perpetual licenses, you at least owned the licenses (you could stop paying maintenance and still use the old software, albeit unsupported). With RISE, SAP essentially owns your ERP – you’re just renting it. This can become very expensive in the long run, especially if SAP raises subscription fees at renewal.
• Limited Customization (in Public Edition): RISE Public Edition is a true SaaS, meaning one SAP code line for all customers and very restricted modifications. If your business needs custom enhancements, specialized third-party add-ons, or modifications to the data model, Public Edition won’t allow most of that. Even in Private Edition, while you can do more, SAP still expects you to stay within certain guardrails to keep the environment upgradable. Some integrations might also be limited or require using SAP’s preferred methods (like going through BTP). In short, you might have to change your business to fit the software, rather than vice versa. For some companies, especially those with unique processes or industry-specific requirements, this can be a deal-breaker.
• Vendor Lock-In: RISE tightens SAP’s control over your landscape. SAP provides the software, the support, and the infrastructure together. This means if issues arise, you are heavily dependent on SAP to fix them. It also means you can’t easily move your S/4HANA system out of SAP’s provided environment – the whole stack is tied together. If you consider switching to another cloud or bringing operations in-house, you’d essentially be ripping up the entire contract. Also, switching away from RISE after a few years might mean re-buying infrastructure or even licenses if not handled carefully. This lock-in gives SAP a lot of commercial power over you throughout the contract.
• Complex Exit Terms: Following lock-in, the contracts usually have strict terms. Early termination is typically not allowed without heavy penalties. At the end of the term, if you choose not to renew RISE, you need to ensure you can get your data out and have a plan to stand up S/4HANA elsewhere (either on-prem or another cloud). Without prior planning, extracting all your data and custom objects can be non-trivial. Unless you negotiate it upfront, SAP might not include extensive data export support or long read-only access periods after contract end. You don’t want to be in a situation where your ERP shuts off before you’ve migrated to a new environment.
• Unclear Cost Transparency: One common complaint is that the bundled pricing lacks transparency. Because SAP doesn’t usually break down the cost components, you may not know how much of your fee is for infrastructure vs. software vs. services. This makes it hard to benchmark or audit efficiency. For instance, if you suspect you’re being charged for more cloud resources than you actually use, it’s difficult to prove. Or if the cost for adding 100 more users seems disproportionately high, you don’t have the per-component visibility you’d have if you negotiated licenses and cloud separately. Essentially, you have to trust SAP’s pricing – which savvy customers know can be a risky bet.

Expert Insight: “RISE is convenient — until you want to change, optimize, or leave.” The very integration that makes RISE attractive also makes it inflexible. If you later find a cheaper hosting option or want to handle support differently, you can’t break apart the bundle. You’re locked into SAP’s terms for the duration. This is why negotiating flexibility and clarity upfront is so important – once you sign, SAP has the driver’s seat.

Comparing RISE vs Traditional Licensing

It’s helpful to see how RISE with SAP stacks up against the classic model of purchasing SAP licenses and running them on your own (or with a hosting partner).

Below is a side-by-side comparison of RISE (Subscription) versus Traditional SAP (Perpetual License) approaches:

Takeaway: RISE heavily favors SAP’s control and recurring revenue model, whereas the traditional approach can favor customer flexibility and ownership.

With traditional licensing, you have more levers to pull (tweaking support, infrastructure, timing of upgrades) to optimize cost and performance. With RISE, SAP bundles those levers into a black box – convenient, but you relinquish autonomy.

Ideal vs Non-Ideal Customer Profiles

Not every SAP customer is a good fit for RISE. Based on the benefits and drawbacks, here are profiles of organizations for whom RISE is most suitable, and those for whom it could be risky or counterproductive:

RISE is suitable for:

• Greenfield implementations: New SAP customers or businesses starting fresh with S/4HANA. They can adopt standard processes and won’t be weighed down by legacy customizations. RISE gives them a quick start without historical baggage.
• Mid-size firms without a big IT footprint: Companies that don’t already have extensive data center investments or SAP infrastructure expertise. RISE delivers a turnkey solution so they don’t need to hire a large SAP Basis team or manage cloud contracts.
• Organizations prioritizing OpEx predictability over CapEx savings: If a company’s finance strategy prefers predictable monthly/annual operating costs rather than large upfront expenditures, RISE aligns well. Also, if speed and simplicity are valued over lowest possible cost, RISE’s convenience is a worthy trade-off for them.
• Companies with aggressive timelines: If the goal is to move to S/4HANA very quickly (perhaps due to an upcoming ECC support deadline or a business mandate), the pre-integrated nature of RISE can remove delays. SAP’s ready environment can shave months off a timeline compared to a DIY approach.

RISE is risky for:

• Large enterprises with complex integrations: If you have a highly integrated SAP landscape with numerous third-party systems, custom modules, or non-SAP applications, RISE’s constraints and SAP-driven update schedule might cause friction. Such companies often require tailored infrastructure and the ability to tweak environment settings, which RISE might not allow easily.
• Existing SAP customers with significant ECC investments: If you’ve already sunk costs into SAP licenses and are paying maintenance, moving to RISE could mean double-paying (subscription on top of what you paid before). Unless SAP offers credit for your existing licenses, you might be writing off a big investment. Companies in this situation need to carefully calculate the financial impact and negotiate conversions or incentives with SAP.
• Highly regulated industries or those needing full control, such as banks, defense contractors, and healthcare providers, may find RISE too inflexible due to strict regulatory or data control requirements. If you need to guarantee data residency, perform custom security audits, or maintain the ability to switch cloud providers for compliance, RISE’s closed nature can be problematic. Also, internal policies might require direct control over infrastructure that RISE doesn’t permit.
• Customers with strong IT capabilities: If your IT department is perfectly capable of managing SAP environments or you already have cost-effective cloud hosting arrangements, RISE might add needless cost. These customers might lose more in control and efficiency than they gain in convenience.

Before jumping into RISE, evaluate your profile critically.

Checklist: Key questions to ask yourself before choosing RISE:

• Do we already own a lot of SAP licenses and infrastructure? (If yes, does RISE squander that investment?)
• Do we require deep customization or specialized industry add-ons that might not fit into a standard cloud template?
• Is our IT team (or partner network) capable of managing SAP infrastructure in a cost-effective way on its own? (If yes, compare that cost to SAP’s premium.)
• How important is absolute cost minimization vs speed and simplicity for our strategy?

Your answers to these questions can indicate whether RISE aligns with your situation. RISE is not one-size-fits-all, despite how it’s marketed.

Governance and Contracting Implications

Adopting RISE with SAP shifts many responsibilities to SAP, but it doesn’t eliminate the need for strong governance – in fact, it requires a different kind of oversight.

Contractually, RISE agreements tend to be multi-year (3 to 5-year commitments are standard) and fairly rigid. Here are some implications to watch:

• Long-Term Commitment: You are locking into SAP as a service provider for the duration. Ensure the contract has clear provisions for things like price increases at renewal (negotiate caps on annual increases or renewal rates), and transparency on how costs might change if your usage grows. For example, if you add 500 users in year 2, is there a predefined rate or do you have to renegotiate mid-stream? Avoid open-ended terms that let SAP hand you a surprise bill.
• Infrastructure Portability: When SAP manages the cloud resources, you typically cannot move your workloads freely. If halfway through you decide you’d rather be on Azure than AWS, you don’t have the direct ability to do that – it’s all under SAP’s umbrella. At best, you might request a change at renewal. This lack of portability means you should be comfortable with the proposed hosting environment for the long haul. Also, consider disaster recovery and multi-region needs up front, as you can’t decide later to implement your own secondary site without going through SAP.
• Vendor Governance: With SAP running your core systems, your relationship with SAP enters a new level of dependency. You must hold SAP accountable via the SLAs in the contract. Monitor their performance and don’t assume they’ll always meet the targets – have provisions for service credits or even the right to terminate if SLAs are consistently missed. It’s wise to assign a vendor manager or governance team on your side to oversee the RISE service delivery. Regular service reviews with SAP should be in your plan.
• Data and Access Rights: Ensure the contract spells out your rights to access your data and systems. For instance, will you have any read-only access to the database or OS level in a private edition? (Often not much.) More importantly, plan for exit from day one. Negotiate assistance for data export and migration at the end of the term. You may want clauses that SAP will provide a full data dump or continue read-only access for a few months after termination so that you can transition off without business interruption. Also, clarify who owns any custom developments or configurations if you exit.
• Security and Compliance: Verify how SAP’s responsibilities are documented for security patches, user administration, and compliance requirements. You may need certain audits (SOC reports, etc.) from SAP regularly. Also, clarify roles in the Roles and Responsibilities Matrix (SAP provides this to outline what SAP does vs what you do in RISE). Anything marked “optional” or “customer responsibility” needs your attention – if you assume SAP handles it but the contract says otherwise, that’s a gap.
• Negotiation Tip: Even if RISE simplifies delivery, your contract should complicate SAP’s ability to overcharge you later. In other words, negotiate protective terms: caps on price increases, flexibility to drop unused services at renewal, clear termination assistance, etc. Make SAP earn that long-term commitment by providing contractual safeguards and transparency.

Example Scenario

To illustrate the financial dynamics of RISE, consider this scenario:

A global manufacturer is evaluating RISE with SAP (Private Edition) for a planned S/4HANA migration. They have about 5,000 total employees who would use the system in varying capacities.

SAP’s initial proposal prices the RISE subscription based on 4,500 FUEs and a 3-year term, with the system to be hosted on AWS. This proposal assumes a large number of professional users and uses SAP’s standard FUE ratios. The quoted cost comes out to, say, $X million per year.

The customer’s IT and procurement team doesn’t accept this at face value. They perform an internal analysis and discover that only about 3,600 of those users are truly active daily users.

Many roles can be classified as lighter (e.g., shop floor workers who just issue materials or managers who approve timesheets might be better classified as 0.2 FUE each, not full 1.0 FUE). They work with SAP to remap user types and eliminate unnecessary licenses from the count. Through this effort, they reduced the FUE count from 4,500 to 3,700. SAP updates the proposal, and because of volume tiering, the per-FUE price also improves slightly at the new count.

Result: The overall deal size drops by roughly 18% from the initial quote. Over the 3-year term, this translates to substantial savings (potentially millions of dollars).

Lesson: RISE cost depends entirely on how accurately you define your usage mix. If you blindly accept SAP’s sizing, you might be over-allocating and over-paying.

Diligent analysis of user roles and usage can significantly optimize the cost. In this scenario, the manufacturer also learned to negotiate for flexibility by including a clause to adjust FUE counts if actual usage was lower in the first year, giving them an out if SAP’s assumptions proved too high.

Similar scenarios are playing out with many companies: those who treat RISE as a one-size-fits-all offering often miss opportunities to tailor it to their advantage.

The key is to approach RISE with the same rigor you would any major SAP project – with due diligence, negotiation of terms, and a clear understanding of your own requirements.

5 Executive Takeaways Before Choosing RISE

1. RISE simplifies billing, not cost control. Don’t be lulled by the single invoice – you must still manage and optimize what you’re paying for behind the scenes. Convenience can come at a premium.
2. You give up flexibility for managed convenience. By handing SAP the keys to your infrastructure and licenses, you trade away some control. Make sure the trade-off is worth it for your business.
3. Always verify the FUE calculation independently. The user counts and types drive your costs – double-check SAP’s math and challenge the assumptions to avoid over-paying for unused capacity.
4. Negotiate data export and renewal terms upfront. Plan your exit strategy at the start. Ensure you can get your data out and avoid being hostage to unchecked price hikes when it’s time to renew.
5. RISE works best for greenfield cases – not legacy-heavy estates. If you’re a long-time SAP customer with a complex environment, be extra cautious. RISE is ideal for a clean slate, but for heavily customized or already invested landscapes, it may introduce more issues than it solves.

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fredrik.filipsson

Fredrik Filipsson is the co-founder of Redress Compliance, a leading independent advisory firm specializing in Oracle, Microsoft, SAP, IBM, and Salesforce licensing. With over 20 years of experience in software licensing and contract negotiations, Fredrik has helped hundreds of organizations—including numerous Fortune 500 companies—optimize costs, avoid compliance risks, and secure favorable terms with major software vendors. Fredrik built his expertise over two decades working directly for IBM, SAP, and Oracle, where he gained in-depth knowledge of their licensing programs and sales practices. For the past 11 years, he has worked as a consultant, advising global enterprises on complex licensing challenges and large-scale contract negotiations.

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