RISE with SAP Negotiation
Why RISE with SAP Needs Careful Scrutiny
RISE with SAP is marketed as an all-inclusive cloud ERP bundle (software, hosting, support), promising simplicity and transformation “as a service.” Yet, beneath the one-stop convenience, CIOs and sourcing leaders must scrutinize the fine print.
The bundle’s promise often masks hidden fees and rigid terms that can lead to cost surprises after the go-live date.
SAP, as the sole vendor, will naturally position RISE as the easy path – but it’s critical to validate that claim with a healthy dose of skepticism. For an in‑depth overview of SAP negotiation topics, read our Ultimate Guide to SAP Contract Negotiations.
Dissecting the RISE Fee Components
To negotiate effectively, first unpack what you’re paying for in a RISE subscription.
Rather than accepting a single black-box price, insist on a detailed breakdown of the RISE with SAP fee components. Knowing the pieces helps you identify where value is delivered and where margins or unnecessary extras might be hidden.
Key components include:
- Core Subscription (S/4HANA Cloud + Infrastructure): This is the heart of RISE – the S/4HANA software license delivered as a service, bundled with the underlying cloud infrastructure. Essentially, you’re paying an annual fee per user or capacity unit (often measured in FUEs – Full User Equivalents) instead of buying perpetual licenses and your hardware. This core fee covers the usage of the production system on SAP’s chosen cloud (or SAP’s data centers) and basic technical management. Negotiation insight: Compare this cost to what it would be to license S/4HANA traditionally and host it yourself on a hyperscaler. Often, RISE’s infrastructure portion includes a markup for convenience. Ensure the subscription covers all necessary environments (development, test, disaster recovery) – if not, those could become hidden expenses.
- Managed Services and Support Layers: A significant selling point of RISE is that SAP handles infrastructure management, system monitoring, and standard support under a single contract. The RISE fee includes SAP’s basis administration tasks (patches, updates) and an SLA for uptime and response. However, clarify service levels and support terms in detail. What is the guaranteed uptime percentage? How fast will SAP respond to critical incidents? Are there any scheduled maintenance windows or planned downtime periods you should be aware of? While basic support is included, premium support options (such as SAP MaxAttention or enhanced response times) may incur additional costs. Make sure the included support aligns with your business needs, or negotiate for stronger terms (for example, credits if SLA targets are missed, or a named support lead for major issues). Clear support escalation paths are essential so you’re not left guessing who to call when a serious issue occurs at 2 AM.
- Add-On Modules and Credits (BTP, Analytics, etc.): RISE with SAP often bundles “bonus” components such as a starter pack of SAP Business Technology Platform (BTP) credits, access to SAP Business Network (Ariba), Signavio process analysis tools, or SAP Analytics Cloud. These extras are marketed as value-adds to sweeten the deal. Be wary: typically, only a limited usage is included. If you exceed those BTP credits or use more advanced analytics features, you’ll incur additional fees. In essence, these components can turn into a pay-as-you-go model once you pass the included threshold. During negotiations, scrutinize each add-on: will your organization use it significantly? If not, see if it can be removed for a lower price (why pay for shelfware?). If so, negotiate a cap or discount on overage fees to prevent heavy usage from blowing your budget. The goal is to avoid the scenario of “we thought it was included, until the bill arrived.”
By dissecting the RISE bundle into these parts, you gain transparency. This “RISE with SAP pricing playbook” approach enables you to evaluate whether each component is fairly priced and necessary.
It also provides leverage: any component that doesn’t add value for you becomes a point to negotiate or remove. The result is a contract where you know exactly what you’re paying for, with far fewer grey areas that could hide costs.
Leveraging Volume and Multi-Year Deals
One way to secure better pricing in a RISE deal is by smartly leveraging volume commitments and multi-year terms.
SAP’s cloud pricing is often tiered – larger commitments yield lower unit costs. And SAP loves multi-year deals for predictable revenue, often rewarding longer terms with bigger discounts.
Here’s how to play these angles:
- Unlock Tiered Volume Discounts: Don’t settle for the first quote. Ask SAP to show you the pricing at the next volume tier. For instance, if you plan for 900 users, find out what happens if you commit to 1,000 users. Often, crossing a tier can significantly drop the per-user or per-capacity price. In some cases, investing a bit more upfront (if you expect growth) can lower your total spend. Be strategic: it might make sense to slightly overcommit in volume now to secure a better discount bracket, especially if you know your user count or data volume will grow into that higher tier. Ensure any volume-based discount is reflected in the contract so you’re truly getting the benefit. This tactic turns your growth into a bargaining chip for a better rate.
- Multi-Year Commitments for Cost Predictability: RISE with SAP cost predictability improves when you lock in rates over a longer term. SAP will typically offer a more aggressive discount on a 5-year RISE contract compared to a 3-year contract. This can result in substantial savings over the term and stable budgeting, with no annual surprises. However, a longer term also increases your lock-in risk, so negotiate carefully. If you opt for a multi-year deal to receive the discount, consider building in protections (we’ll cover renewal caps next) and including a mid-term review clause. For example, some customers agree to 5 years but with an option to reassess usage or pricing after year 3, maintaining flexibility. The key is to negotiate RISE with SAP on a multi-year basis only when the incentives (price and terms) outweigh the loss of flexibility. When done right, a multi-year commitment can both lower costs and give you predictable pricing for budgeting – a win-win if you have confidence in your long-term SAP roadmap.
Negotiating Renewal Caps & Exit Flexibility
Negotiation shouldn’t stop once the initial term is set. A savvy RISE with SAP negotiation plan for the end from the beginning.
Two critical contractual elements to address are renewal price caps and exit clauses:
- Lock In Renewal Price Caps: One of the biggest risks in any subscription deal is the vendor jacking up the price at renewal time. Never assume SAP will renew at the same rate out of kindness – get it in writing. Push for a renewal cap that limits any price increase when your initial RISE term ends. This could be a specific percentage (e.g., no more than 5% increase) or tied to an inflation index at most. Better yet, try to negotiate the right to renew at the same discounted rate you initially received. SAP’s standard contracts may allow list price resets, which could erase any savings you enjoyed in the first term. Don’t leave this to “good faith.” Insist on contractual language that gives you cost predictability into the future. For example, if you negotiate a 3-year term, include a clause stating that year 4 pricing will not exceed year 3 by more than a small percentage, or, if possible, remain flat for the extension period. This way, your finance team isn’t hit with sticker shock when renewal talks come around.
- Built-in Exit and Downsizing Flexibility: Circumstances change – your business might divest a division, or you might find a portion of SAP isn’t needed down the line. Ensure the contract isn’t a one-way door. RISE with SAP exit clauses should allow a fair exit or scale-down at the end of the term (or at least without harsh penalties). Negotiate terms for what happens if you choose not to renew or need to migrate off: for example, your right to extract your data, any assistance SAP will provide for transition, and provisions for a read-only access period after contract end (so you’re not locked out of your system overnight). If possible, also negotiate the option to adjust volumes downward at renewal without incurring a penalty. Standard RISE contracts often don’t allow you to reduce user counts mid-term, but you should, at a minimum, have the freedom at renewal to recalibrate to your actual needs. Make it explicit that if you renew, you can do so for a lower number of users or resources if appropriate, using the same pricing metrics. Lastly, have an internal exit strategy from day one: even if you never use it, knowing you have a plan B (like moving to another cloud or back on-premises) gives you leverage. SAP will know you’re not completely captive, which can discourage them from overplaying their hand on pricing or terms later. In sum, negotiate so that you can exit on your terms, not just SAP’s.
Clarifying Service Levels & Support Escalation Terms
Service quality can make or break your cloud ERP experience, so don’t accept vague assurances. Demand transparent SLAs and clearly defined support terms in your RISE contract:
- Spell Out the SLA Details: Ensure the agreement clearly states the service levels – for example, uptime commitment (e.g., 99.9% availability), maximum allowable downtime, disaster recovery RPO/RTO metrics, and maintenance windows. It’s not enough that SAP “manages the system”; you need to know how performance and availability are guaranteed. Check what remedies or credits are provided if SLA targets are missed. If the standard SLA is insufficient for your operations, consider negotiating enhanced terms. For instance, if you run 24/7 global operations, a weekly maintenance window might be unacceptable – consider requesting a commitment to flexible scheduling or advanced notice of any downtime. Likewise, if an outage occurs, how quickly will SAP respond and resolve it? Set expectations for critical incident response times (e.g., a high-severity issue receives a response within 1 hour and dedicated resources until it is resolved). Having these details in writing holds SAP accountable and provides you with recourse if the service doesn’t meet expectations.
- Clarify Support Scope and Escalation Paths: RISE bundles standard support, but it’s crucial to avoid surprises from bundled support that lacks clarity. Ask who handles what in day-to-day operations. SAP will cover infrastructure and application technical issues; however, some responsibilities may still fall to your team or your implementation partner (for example, user administration, custom code maintenance, or resolving functional errors in your processes). Define how support tickets are raised and escalated – do you go through SAP for every issue, or only infrastructure/SAP software issues, while your integrator handles configuration questions? Knowing this in advance prevents finger-pointing later (“we thought SAP handled that!”). If your business requires premium support, negotiate it as part of the deal (possibly at a discount or included for the first year). Additionally, ensure there’s an escalation matrix: if a problem isn’t getting resolved, you should have the right to escalate to SAP management quickly. The bottom line is to make the support model crystal clear and robust, so you’re not left in limbo during critical incidents.
When RISE Delivers Value: Smart Use Cases
RISE with SAP can be a powerful solution – in the right scenarios. It’s not inherently bad; its value just isn’t one-size-fits-all. Being strategic means knowing when the bundled approach pays off and when to consider alternatives.
Here are a few smart use cases and counter-examples:
- One-Stop Transformation Convenience: If your organization wants to rapidly move from legacy SAP ECC to S/4HANA and doesn’t have a large IT infrastructure team, RISE’s all-in-one package can streamline the journey. For example, a company with an aging on-premise system and no cloud expertise might see RISE as a relief: SAP handles the hosting, provides the technical migration tools, and serves as a single point of contact if issues arise. In this case, the premium you might pay for RISE could be justified by avoiding the coordination of multiple vendors and accelerating the project. The bundle shines when you value simplicity and accountability over micro-optimizing each cost component.
- Maximizing SAP’s Ecosystem and Credits: RISE sometimes makes financial sense when you leverage the full breadth of what’s included. Consider a scenario where you plan to use SAP’s BTP extensively for building extensions, or you’re adopting SAP’s Business Network and other cloud services. By choosing RISE, you may receive initial credits or integrated access that would be more expensive if purchased separately. Additionally, SAP often offers incentives, such as credit for unused maintenance or favorable migration services, when you sign a RISE deal. Enterprises that take advantage of these incentives – for instance, utilizing SAP’s free advisory services or tools bundled in RISE – can offset some costs that they would otherwise incur by paying third parties. In short, when the combined SAP software + infrastructure + services in RISE align perfectly with your roadmap (and you would have paid for them separately anyway), RISE can deliver a strong value proposition.
- When Separate or Hybrid May Be Cheaper: On the other hand, if you have a well-established cloud infrastructure team or a preferred hyperscaler contract with great discounts, you might find that sourcing infrastructure directly is cheaper than SAP’s bundled offering. For example, a tech-savvy enterprise calculated that running S/4HANA on their own AWS tenancy with a third-party managed service was 20% less expensive over five years than the RISE quote – largely because they didn’t need some extras that RISE included. Standalone licensing (buying S/4HANA licenses and paying annual support) combined with a cloud-of-choice can sometimes be more cost-effective than RISE, especially if you negotiate hard on those individual elements. Also, consider your existing investments: if you’ve already purchased perpetual licenses or have a data center, sticking with an on-premises or hybrid model for a bit longer could be financially prudent while you plan a more gradual transformation. The key is to crunch the total cost of ownership both ways. RISE’s value tends to diminish in scenarios where you don’t need all of its parts or you can manage them more cost-effectively in-house.
- Complex Requirements or Customizations: Another counterexample is if your SAP environment is highly customized or you require a level of control that is not easily accommodated in a standardized cloud subscription. RISE (particularly the public cloud edition) has certain constraints on modifications and release schedules. If those don’t fit your business, you might end up paying for RISE but needing exceptions or workarounds that add cost or complexity. In such cases, a private cloud edition via RISE or even sticking to a self-managed setup might be preferable. Always evaluate whether the “one-size-fits-all” nature of RISE aligns with your needs. If not, the cost of forcing your requirements into RISE’s model might outweigh the benefits of the bundle.
In summary, RISE delivers value when its bundled approach aligns with your priorities – quick cloud transition, broad use of SAP’s cloud services, and minimal internal management.
However, if your priority is the lowest cost, maximum flexibility, or tailor-made control, consider alternative paths or a carefully negotiated RISE deal. It’s about choosing the right tool for the job and negotiating accordingly.
Negotiating SAP Contract Renewals
Six Negotiation Tactics for RISE Deals
Armed with knowledge of components, pricing structures, and use cases, you’re ready to negotiate.
Below are six concrete tactics in this RISE with SAP negotiation playbook to help you secure better terms and prevent cost surprises:
- Insist on Detailed Cost Breakdowns: Don’t accept a lump-sum quote. Require SAP to break down the RISE price by software, infrastructure, support, and any add-ons. This transparency forces them to justify each piece, helping you identify where margins might be padded. If SAP hesitates (they sometimes claim “it’s all one package”), stand firm – a clear breakdown is essential for an apples-to-apples comparison with other options. With those details, you can challenge any component that looks overpriced or unnecessary.
- Benchmark Against Modular Pricing: Treat the RISE bundle as if you could buy its parts separately (because you can). Benchmark the costs: what would it cost to license S/4HANA and run it on Azure or AWS yourself? How do other cloud ERP vendors price similar setups? Also, gather insights on what discounts other SAP customers are getting on RISE (if available through industry peers or advisors). This data arms you in negotiations – if your quote is above market norms, you can confidently push back. For example, if you know a similar company got a 40% discount on RISE, you should ask for the same or better. Comparing to modular pricing ensures you’re not overpaying for the convenience of a bundle.
- Leverage Migration Credits or Concessions: SAP is keen to win RISE business, especially if you’re moving off legacy systems. Use that to your advantage. Ask for migration incentives – this could be credits toward the subscription fee in exchange for your existing license investments, or free/discounted migration services from SAP or its partners. For instance, if you have a significant amount of sunk costs in SAP licenses and maintenance, consider whether SAP will credit some of that if you switch to RISE (they sometimes offer conversion programs). Similarly, you might negotiate for SAP to include data migration tools, training, or extra sandbox environments at no cost. The goal is to offset the one-time costs of moving to RISE. Every dollar SAP contributes to your transition is a dollar saved in your project budget, and it signals a true partnership rather than just a sales transaction.
- Tie Service Levels to Performance KPIs: Don’t be shy about holding SAP accountable for the performance of the RISE environment. If uptime, response time, or transaction speed are critical, bake specific service-level enhancements into the contract. For example, if you have retail stores and can’t afford outages during peak hours, stipulate stricter uptime during those windows. If SAP fails to meet those KPIs, define consequences – perhaps service credits or even the right to bring in additional support at SAP’s expense. While SAP may not readily agree to heavy penalties, even securing a commitment of extra resources or executive attention in the event of chronic issues can be valuable. By negotiating these terms, you transform the generic SLA into a customized one that aligns with your business, ensuring the provider is focused on your success, not just the average for all customers.
- Demand Renewal Price Protection: As discussed, a great initial discount means little if you’re hit with a huge increase later. Approach renewal terms as a first-class topic in negotiations. This could take the form of a price cap or a “straight-line” extension option. Straight-line pricing means your renewal would continue at the same rate (perhaps for a certain number of years or one renewal term) if you choose to extend. At a minimum, set a percentage cap on any increase. The aim is to eliminate uncertainty and show SAP that you won’t sign the deal without long-term cost assurance. Vendors often relent on this when pressed, because they know the customer can plan an exit – but you must ask for it. Securing renewal price protection now saves you from having to renegotiate under pressure later, when you have less leverage.
- Include Mid-Term Flexibility Clauses: Business needs aren’t static, and your contract should reflect that. Try to incorporate options that allow for scaling up or down with predictable pricing. For scaling up: negotiate the right to add additional users or capacity at the same discounted rate as your initial purchase. Without this, any mid-term expansion could be priced at the higher, undiscounted rate. Lock those unit prices in upfront for any future growth. For scaling down: while SAP might not allow reducing commitments during the term in standard contracts, you can seek at least one-time adjustment rights or a hardship clause. For example, some customers negotiate the ability to reduce users by a certain percentage in the event of a business divestiture or downturn, with a specified notice period. Even if SAP says no, at least ensure you have a painless way to downsize at renewal (no lock-in to previous volumes). The message to SAP is that you need flexibility – if they want your long-term business, they should accommodate reasonable adjustments rather than enforcing rigid one-way upsells.
Each of these tactics is designed to control the conversation and the contract.
By insisting on clarity, benchmarking, and built-in protections, you transform the negotiation from a “just sign here” approach to a thoughtful discussion on value and risk. SAP’s sales team will realize you are a well-informed customer – and that is the single best way to secure a fair RISE deal.
Read about our SAP Contract Negotiation Service.
SAP Negotiations Explained – ECC, S 4HANA, RISE with SAP, Support & Third Party Options
