SAP S/4HANA Cloud (Private Edition) RISE – FAQ
Executive Summary:
SAP’s “RISE with SAP” private cloud edition is a subscription-based ERP offering that bundles S/4HANA Cloud with hosting, support, and tools.
It enables enterprises to migrate existing SAP workloads to a dedicated cloud environment, preserving customizations and shifting costs from CapEx to OpEx.
CIOs should understand the licensing model (full-use equivalents), pricing structure, contract terms, and risks (lock-in, upgrade cadence) to make informed decisions.
Overview and Licensing
- What is SAP S/4HANA Cloud, Private Edition (RISE)? It is SAP’s single-tenant cloud ERP service. RISE with SAP provides S/4HANA Cloud (private edition) – a dedicated instance – together with business process intelligence and platform services. SAP manages the infrastructure and SLA (99.7% availability), while customers retain existing custom code and configurations.
- How does RISE differ from traditional SAP licensing? Unlike perpetual on-prem licenses (one-time CapEx plus ~22% annual maintenance), RISE is a subscription (OpEx) model. You pay recurring fees that cover the software license, database, hosting, and support. At contract end, you don’t own the software; rights expire if you stop paying.
- How is the RISE license measured? RISE uses Full-Use Equivalents (FUE). SAP converts different user types into a single FUE count for billing. You commit to a certain FUE level (roughly proportional to usage), and SAP checks that your usage stays within contracted limits.
- What does the RISE subscription include? The package includes the S/4HANA software (with HANA DB), standard support, annual upgrades, and managed cloud infrastructure. It also typically includes some SAP Business Technology Platform (BTP) credits and network tools. For example, SAP’s partner AAKIT notes that a Business Network Starter Pack (e.g., Ariba Network) and SAP Analytics credits are often bundled. However, major applications like SuccessFactors or Ariba require separate subscriptions.
Deployment and Infrastructure
- Which cloud providers support RISE? You can deploy RISE on major hyperscalers (AWS, Azure, Google Cloud) or even SAP’s own cloud data centers. SAP sets up and manages your ERP in your chosen cloud. You supply the account or subscription; SAP handles the SAP-specific AWS/Azure/GCP resources behind the scenes.
- Can we run RISE in our own data center? Yes – SAP offers a “tailored data center” or on-prem hosting option. This lets you deploy S/4HANA Cloud (Private) on your own infrastructure while SAP manages it, effectively mimicking a dedicated cloud environment. It provides a way to leverage existing data-center investments under the RISE subscription.
- Are hybrid SAP landscapes feasible? Yes, some companies mix on-prem and RISE. For example, they may run the central S/4 system on-prem and roll out RISE for subsidiaries. It’s technically possible, but it adds complexity (dual contracts, integration). SAP can bundle hybrid deals with discounts, but you will have to manage two environments and ensure data consistency across them. Hybrid setups should be planned carefully to avoid duplicating effort.
Read RISE with SAP Strategies and Alternatives.
Migration and Customization
- How do we migrate from on-prem SAP to RISE? SAP provides migration tools and programs (e.g., “RISE Transition”) for existing SAP customers. You would typically convert ECC/S/4 on-prem to S/4HANA Cloud (Private) via database restore or content conversion. SAP often grants dual-use rights (you keep using your current system while moving to the cloud) and may offer cloud credits for existing licenses. A phased approach (lift-and-shift then optimize) is common.
- Does RISE include other SAP products (Ariba, SuccessFactors)? No, RISE focuses on the core ERP bundle. It includes S/4HANA Cloud (Private) plus some platform services, but each cloud application (Ariba, Concur, SuccessFactors, etc.) remains a separate subscription. SAP may negotiate combined quotes, but by default, you’ll need individual contracts for those products.
- Are existing customizations and add-ons supported? The private cloud edition supports ABAP custom code and most on-prem features, unlike the public multi-tenant edition. You can bring legacy extensions and industry solutions. However, SAP encourages using in-app extensibility (via BTP) for new developments because heavy custom modifications can complicate upgrades, redresscompliance.com. In practice, on-prem customers usually can keep critical customizations when moving to RISE, but should audit and document them first.
- What incentives or credits are available for migration? SAP often offers transformation incentives to existing ERP customers. These may include dual-licensing cloud credits (so you get ERP cloud use rights without new license fees) and fixed discounts on future SaaS solutions. Government and partner programs (e.g., SAP consulting packages) may add more credits. Always ask your SAP rep about available credits and promotions during negotiation.
Pricing and Contracts
- How is RISE priced? Pricing is typically a monthly fee per FUE plus related services. SAP provides tiered pricing: higher FUE volumes get a lower per-unit rate. For example, one analysis notes a professional user might cost $150–$250 per month on average in cloud deals. A public SAP price list (UK G-Cloud) shows 1–135 FUE at £848/month per FUE, dropping steeply with volume. (See Table 1 for sample GBP rates.)
| FUE Range | Price per FUE (GBP/mo) |
|---|---|
| 1–135 | £848 |
| 551–1000 | £256 |
| 12001–25000 | £44 |
| 25001+ | £32 |
- What might a typical contract cost? It varies by size. As an example from an SAP advisory, 200 FUE (mixed user types) at $150/month each would be about $360,000/year. In GBP, 500 FUE in the above pricing table (middle tier at £256) would be £128,000/month (£1.5M/year). These numbers include software, infrastructure, and support. Compare to on-prem: a perpetual deal that costs e.g. $5M + 22% maintenance ($1.1M/yr) might amortize similarly over time, but RISE shifts costs to monthly/annual OpEx instead.
- Are there hidden costs or extra fees? Be aware of add-ons. Standard subscription covers baseline support and hosting, but extra services cost extra. Examples include: extended support levels (premium support), additional BTP or analytics beyond included credits, data egress/network fees, backup/DR services if out of scope, or partner implementation fees. SAP will not charge separately for security patches or DB licenses in the bundle, but double-check networking (cloud traffic) costs. Also, third-party apps or custom integration work are your expense.
- Can we reduce FUE commitments mid-contract? Generally no. RISE contracts lock in the agreed FUE count for the term. If usage drops, you still pay the full commitment. Some contracts allow only increases (you can add users if needed) and disallow decreases until renewal. To retain flexibility, negotiate minimums or true-down clauses upfront.
- What contract terms and renewal conditions apply? RISE deals typically run 3–5 years. These are fixed terms – early exit usually means paying the remaining term or heavy penalties. At renewal, SAP often increases prices; many customers negotiate a cap (e.g. ≤5%) on any price hike. Renewal is also when you can reprice usage, adjust FUE counts, or renegotiate service levels. Start planning renewal at least one year ahead (review actual usage and ROI) and lock in escalation limits if possible.
- How are support, maintenance, and upgrades handled? In RISE, technical operations shift to SAP. The subscription includes basic support and continuous upgrades. SAP applies patches and delivers major S/4HANA releases (typically quarterly or annually). You still perform business testing, but SAP handles system tuning and uptime. Service Level Agreements for availability are standard. No separate maintenance bill appears – it’s bundled into the recurring fee.
Risks and Considerations
- What are the main risks of moving to RISE? Key considerations include vendor lock-in and cost over time. You don’t own licenses, so you’re committed to paying for the entire contract term. If SAP changes strategy or support dries up, you can’t simply walk away without cost. The mandatory upgrade schedule also means changes are forced on your timeline – this can strain testing resources. Regarding cost, SAP claims RISE can deliver ~20% lower 5-year TCO (by avoiding capital spend), but after 5–7 years, pure subscription costs may exceed a once-bought on-prem license (which you could then run maintenance-free). CIOs should model both 5-year and 10-year scenarios to judge total cost.
- How does audit/compliance change under RISE? RISE simplifies audits. You don’t need to track dozens of named-user licenses. Instead, SAP enforces your FUE commitment. In practice, SAP may monitor usage (e.g., number of logins or transactions) to ensure you’re within limits. If you exceed, you’ll buy more.In contrast, on-prem licensing can trigger formal license audits requiring proof of compliance. Under RISE, as long as you stay within contracted FUE, audit risk is minimal. However, don’t invite extra users beyond your limit (SAP will bill for any overage, typically at list rates).
- Will performance be adequate globally? Generally, yes, if architected correctly. RISE runs on hyperscaler data centers with robust hardware. Latency depends on the network: choose a cloud region near your user base. SAP allows selecting the data center region to optimize performance. For truly latency-sensitive tasks (e.g., factory control loops), consider local edge processing or data caching. But for core ERP functions, customers typically see performance on par with or better than on-prem (since SAP ensures high-capacity servers and tuning). Just factor in network planning: multiple SAP data centers can be used for global teams if needed, and SAP provides guidance on connectivity architectures to meet SLAs.
Recommendations
- Assess long-term TCO: Model both a 5-year and 10-year total cost, comparing RISE (subscription) versus on-prem (license + 22% maintenance). SAP often claims 5-year savings, but costs accrue continuously after that.
- Negotiate firm price escalations: Before signing, get renewal price caps in writing (e.g., ≤3–5% annual increase). Without this, SAP can raise rates aggressively at renewal.
- Use actual usage data: Track your real user/activity levels now. Commit FUE conservatively (don’t overbuy) and be ready to upsell rather than be forced into re-buys. This ensures you only pay for what you need.
- Plan for transition costs: Budget for initial implementation (consulting, integration) and network upgrades (especially if migrating from slow links). Account for potential data egress fees if moving large historical datasets to the cloud.
- Engage migration incentives: Leverage SAP’s transformation credits. Confirm dual-use rights (keep running on-prem while moving to cloud) and explore government or partner incentives to offset costs.
- Lock in technical requirements: Specify in the contract the allowed custom code support and upgrade schedules. For example, negotiate clauses about BTP credits or custom report support so you don’t discover limitations mid-term.
- Ensure security/compliance: Clarify the shared responsibility model. While SAP secures the platform, you’re still responsible for data governance and user management. Review any compliance certificates (e.g., ISO, GDPR) that SAP provides.
- Review exit options: Include terms on what happens at contract end or termination, e.g., data export formats, options to convert subscription to a perpetual license, and any notice periods. Knowing exit rights upfront avoids surprises.
Read about our Rise with SAP Advisory Service.
🎥 How SAP Licensing Experts Help with RISE with SAP Strategy | SAP RISE Negotiation, TCO
