Rise with SAP Negotiations: Key Strategies for Cost and Risk Control

Rise with SAP Negotiations

RISE with SAP is SAP’s all-in-one cloud offering bundling S/4HANA Cloud software, infrastructure, and services under a single subscription.

Negotiating a RISE with a SAP contract is critical for enterprises to contain costs and avoid vendor lock-in. Read our SAP negotiations guide.

By understanding SAP’s cloud licensing model and using strategic negotiation tactics, IT leaders can secure favorable terms that maximize value and flexibility while minimizing long-term risk.

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SAP RISE and SAP Cloud Licensing

RISE with SAP (Rise with SAP) is often described as “business transformation as a service.” It packages core ERP software (S/4HANA Cloud), cloud infrastructure (on SAP’s chosen hyperscaler, such as AWS/Azure/GCP), and managed services into a single contract.

Unlike traditional SAP licensing (where you bought perpetual licenses and paid annual maintenance while running SAP in your data center), RISE uses a subscription model.

You pay an annual fee for SAP to provide and operate the system in the cloud.

SAP assumes responsibilities such as uptime, patches, and technical support under a unified SAP cloud contract. This represents a shift from capital expenditure (owning licenses and hardware) to operational expenditure (renting the solution).

A key change is the introduction of the Full User Equivalent (FUE) licensing metric for RISE. Instead of purchasing individual user types, all users are aggregated into a single metric that determines your subscription size.

While this simplifies licensing on paper, it requires careful analysis to right-size your user counts.

In summary, RISE offers cloud convenience and faster innovation (SAP handles upgrades), but you relinquish some control and ownership compared to on-premise SAP. Understanding these trade-offs is crucial before entering negotiations.

Read SAP S/4HANA Negotiations.

Key Components of a RISE Contract and Terms to Clarify

Every RISE with SAP contract has several important components and choices that impact cost and flexibility. First is the deployment model: Public vs. Private Cloud Edition.

The Public Cloud option is multi-tenant with standard SAP processes (lower cost but less customizable).

In comparison, the Private Cloud Edition gives a dedicated system allowing more customization (at a higher cost).

Next, you choose a hyperscaler (SAP manages the infrastructure on your behalf, but you may prefer one cloud provider for data residency or integration reasons).

Contract duration is another key factor – SAP typically pushes for multi-year commitments (3, 5, or even more years).

Longer terms can bring bigger discounts, but they also lock you in for a longer period, so weigh flexibility against savings. Be sure to clarify what’s included and not included in the RISE bundle.

The subscription generally includes S/4HANA software licenses, basic cloud infrastructure, standard support, the SAP Business Technology Platform (BTP) usage credits, and a starter package for SAP Business Network.

However, implementation and migration services are not included by default – those require separate budgets or partner contracts.

Similarly, features such as additional non-production environments, advanced security or compliance add-ons, and third-party software integrations must be explicitly added.

It’s vital to define the scope upfront: if you assume something is included and it isn’t in writing, you could face unexpected costs later.

For example, ensure the contract covers any necessary sandbox or test systems, and consider a dual-use period where you can run your old system in parallel during migration without incurring additional license fees.

Finally, existing SAP customers should address how their current licenses transition to RISE. Often, SAP will credit some value of your existing licenses/maintenance toward the RISE subscription (essentially “trading in” your perpetual licenses).

Negotiate this conversion value to ensure you’re fairly compensated for past investments and avoid paying twice during the cutover.

Clearing up these terms in the contract will set a strong foundation before pricing negotiations even begin.

Read SAP Ariba Negotiations.

Cost Analysis and Pricing Considerations (RISE vs. Alternatives)

A RISE with SAP proposal must be evaluated in the context of other options – namely, staying on traditional on-premise or a self-managed cloud approach.

Enterprises should perform a multi-year Total Cost of Ownership (TCO) analysis for each scenario.

RISE costs boil down to the subscription fees over the term (e.g., an annual fee based on FUEs), plus any overage charges (for extra storage, transactions, etc.) and one-time implementation costs.

By contrast, on-premise SAP involves upfront license purchase (or depreciation of existing licenses), yearly maintenance fees, hardware and data center expenses, and internal staff or outsourcing costs for running the system.

A self-managed cloud (hosting SAP on AWS/Azure without RISE) sits in between – you would pay for cloud infrastructure and possibly SAP’s software subscription or use existing licenses, along with hiring a provider or internal team to manage the system.

Often, SAP’s RISE quote may appear higher in pure dollar terms than doing it yourself, because SAP adds a premium for the convenience and services.

For example, if your analysis finds running SAP on-prem or in your cloud would cost $1.5M per year and SAP’s RISE quote is $2M per year, you need to determine if that $500k premium is justified by the benefits (faster deployment, less internal effort, SAP assuming more risk).

In many cases, SAP will negotiate down when presented with such comparisons.

Be sure to factor in “hidden” costs: for on-premises, consider periodic, significant expenses such as hardware refreshes or major upgrades; for RISE, consider potential additional fees not included in the base quote (like exceeding BTP credit limits or integrating non-SAP systems).

Intangible benefits also play a role – under RISE, SAP carries responsibility for keeping the system running and up-to-date (which has value), and you get access to the latest cloud-only innovations.

On the other hand, vendor lock-in is a cost. After several years in RISE, switching away (back to on-premises or another provider) could mean significant effort and potentially necessitate the purchase of licenses again.

Thus, also plan for the post-contract scenario: know what it would take if you decide not to renew RISE in five years (e.g., would you have to invest in new licenses or infrastructure then?).

By quantifying all these factors, you can approach SAP’s offer with a clear target price and understanding of where the break-even lies.

Many sourcing teams even ask SAP to break down the RISE pricing into components (software, infrastructure, services) to compare against market rates.

This transparency can reveal if, say, the infrastructure portion of SAP’s price is markedly higher than if you purchased cloud resources directly – information you can use to negotiate a reduction.

In short, do your homework: an informed cost analysis is your best tool for achieving cost containment in a RISE deal.

Comparison of Deployment Options

To illustrate the differences, here is a comparison of RISE versus running SAP on-premises or in a self-managed cloud:

No one model is universally cheapest or best – the right choice depends on your business priorities and capabilities.

This comparison helps you identify what value RISE must deliver to be worthwhile and where to press SAP for concessions if their offer doesn’t stack up.

Negotiation Strategies for RISE with SAP Contracts

Negotiating an SAP RISE contract requires a proactive strategy. Enterprises should leverage market knowledge, internal requirements, and timing to drive a better deal.

Approach a RISE with SAP negotiation as you would a major outsourcing contract – come prepared and be assertive.

Here are key strategies and tactics:

• Benchmark and Question the Quote: Don’t accept SAP’s initial price at face value. Request a breakdown of the RISE quote (application software vs. infrastructure vs. services) and compare each element to market benchmarks. For instance, compare the cost of SAP’s included infrastructure to what it would cost on AWS or Azure directly. If you find the infrastructure component 20% higher than market rates, use that data to push for a price reduction. Also, research what similar companies are paying for RISE or cloud ERP; if peers secured a 40% discount off SAP’s list price, you should aim for a similar discount. Solid benchmark data gives you factual leverage to challenge inflated fees.
• Leverage Volume and Commitment: SAP’s cloud pricing often includes tiered discounts – pricing per user (FUE) drops as you commit to more users or a longer term. Exploit this to your advantage. Evaluate scenarios such as slightly increasing your user count or contract length to determine if it triggers a more favorable discount tier. For example, if SAP’s quote is for 900 users, ask what the pricing looks like at 1,000 or 1,200 FUEs – sometimes a small upsize can dramatically lower the per-unit cost. Similarly, a multi-year commitment (such as 5 years instead of 3) can result in additional upfront discounts or complimentary add-on services. Only extend the term if the savings are significant and you have protections in place. Which brings us to:
• Secure Renewal Caps and Protections: One of the biggest risks is what happens after the initial term. You must negotiate renewal terms now, when you have leverage. Insist on a cap for any price increase at renewal (e.g., no more than 5% annual increase, or locking the renewal to the same pricing you initially got). Without a cap, you could face a steep cost hike once you’re dependent on SAP’s cloud. Additionally, negotiate the right to carry over your discount percentage into future renewals. The goal is to eliminate future sticker shock and give you cost predictability. Additionally, consider incorporating a mid-term review or flexibility clause, such as a checkpoint at year 2 or 3, to re-evaluate the contract if business circumstances change. You might not get a no-penalty termination, but even the ability to adjust certain terms or get out with notice in specific scenarios is worth asking for.
• Optimize Licensing and Include Credits: Scrutinize the FUE count and user types in the proposal – ensure you’re not overestimating. Optimize your license usage before committing (e.g., eliminate unused accounts or select the optimal mix of user types, if applicable). If you’re an existing SAP customer, bring up the value of your current licenses and maintenance. Negotiate credits for the support fees you’ve already paid or for unused software (“shelfware”) you will be giving up when moving to RISE. SAP may apply these credits to offset the subscription price, but it’s up to you to make the case and ensure the contract reflects it. Also, clarify any dual usage period if needed (so you don’t pay double during transition). By optimizing and securing credits, you reduce the effective cost of RISE.
• Use Competitive Pressure and Timing: Let SAP know (truthfully) that you are considering alternatives – whether it’s staying on ECC a bit longer, moving to S/4HANA on your own in the cloud, or even evaluating other ERP vendors. This “competitive tension” signals that SAP must earn your business with a compelling offer. SAP sales teams have quarterly and annual targets; utilize them to your advantage. The end of SAP’s quarter or fiscal year is when they’re most motivated to close deals, often with extra incentives or discounts. Align your negotiation timeline to these moments if possible, but don’t reveal your internal deadlines. If SAP believes you’re willing to wait or walk away, you’ll get a better final offer. Importantly, any concessions or promises SAP makes verbally (e.g., “included at no extra charge” or “we’ll help with that migration step”) should be captured in the written contract. Verbal assurances mean nothing later – get it in writing.
• Focus on SLA and Performance Guarantees: Ensure the contract includes meaningful Service Level Agreements. SAP’s standard SLA may be acceptable for uptime, but verify if you require stronger terms. More critically, define remedies: if SAP fails to meet an SLA (such as uptime or response time), what credits or exit options are available? Push for specific service credits for outages, as well as the right to terminate if SLA breaches are chronic. This holds SAP accountable beyond just the sales promises. It also signals to SAP that you expect enterprise-grade service if you’re paying a premium.
• Plan an Exit Strategy: This might sound counterintuitive when signing a new deal, but savvy negotiators always prepare for what happens if things go south or when the term ends. Negotiate data ownership and export rights explicitly – you should be able to retrieve your data and system configurations from SAP’s cloud in a usable format if needed. Discuss options for transitioning off RISE if you choose not to renew; for example, can you convert your subscription into on-premise licenses at the end (some customers negotiate an option to buy perpetual licenses for S/4HANA at a preset price if they leave the cloud)? While SAP may not readily offer termination flexibility, raising the topic can yield compromises, such as extended support to facilitate transition or assistance with migrating to another solution. At a minimum, know how you would unwind the deal and make sure nothing in the contract prevents you from smoothly moving away. Having an exit plan paradoxically strengthens your negotiating stance for entry.

By combining these strategies, you turn the RISE negotiation from a one-sided pitch into a balanced discussion.

You aim to maximize the value of the RISE offering (cloud benefits, SAP’s accountability) while minimizing risks and costs through the use of smart contract terms.

Managing Risks and Avoiding Pitfalls in RISE Contracts

While RISE with SAP offers numerous benefits (simplification, faster innovation, and a single point of accountability), it also introduces risks that need to be mitigated.

Vendor lock-in is the primary concern – once you move critical systems into SAP’s cloud, your leverage diminishes until the contract comes up for renewal. To avoid feeling trapped, negotiate from the start with the end in mind (as noted, secure renewal caps and establish an exit strategy).

Another risk is unexpected costs or scope creep. An all-in-one deal can give a false sense of “everything is covered,” so clarify every assumption.

If you think you’ll need specific integrations, additional storage, or particular compliance features, request that they be included or at least priced now. It’s far cheaper to negotiate them up front than to add them later when you have no leverage.

Also, consider performance and support risks: ensure the SLA covers not just uptime but also support response times and key deliverables (for example, how quickly SAP will apply critical patches or how much downtime is allowed for maintenance). If your business has stringent requirements, present them clearly.

Organizational readiness is another often overlooked aspect – moving to RISE means changes in how your IT team operates (more coordination with SAP, different skill needs).

The risk is underestimating the internal effort needed to govern the SAP relationship. Mitigate that by establishing a vendor management plan and retaining some in-house expertise to monitor SAP’s performance.

Finally, don’t underestimate the risk of over-committing: signing a contract for more users or years than you end up needing. It’s safer to start conservatively with the option to grow, rather than being stuck with paying for shelfware in the cloud.

Below is a summary of major risks in RISE deals and how to handle them:

By anticipating these pitfalls and addressing them in the contract and governance plan, you transform RISE from a potential risk into a well-managed opportunity.

The goal is to enjoy the benefits of SAP’s cloud service while staying in control of your destiny.

Recommendations for IT Leaders and Sourcing Teams

To successfully navigate an SAP RISE negotiation, enterprise IT leaders and sourcing managers should take the following actions:

• Conduct a Full TCO Analysis: Before committing, model the costs for RISE over 5–10 years compared to staying on-premise or other cloud options. Include all factors (subscription fees, infrastructure, staffing, implementation) to know what you can reasonably afford and where RISE needs to be price-wise to make sense.
• Align on Key Requirements and Walk-Away Points: Internally define what you need in the contract (e.g., specific SLA levels, a maximum budget, renewal protections). Establish your “walk-away” price or terms before negotiations. This clarity enables you to negotiate confidently and avoid agreeing to terms that don’t align with your business goals.
• Leverage Benchmarks and Expertise: Utilize industry pricing intelligence and, if necessary, third-party advisors to understand typical RISE discounts and terms achieved by others. Coming to the table with benchmark data on pricing and known concessions (like average discount percentages, standard clauses other clients got) gives you credibility and leverage.
• Negotiate All Critical Terms – Not Just Price: Treat the contract holistically. Besides price, lock in the renewal cap, include any needed flexibility (such as the right to add capacity at the same rate), clarify support scope, and include any special provisions your organization requires (data location, compliance needs, etc.). Document every promise.
• Plan for Transition and Post-Contract: Develop a clear migration plan (including who will implement, timeline, and dual operations) to ensure a smooth transition to RISE and adherence to budget. Simultaneously, have an exit strategy on paper: know your options if, in 5 years, you choose to leave RISE. This could involve retaining knowledge of how to revert to on-premises or ensuring funds are available to re-license if needed. Planning this now will inform negotiations (e.g., you might negotiate an option to extend a year for transition or to purchase licenses later at a fixed cost).
• Engage SAP at the Right Time: Begin discussions early, but don’t reveal your hand too soon. Use SAP’s fiscal calendar to your advantage – for instance, aim to finalize negotiations around Q4 when SAP is eager to close deals. This can net you extra incentives. But remain prepared to pause if needed; rushing gives SAP the upper hand.
• Stay Firm and manage the Relationship: SAP sales reps will push for the fastest close at the highest price. It’s your job to slow the process down until due diligence is done. Be cordial but firm: let them know you require specific terms to establish a long-term partnership. Escalate to SAP executives if necessary to get approvals on special terms – if the deal is significant, SAP will involve management to avoid losing it.
• Document and Verify Everything: As you finalize the deal, ensure all negotiated items are written into the contract or an amendment. Do not rely on side emails or conversations. Before signing, perform a final review to ensure the contract language accurately reflects the agreed-upon terms (for example, that the “5% renewal cap” or “X free sandbox instance” is explicitly stated).

By following these recommendations, CIOs and sourcing teams can drive a RISE with SAP agreement that not only meets technical needs but also safeguards their company’s financial and strategic interests.

FAQ (Frequently Asked Questions)

Q1: What exactly is included in a “RISE with SAP” subscription?
A1: RISE with SAP includes a S/4HANA Cloud software license (in either a public or private cloud edition), the underlying cloud infrastructure (hosted on SAP’s chosen data centers/hyperscalers), and basic managed services, such as system monitoring, patching, and support. It also typically bundles some SAP Business Technology Platform (BTP) credits and a starter package for SAP’s Business Network. However, it does not automatically include implementation or data migration services, extensive training, or premium support tiers – those need to be arranged separately. Always check the contract’s exhibit for a detailed list of included components to avoid surprises.

Q2: How is RISE with SAP priced, and can we negotiate the pricing model?
A2: The pricing for RISE is usually a recurring annual subscription fee based on your usage metrics – primarily the number of Full User Equivalents (FUEs), which aggregate different user types. Essentially, you commit to a certain number of users (or capacity) for a multi-year term. The quote you receive will be an all-in price covering software and services. Yes, this price is negotiable. You can negotiate discounts on the overall fee, and you can also negotiate how that fee might increase (or not) in future years. Key levers include the volume of users (larger commitments often result in lower per-user rates), contract duration (longer terms can secure larger discounts), and timing (end-of-quarter deals may receive special pricing). It’s also possible to negotiate certain components separately – for example, ask SAP to adjust the infrastructure cost if you have evidence it’s overpriced. The bottom line is that the list price is just a starting point; savvy customers almost always secure a better rate or value-added extras through negotiation.

Q3: We already have a significant investment in SAP licenses and infrastructure – what happens to those if we move to RISE?
A3: When existing SAP customers migrate to RISE, typically your on-premise licenses for ERP are put on hold (you won’t be using them in production while on RISE). SAP often provides a credit or conversion for these licenses, as well as any unused maintenance fees, to offset the cost of your RISE subscription. It’s important to negotiate the value of this credit – you want recognition for the money you’ve already spent. Also, plan a transition period. You might need to run your legacy system in parallel with the new RISE environment for a few months during migration. To avoid double-paying, negotiate a temporary dual-use provision or a grace period. After moving to RISE, your old licenses are usually shelved (not active), but if you ever choose to leave RISE, you might need to reactivate or even re-purchase licenses (depending on how the contract is structured). Some customers negotiate an option that allows them to revert to on-premise licensing if RISE ends, without incurring a significant cost spike. This is not standard, but it’s worth discussing if you have significant sunk costs in licenses.

Q4: What are the typical discount levels or deal concessions we can expect when negotiating RISE?
A4: Discounts on RISE subscriptions can be substantial, but they vary. Many enterprises report achieving double-digit percentage discounts off the initial quote, especially for large deals. It’s not unusual to see discounts of 15-30%, and in highly competitive situations, even higher discounts may be available. SAP factors in your total deal value and how strategic your business is. Common concessions include tiered discounts (more users = lower unit cost), extra services bundled at no additional charge (e.g., additional test systems or extended BTP credits), and price locks for future purchases (so if you need more users later, you pay the same rate). You can also secure contractual protections like a cap on price increases at renewal, which, while not a “discount” upfront, is a significant value over time. If you approach negotiations with solid benchmarks and a willingness to consider alternatives, you can push SAP to close the gap between their quote and your target. Remember, SAP’s sales team has quotas and RISE adoption targets – if your business is important, they have motivation to be flexible.

Q5: How can we avoid vendor lock-in or being stuck if our needs change after signing a RISE contract?
A5: The best time to address lock-in is before signing. To keep future options open, negotiate provisions that add flexibility. For instance, consider including an exit clause or a clearly defined end-of-term process that ensures you retain rights to your data and allows sufficient time for a smooth transition. Ensure the contract allows you to export your data in a standard format. You could also request “swap rights” – the ability to reallocate part of your subscription to other SAP cloud products if your needs change. (SAP might not grant full swap rights, but asking can lead to some flexibility.) If an exit clause is a hard no, focus on a shorter contract term or a renewal opt-out notice that’s not punitive. Internally, maintain a level of technical independence by keeping copies of critical configurations and documentation. Finally, avoid over-customizing in ways that only SAP can support; stick to standard approaches so that if needed, you could run the system elsewhere later. In short, negotiating renewal and exit terms, and being mindful of how you utilize RISE, will ensure you’re not tied to SAP beyond what makes sense for your business.

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