SAP RISE vs DIY Cloud Hosting: Contractual Pros & Cons

SAP RISE vs DIY Cloud Hosting

Introduction: SAP RISE vs DIY Cloud – Why Enterprises Must Evaluate Both Paths

SAP is heavily pushing RISE with SAP, a subscription model bundling SAP S/4HANA, cloud infrastructure, and services in one contract.

Many CIOs, however, are exploring the alternative of running S/4HANA on their own cloud (e.g., AWS, Azure, or GCP) using traditional licensing.

The choice between RISE vs. DIY cloud is not just a technical migration question – it’s a strategic decision with major contractual and financial implications.

SAP touts RISE as a simplified “business transformation as a service,” but savvy IT leaders remain skeptical of the idea that RISE is the only path. It’s entirely possible to license S/4HANA on-premises (perpetual licensing) and deploy it on a hyperscaler, which can offer more control and transparency. Read our overview of SAP S/4HANA Migration Contracts & Negotiation.

Enterprises must weigh the convenience of SAP’s all-in-one cloud subscription against the flexibility of a DIY approach to protect their long-term interests and avoid unwarranted vendor lock-in.

RISE with SAP Subscription Contract: Convenience vs Lock-In

RISE with SAP is a single subscription contract that bundles S/4HANA software licenses, cloud infrastructure, and SAP’s technical services into one package.

SAP markets RISE as a convenient, cloud-first solution: one vendor, one bill, and SAP handles much of the IT workload.

The appeal is clear – you get a simplified engagement and a single SLA covering uptime and support. For companies seeking to rapidly transition to the cloud with minimal internal IT strain, RISE offers an attractive all-in-one model and a purely OPEX cost structure.

However, this convenience comes with trade-offs. Vendor lock-in is a major concern: moving to RISE often requires converting or surrendering your existing licenses and fully committing to SAP’s private cloud.

You effectively become a renter of SAP software, which makes it hard to leave without significant cost or disruption. Flexibility is also limited – you must fit into SAP’s standardized environment and timeline, rather than tailoring everything to your preferences.

There’s also a pricing transparency issue: the RISE fee is bundled, so it’s unclear how much you’re paying for infrastructure versus software. Over a multi-year period, that bundled cost (plus SAP’s margin) can end up higher than a do-it-yourself approach.

In short, RISE with SAP offers simplicity and a faster path to S/4HANA in the cloud, but at the risk of lock-in and less control over your landscape and potentially higher long-term costs.

Read about hidden costs, “Gotchas” in SAP S/4HANA Migration Deals.

DIY Cloud Hosting for S/4HANA: SAP On-Prem + Hyperscaler Contracts

In a DIY model, you use perpetual S/4HANA licenses and run the system on infrastructure you contract directly from a cloud provider (AWS, Azure, GCP).

Essentially, you bring your own license to the cloud. This means managing separate agreements: one with SAP for software and support, and another with the hyperscaler for the hosting environment.

The DIY approach offers greater control and flexibility. You decide the cloud provider, you can customize the environment freely, and you schedule upgrades on your timeline.

All costs are transparent – you pay SAP’s standard fees for licenses and maintenance, and you get a clear bill from the cloud provider for your usage. You can optimize resources or even switch providers if needed.

Importantly, you retain ownership of your S/4HANA licenses, so you’re not locked in; if you later want to change hosting strategy, you still hold the keys to your software.

However, with this control comes more responsibility.

You’ll need the right expertise (in-house or via partners) to manage and support the system effectively. There’s no single throat to choke – issues may require coordination between SAP and your cloud provider rather than one unified support call.

Upfront expenses can be higher as well: purchasing licenses and funding the migration project is a bigger initial investment than a subscription.

But over the long run, a well-run DIY deployment can reduce total cost of ownership, since you’re not paying SAP’s premium on infrastructure and services.

Cost & TCO Analysis: RISE vs DIY Cloud for S/4HANA

Evaluating the total cost of ownership (TCO) is essential when comparing RISE vs. a DIY cloud approach. RISE with SAP is a subscription (OpEx) that bundles software, infrastructure, and services into one fee – but this bundling leads to pricing transparency issues.

It can be not easy to see what you’re paying for infrastructure versus licenses or support. In contrast, a DIY cloud model separates the costs: you purchase perpetual S/4HANA licenses (CapEx) and pay the hyperscaler for infrastructure usage (OpEx). This separation gives more clarity and control over each component of cost.

Over the long term, RISE can sometimes carry a higher price tag. You’re paying SAP for the convenience of a managed service, and that premium can add up.

Meanwhile, the DIY route requires more upfront investment (buying licenses and possibly migration expenses), but it often results in lower steady-state costs.

Many enterprises find that after the initial project, running S/4HANA on their own cloud with an optimized environment can be cheaper year-over-year than SAP’s all-in subscription.

The trade-off is that the savings come with assuming more responsibility. It’s important to run a multi-year TCO analysis for your scenario – often over a 5- to 10-year horizon – to quantify the cost difference.

The table below summarizes key differences between RISE vs DIY cloud in terms of pricing, control, support, and long-term TCO:

Negotiation Implications: RISE vs DIY Cloud Contracts

When negotiating with SAP, the approach will differ for RISE vs DIY. If you consider RISE with SAP, focus on contract flexibility: negotiate a reasonable term (avoid being locked into a long deal), cap any renewal price increases, and secure clear exit clauses (for data export and transition) to mitigate lock-in risk.

Also, demand transparency around costs and solid SLAs with penalties for SAP if they miss performance targets.

For a DIY cloud strategy, negotiate on two fronts: push SAP for maximum discounts on S/4HANA licenses (since you’re opting out of their bundled RISE offering) and negotiate with your cloud provider (AWS, Azure, GCP) for a favorable infrastructure contract (discounts, flexibility, support).

In both cases, leverage your alternatives – remind SAP you have other hosting options, and remind cloud providers that you could let SAP handle it instead. This competitive tension will prompt each party to offer more favorable terms.

Read about post-optimization – After the Go-Live: Optimizing Your SAP Licenses Post-Migration

Pros and Cons of RISE vs DIY Cloud for S/4HANA

RISE with SAP – Pros:

• Simplified one-stop solution (one vendor, one contract; SAP handles infrastructure and maintenance).
• Faster deployment and upgrades (SAP handles migration and updates, so new features arrive quickly).
• Predictable OPEX costs (subscription model makes costs more consistent and avoids big upfront spend).

RISE with SAP – Cons:

• Vendor lock-in: You give up license ownership and rely on SAP’s cloud, making it hard to exit later.
• Higher long-term cost: You often pay a premium for SAP’s services and could spend more over several years compared to DIY.
• Less flexibility: Standard SAP rules and timelines apply; you can’t easily deviate or use non-SAP tools without their approval.

DIY Cloud – Pros:

• Greater control: You decide how to configure and customize the system, and when to apply upgrades.
• Flexible hosting: Freedom to choose or change cloud providers (or use multiple) to avoid dependence on one vendor.
• Transparent costs: Clear visibility into infrastructure and license expenses, and with optimization, this can lower your TCO versus RISE.
• License ownership: You retain your S/4HANA licenses, so you’re not forced into any single deployment long-term (easier to switch strategies if needed).

DIY Cloud – Cons:

• More complex, in-house responsibility: Managing multiple vendors and contracts requires strong coordination and skilled SAP technical staff on your side.
• Split support: When issues arise, you may need to coordinate between SAP and the cloud provider to resolve them, rather than getting one unified support path.
• Higher upfront cost: Buying licenses and executing a migration project requires a larger initial investment compared to subscribing via RISE.

Checklist: Key Steps in RISE vs DIY Cloud Contract Negotiation

• Perform a detailed TCO comparison of RISE subscription vs. perpetual license + hyperscaler costs (model out a 5–10 year horizon).
• Demand pricing transparency in any RISE proposal – insist on clarity about what you’re paying for software vs infrastructure.
• Negotiate dual-use and transition rights if moving to RISE – allow old and new systems to run in parallel during migration without compliance issues.
• Include clear exit clauses in the RISE contract – define data export assistance and minimal penalties if you choose not to renew.
• Benchmark software discounts in a DIY model – use SAP’s push for cloud to get better pricing on S/4HANA licenses or maintenance concessions.
• Secure flexibility with hyperscalers – negotiate your cloud provider contract for volume discounts and the ability to scale resources up or down as needed.

FAQ: SAP RISE vs DIY Cloud Licensing & Contracts

Q1: Is RISE with SAP the only option for S/4HANA?
A1: No. You can still license S/4HANA via perpetual on-premises licensing and run it on AWS, Azure, or GCP yourself as an alternative to RISE.

Q2: Do I lose existing ECC licenses if I move to RISE?
A2: Typically, yes. SAP often requires converting or sunsetting your old ECC/S/4HANA licenses in exchange for RISE credits, which means you give up those perpetual rights.

Q3: Which is cheaper, RISE or DIY cloud?
A3: DIY is often cheaper long-term (if optimized), whereas RISE’s bundled convenience comes at a premium.

Q4: Can I mix RISE and DIY hosting?
A4: Yes. Hybrid hosting is possible. Negotiate dual-use rights and integration support so both environments can coexist smoothly.

Q5: What are the biggest RISE contractual risks?
A5: Vendor lock-in is the top risk. Also, beware of opaque pricing, limited exit options or flexibility, and potential price hikes at renewal.

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