Updated: Aug 23, 2021
“RISE with SAP” is the catchphrase that SAP sales reps are using to help customers “transform their businesses”. This is really SAP’s way of saying “Let us handle your move from a legacy ECC environment or S/4 on prem to S/4HANA cloud, handle your cloud hosting needs, and provide all the services required to maintain and manage your business.”
In other words, RISE ensures that SAP would be involved with many aspects of your IT management, including:
Cloud Hosting (Azure or AWS within an SAP contract)
Maintenance and management of cloud services
SAP asserts that RISE has everything you need in one neat bundle to deliver digital transformation, though we have yet to see this play out. Nor can we make heads or tails of the program’s pricing: there is no documentation that supports or explains any of the RISE line-item costs.
Therefore, we suggest that going “all in” with RISE could spell disaster for customers down the road. Pricing transparency and “opt-out” contract language – at the very least -- is vital should a customer chose to pursue this offering.
This RISE push is reminiscent of SAP’s Hana Enterprise Cloudpush. SAP evidently had no idea what it was doing then, and eventually realized that it could not compete with the cloud giants (Google, Amazon, Microsoft). However, SAP sales reps do not let customers get out of any agreement easily: you have to replace whatever annual revenue you’ve committed to SAP if you expect to see any flexibility from the vendor.
In a recent engagement, we observed SAP pushing RISE on a client who was interested in the bundled model. It aligned with their strategic IT goals, but the lack of flexibility and pricing transparency made them hesitant. They also wanted to leverage existing cloud hosting provider relationships without SAP in the middle. For some, being an early adopter with SAP brings back bad memories.
The bottom line: we counsel clients strongly against putting all their eggs in one basket. It is simply too risky. In fact, on July 6, the Pentagon scrapped its deal with Microsoft for this very reason and announced that “a single-vendor strategy is not the industry standard and does not make sense for mammoth cloud computing projects like this one.”
We urge clients to approach SAP’s RISE program with extreme caution. The RISE proposals we’ve examined are dictated and controlled by the vendor, are heavy on new fees, and light on details. These deals could severely hamper your future leverage and compromise your business’ flexibility. If or when you are approached with a RISE proposal, we recommend that you contact ClearEdge to discuss the ramifications with SAP pricing and negotiation experts.
- Brady Carlson and Danilo Milevsky are Senior Analysts at ClearEdge Partners.