RISE with SAP: Tips for license optimization in the cloud

If you are an existing ECC customer considering a migration to SAP Cloud using the RISE program, you should carefully consider a number of factors beforehand in order to get the best possible benefit. There is no doubt that RISE with SAP has significant implications that should not be overlooked.

• Completion of ECC maintenance by 2027 - 2030
• Stopped ECC innovations
• Annual increase of the maintenance fee by 5 percent.

What exactly is RISE with SAP?

RISE with SAP aims to simplify cloud migration for customers and support them individually on their way to becoming an "intelligent" company. The offering comprises more than just the migration to SAP S/4HANA, but offers five core elements: SAP S/4HANA Cloud, Business Process Intelligence (BPI), SAP Business Technology Platform (SAP BTP), access to the SAP Business Network and various integrated tools and services.

RISE with SAP works on a subscription basis with a Service Level Agreement (SLA) that bundles the components into a single package at a fixed price. SAP takes over the operation of the solution and troubleshooting.

SAP or hyperscalers such as Google Cloud, Amazon Web Services or Microsoft Azure are available to host the infrastructure. According to SAP, RISE with SAP can reduce the total cost of ownership by up to 20 percent compared to an on-site SAP S/4HANA implementation, including migration costs.

RISE with SAP, SAP S/4HANA Cloud - what's the difference?

RISE with SAP is tailored to support companies in their transition to the cloud with a wealth of innovations and solutions. SAP S/4HANA Cloud, which is available as both a public and private cloud option, is one of the cornerstones.

Although RISE with SAP offers a comprehensive cloud solution, it is not a prerequisite for using SAP's cloud offerings. Companies can access solutions such as SAP S/4HANA Cloud, Public Edition, and SAP S/4HANA Cloud, Private Edition, even without "RISE". In addition, the commercial package GROW with SAP has been available since the beginning of 2023, which is aimed in particular at new customers in the midmarket.

Companies can opt for the SAP S/4HANA Cloud Public Edition via GROW, in which the infrastructure and software functions of the cloud ERP are shared by SAP customers and managed directly by SAP.

The new FUE model - opportunity or cost trap?

Perhaps you are still familiar with the different user types for SAP S/4HANA on-prem? SAP distinguishes between six application scenarios: Developer Use, Professional Use, Functional Use and Productivity Use (as the most important use types), as well as Engine Use and Technical Use.

The new FUE model for RISE with SAP is different. With RISE with SAP S/4HANA Cloud, SAP has taken a step towards user licensing that is intended to simplify license management. Instead of purchasing an exact number of specific user license types, SAP customers can purchase so-called FUEs (Full Use Equivalents). FUEs are a fictitious number that corresponds to the theoretical number of people who are authorized to access the full functionality of the solution.

Persons with fewer authorizations are taken into account by calculating the corresponding FUE using a conversion factor:
1 FUE =
→ 1 SAP S/4HANA for Advanced Use
→ 5 SAP S/4HANA for core use
→ 30 SAP S/4HANA for self-service use

The FUE model offers the option of using user licenses for different types of use. With a RISE-with-SAP contract, the relationship between the different usage types does not need to be defined. According to SAP, it offers great flexibility, as savings can be achieved without reconfiguration rights or contract renegotiation.

The FUE model is available in different levels, depending on the number of users. Example:

1001-2000 users: 164 Euro/FUE/month (Private Edition) or 135 Euro/FUE/month (Public Edition). However, a solid analysis of the aforementioned user licenses is urgently required to avoid incurring unnecessary costs. Pricing without a contextual analysis of the assigned license types can drastically affect the final amount of FUEs purchased.

Below you will find a customer example for an SAP environment with 1000 users before and after license optimization. As you can see, 227 FUEs were saved while the number of users remained the same. In our above example of 1000 licenses, the savings achieved amounted to 30,645 euros per month (Public Edition).

SAP user licenses are a significant part of the costs associated with S/4HANA. So before you migrate to S/4HANA, be sure to carefully review your current licenses to ensure they are optimized for actual system usage.

Conclusion

Managing SAP licenses is a major challenge for many customers. Standard contracts from RISE with SAP include licensing based on authorizations instead of usage.

This has an impact on the price: entitlement-based licensing is on average 50 to 150 percent more expensive than usage-based licensing.

SAP customers can still influence the conditions and scope of the desired SAP products. It is crucial that you understand and actively manage the SAP offering. This allows you to choose the best options for you that really meet your ERP requirements and budget.

With an SAP-certified SAP software optimization solution and expertise, we can help you optimize your ECC licenses and customize your ideal S/4HANA system based on actual usage and entitlements. Don't leave the wheel to your software provider, stay in control.

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