Currently, "RISE with SAP" is at the top of SAP headlines. The solution was developed to boost cloud adoption among both existing as well as new customers, and to centralize SAP applications. To that end, SAP is now offering a new attractive licensing and contract model.
This new product has also not escaped our attention at VOQUZ Labs AG, but we are primarily interested in the solution’s licensing model, which they promise will significantly reduce costs. An event organized by DSAG on the new solution confirmed that this topic is also of high interest for potential customers.
24% of participants claimed that:
"The coolest thing about RISE with SAP is...."
"...its licensing and pricing model";
this response received the second highest number of votes in the survey.
By the way, the top response to this question (27%) was:
"...nothing in particular. I’m not convinced yet".
Unlike "Digital Access", however, "RISE with SAP" already seems a hot topic. But let's take a closer look at this solution and all its ins and outs. What drove SAP to develop it? It’s indisputable that SAP's overall cloud strategy has not yet really taken off; other cloud providers continue to have the leading edge. "RISE with SAP" is poised to make a significant breakthrough.
Accordingly, SAP has also introduced an entirely new licensing model. The licensing is no longer based on user licenses such as Professional, Worker or Employee but on so-calledFUEs (Full Usage Equivalents). Users will, of course, remain users and the four possible user types "Advanced", "Core", "Self-Service" and "Developer" will continue to be defined by their activities.
By the way, just like we did for the different types of S/4HANA licenses, we have created the corresponding templates for samQ, our automatic license optimization software, to make it easier to determine how many RISE licenses would be necessary in your current on-premise landscape, provided that none of the processes is modified.
What matters in FUEs is ratios. "Advanced" is one full FUE, "Core" refers to 1:5 FUEs and "Self-Service" to 1:30 FUEs. In other words, one FUEin a company equals up to 30 Self-Service users. Such offers may sound particularly tempting for companies engaged in product selling, the provision of technical services or maintenance, because a "Self-Service" user is assigned authorizations in production and maintenance, and thus covers the entire production process with the exception of production or maintenance management, which is reserved for "Core" users. Companies in the finance sector are not as lucky. They will need “Advanced” users, which can become quite expensive in the long run.
We have compared two such companies with the same number of users. In the first three years, the RISE with SAP licensing model is still cheaper in both cases than S/4HANA on-premise licensing. By the fourth year, however, the licensing cost seven out; for companies in the finance sector, the costs are even higher already, and when comparing the costs over a 10-year period, the RISE with SAP licensing model becomes really unattractive.
While"Advanced" is similar to the current "Professional", "Core" and "Self-Service" have limited functions. They can roughly be compared with the S/4HANA licenses "Functionality" and"Productivity", but their function descriptions differ in certain respects. We have considered these differences in our templates. In case you would like to carry out a preliminary analysis of your on-premise landscape, we offer customized packages for all company sizes, irrespective of sector.
The difference now is that FUE licenses will be required, but these can be implemented flexibly. In the past, specific license types were purchased and used indefinitely for their specific purpose; there was virtually no possibility for return or exchange. FUEs will make all of this easier. If I need fewer "Advanced" users, I can use the corresponding number of FUEs for other license types, such as"Core" or "Developer" users, without having to purchase more licenses as long as the required number of FUEs is available. This allows for some flexibility. Furthermore, the reference period is "per month". At the end of the contractual license period (usually after 3 years), the contract can be renegotiated, and the total number of licenses can therefore be reduced. After all, job losses due to automation are quite common in today’s business environment. Another advantage of RISE with SAP and moving to the cloud means that companies no longer need their own hardware. SAP will run the operations.
What else does RISE with SAP offer apart from FUEs, and is it truly a transformation towards cloud process optimization?
RISE with SAP is a combination of the already existing SAP S/4HANA Cloud and a few additional components. The main component still is the SAP S/4HANA Cloud – the private or public option – and includes SAP licenses and support, infrastructure and infrastructure services in a single contract.
So what is the difference between this new solution and S/4HANA Cloud, which SAP has been offering in recent years?
COMPONENTS INCLUDED IN RISE WITH SAP:
1 - SAP S/4HANA CLOUD, Private Cloud or Public Cloud Edition
It is now called "RISE with SAP S/4HANA, Private (or Public) Cloud edition" and includes some additional components at the same cost as SAP S/4HANA, Private (or Public) Cloud. Minimum purchase of 40 Full User Equivalents (FUE) for Private Cloud and 35 for Public Cloud.
2 - Business Process Intelligence Reports
A free, one-time online process discovery report and several customized recommendations.
3 - Business Technology Platform Starter Pack
Also known as Cloud Platform Enterprise Agreement Credits for Public or Private Cloud.
4 - Business Network Starter Packs
Ariba Network including 2,000 documents.
Asset Intelligence Network (200 devices, two connections, and ten partner portal invitations).
LogisticsBusiness Network (1,000 documents and two service providers).
5 - Business Intelligence Tools & Services
A S/4HANAReadiness Check and a S/4HANA Customer Code Migration App.
A learning hub access can also be purchased, but it’s only an optional feature of the offer.
This might be interesting for some potential customers, but may also be useful for existing SAP customers.
RISE WITH SAP IS STILL SAP S/4HANA CLOUD WITH A NEW NAME AND A FEW FREEBIES
Together with SAP S/4HANA Cloud, we now receive a few freebies that support the implementation or migration to SAP's cloud software. In addition, we receive several starter packages to learn how to use Ariba, the Asset Intelligence Network and the Logistics Business Network. Unfortunately, they will probably not sufficiently address all your needs (see listed metrics)but will at least help you find a starting point in these business areas.
What about the other components that are included?
• A ReadinessCheck (S/4HANA readiness or compatibility with the customer’s current ECC)
• A CustomerCode Migration App
• A BusinessIntelligence Discovery Report
It’s difficult for us to accurately assess their financial value. It would be helpful to compare these services with offers that are available from SAP implementation partners who provide comparable products, and to form your own opinion.
We have a clear-cut opinion about the starter packages "Business Technology Platform" and "SAPBusiness Network". When comparing their list price with the annual cost of a 1,000-user SAP S/4HANA private cloud subscription, we find that the costs are less than 5% of the annual S/4HANA subscription price.
CONCLUSIONS
Will RISE with SAP pique your interest in SAP´sS/4HANA Cloud? We doubt it. The motivation to purchase a S/4HANA Cloud license won’t be driven by, say, a 10% discount, give or take, on the license price (excluding the costs for implementation).
Instead, it will much more be driven by your strategic decisions about business-critical applications and the ability of S/4HANA Cloud functionality to meet your business needs and provide sufficient ROI to justify such a move.
The questions that need to be answered thus remain the same: SAP ECC or SAP S/4HANA? On-premise or subscription? Cloud or on-premise?
SAP-managed infrastructure or hyperscaler-managed?
We at VOQUZ Labs can help you find answers to all these questions and will offer you a detailed financial licensing model to determine the best way forward. So are we ready for the wonderful new world of cloud applications?
SAP wants technical harmonization... to unify an infinite number of releases in the current world into one basic landscape.
This saves an enormous amount of money. Yet customers face other problems. They want to see a reasonable mapping of their processes, usually in a very individualistic way, something RISE does not really seem to currently offer.
RISE with SAP is no true transformation into cloud processes, but rather old wine in new bottles.
Another missed opportunity to substantively address business processes and to transform them into cloud technology to create real added value in the cloud.
Instead, it’s just getting more expensive, as usual.
What a pity!
Peter Rattey is the founder of VOQUZ Labs. He invented samQ and is still intensively involved in samQ's further development. Peter is one of our most experienced advisors.
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