Organizations should conduct hyperscaler evaluations directly before signing SAP RISE commitments.
Since SAP RISE came to the market, it seems that SAP’s goal is to force organizations into a relatively unproven and inflexible RISE model. To do so, they are obfuscating reality, limiting transparency, and changing their historic business practices to make RISE appear financially superior to the traditional perpetual license models.
Because of the way SAP is positioning RISE in the market, organizations must also re-evaluate their cloud strategy. In addition to determining their long-term infrastructure support strategy for SAP, organizations are also likely to be moving SAP workloads to the cloud, retiring certain applications, or determining which applications should remain on premises or in a hosted environment.
This would entail an evaluation of hyperscalers Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure, as well as the possible undertaking of a multicloud strategy, a preferred/challenger vendor model, and an approach to addressing the short- and long-term requirements of these relationships.
Organizations should engage the hyperscaler market alongside their evaluations of RISE to re-establish control, optimize negotiation leverage, and expose the gaps in SAP’s RISE marketing material. There are three primary benefits to engaging AWS, GCP, or Azure in parallel with your RISE evaluation.
When it comes to hyperscaler consumption, the infrastructure architecture — and how it leverages certain compute resources — matters immensely. This is true regardless of whether you are going directly to the hyperscaler or are receiving support through RISE. In addition, your ability to commit to certain workload levels over time can substantially change your investment profile.
With limited information of your existing environment, your S/4 migration roadmap, and architecture objectives, hyperscalers can provide recommended IaaS configurations and commitment profiles at a granular level. This detail, including the Consumption Estimate, can be leveraged by building out a perpetual model with a chosen hyperscaler to compare to SAP’s RISE proposal.
Moreover, SAP workloads are generally large and stable, and often grow over time. Many non-SAP workloads will also eventually shift to a hyperscaler after acquiring your SAP environment. Hyperscalers know this, and the discounts, investments, and credits they will provide to obtain an organization’s SAP workload commitment is considerable, including:
- Renewal protected discount increases that can apply to any existing spend
- Sizeable investment credits
- Existing relationship optimization (think Microsoft licensing or Unified Support)
It is also important to note that hyperscalers can provide immense flexibility to modify your architecture to support future needs, including the ability to drive your unit rates down over time as your consumption becomes predictable, whereas SAP costs will only increase. These aspects will be important considerations to understand when evaluating SAP’s RISE proposal.
SAP is not commercially or contractually incented to get the infrastructure sizing and assumption right. Instead, it will provide “t-shirt” sizing based on your projected Full User Equivalent (FUE) counts, leaving you hoping they got it right, but the operational and financial impacts of SAP getting it wrong fall on the customer.
It is important to require a detailed infrastructure prospective from SAP. Despite what your SAP account team tells you, they do have the ability to provide that level of detail and options to augment their standard based on your requirements.
By engaging hyperscalers in parallel, organizations can leverage those relationships to incentivize SAP into providing the appropriate transparency and validating the proposed infrastructure. This way, you can ensure SAP’s projections align to your objectives.
Whether an organization leverages a hyperscaler’s infrastructure services through a direct relationship or through SAP RISE, they are still making a commitment to their chosen hyperscaler. The only difference is the flow of money.
Given the lengths to which hyperscalers will go to earn an organization’s SAP workloads via a direct relationship, it is only fair they be given an opportunity to do the same under RISE. Organizations that complete the hyperscaler selection under a RISE model are receiving migration credits, credits, and incentives for the workloads against existing/future commitments, and discounts on their base relationship.
Because of this, organizations need to evaluate the role of the hyperscaler in supporting their migration effort as well as the associated investments hyperscalers are willing to make to support not only the SAP migration but any non-SAP migrations in order to ensure a holistic comparison between the hyperscalers and SAP RISE. Organizations who do so are more informed, make better decisions, and negotiate better commercial arrangements.
Reprinted with permission. © IDG Communications, Inc., 2023. All rights reserved.