Avoiding Vendor Lock-In with SAP RISE

Avoiding Vendor Lock-In with SAP RISE

SAP’s RISE with SAP offers a multi-year subscription that bundles S/4HANA Cloud, SAP BTP, underlying infrastructure, and managed services.

While RISE promises streamlined transformation, it also raises lock-in risks. Surrendering perpetual licenses, committing to a single cloud provider through SAP, and bundling services can trap organizations if business needs change.

Sourcing and IT leaders must negotiate proactively to preserve flexibility. This advisory outlines contractual and technical strategies to avoid long-term dependency.

The goal is to ensure you can exit or migrate if needed, keep control of data, and interoperate with other systems. Involve independent SAP licensing and cloud experts (for example, Redress Compliance) early in negotiations to advocate for fair terms.

Understand the Lock-In Risks

• Subscription vs. Ownership: Under RISE, you become a “renter,” giving up perpetual software rights. SAP can raise subscription fees after the initial term. Neglecting renewal caps or exit rights turns you into a captive customer.
• Bundled Contract: RISE ties software, cloud hosting, and support into one agreement. Exiting any component may trigger heavy penalties. (One analysis warns that mid‑term exit is “very difficult” and customers should expect to honor the full 3–5 year term.) Without careful wording, you lose leverage on price and service.
• Single Hyperscaler Relationship: Although you select AWS/Azure/GCP/etc, the contract is with SAP. You have no direct cloud agreement. Any service issues or required changes in the cloud stack must flow through SAP.
• Custom Code & Configuration: Your ABAP developments and BTP extensions could be locked into SAP formats. Clean‑core mandates may force you to rework custom functionality to apply updates. Migration becomes much harder if you cannot extract or run code outside SAP.
• Hidden Licensing Traps: Digital Access (indirect use) is not automatically covered. Interfaces or automations that generate SAP documents can incur extra licenses. Likewise, BTP or other add‑ons often involve separate consumption fees. These complexities emphasize the need for clarity up front.

Understanding these risks sets the stage: negotiate for contractual protections and technical controls that preserve options.

Negotiate Clear Exit and Termination Clauses

• Termination Rights: Seek an express exit clause. For example, negotiate a right to terminate for convenience with minimal penalty, or “exit triggers” such as repeated SLA failures, regulatory changes, or mergers. Spell out notice periods and fees. Avoid vague language: require that penalties be capped or waived under certain conditions.
• Transition Assistance: Include post‑termination support. For instance, if you exit, SAP may require you to provide a transition plan or data migration services. The contract should obligate SAP to deliver a full copy of your data in standard formats (e.g., CSV/SQL dump) within a defined timeframe. You might even negotiate a short “read-only” extension of the ERP system after the contract ends to avoid downtime.
• Renewal Protections: Cap annual price increases (e.g., tie increases to inflation or a fixed maximum) and lock in any volume discounts for expansions. Ensure any security or performance shortfalls at renewal allow renegotiation. For example, include a clause that requires SAP to give advance notice of new pricing (e.g., 6 months) and allows you to decline renewal if terms become unreasonable.
• Dual‑Use Period: Negotiate an overlapping period if transitioning from on-prem or older cloud licenses. For example, SAP could let you run legacy systems in parallel (“dual‑use”) during the RISE go‑live without double billing. This protects your sunk costs and gives breathing room on cut‑over.
• Retain License Assets: If feasible, postpone converting all perpetual licenses. Even if SAP offers credits for old licenses, you might retain a small perpetual backup or maintenance license as insurance. In any case, include a right to purchase equivalent perpetual rights at the end of the contract.

Actionable example: Insert contract language such as: “Upon termination or non-renewal, SAP shall deliver to Customer, at no additional charge, a complete extract of all customer-owned data in non-proprietary formats (e.g., CSV, SQL) within 30 days, and provide read-only system access for 60 days thereafter.”

A strong exit strategy negotiated upfront becomes a powerful lever during the contract term. If SAP knows you can leave on defined terms, they are incentivized to perform and offer fair renewal pricing.

Ensure Data Portability and Access Rights

• Data Ownership: The contract must explicitly state that you own the data and any customer intellectual property (custom code, configurations, reports). SAP’s indemnities and liability clauses should not jeopardize your data rights.
• Standard Export Formats: Insist on open or widely supported formats. For example, OData, XML, or CSV exports are required rather than proprietary blobs. This reduces conversion work if you migrate to another ERP. Use the contract to fix the export format and timing. (Eckhart Mehler advises specifying the format and timeframe for data handovers.)
• Regular Backups and Replication: Complement contract terms with technical measures. For instance, schedule frequent backups of S/4HANA and BTP to your own storage. If you manage your own hyperscaler account, you can replicate SAP database snapshots independently. This not only aids disaster recovery but ensures data is available if you leave unexpectedly.
• Access to Archives: Negotiate rights to historical data. SAP should permit access to archived records (e.g., read-only access to your system logs or audit trails). One practice is to obtain a fallback license for archival use. For example: “Customer may request SAP to provide a limited-use read-only license and data access for archival purposes at contract termination.”
• Custom Code and Configurations: Ensure you can extract your ABAP code, SAPScript forms, Fiori apps, BTP extensions, etc. Any custom developments require source code export. If SAP provides tooling for extraction (such as transports or Git repositories), ensure these are included.
• Example: During negotiations, explicitly ask SAP to deliver an “ERP-export toolkit” as part of transition support – e.g., a set of scripts or services to export master data, transaction history, and custom objects.

Focusing on portability prevents surprises. As one expert notes, “Plan the end game at the start” by securing data and system access rights in writing.

Promote System Interoperability

• Open Interfaces: Ensure the contract does not restrict integration with non-SAP systems. Confirm that all standard SAP APIs (OData, SOAP, REST), BAPIs, IDoc, and SAP Integration Suite connectors are available. Include language guaranteeing that no additional license fees will be charged for using built-in APIs or integration tools.
• Indirect Access Coverage: Clarify how SAP’s Digital Access licensing will apply. Ideally, negotiate that the RISE subscription includes reasonable digital document packs or define how new third-party connections are licensed. A surprise SAP licensing audit could hit you with fees otherwise.
• Third-Party Compatibility: Request a clause that SAP will certify or support integration with specific critical systems (e.g., your CRM, warehouse, analytics). If SAP claims certain SaaS tools or data warehouses are not “supported,” negotiate exceptions or additional services.
• Modular Connectivity: Use SAP BTP as an integration layer. In your strategy, build loosely coupled microservices and APIs so non-SAP data can flow in and out. When negotiating, you might require SAP to supply or permit middleware tools (such as SAP CPI or open-source platforms) that work across clouds.
• Example: Include a “data federation” agreement point. For instance, in the contract, “SAP shall provide customers with means to federate or export data from S/4HANA Cloud into external analytics systems or data lakes, and will document the process.” This ensures you can plug in third-party analytics or AI tools without a license dispute.

By preserving open interoperability, you avoid scenarios where your business process chain is irreversibly tied to RISE’s stack.

Maintain Hyperscaler Flexibility

• Cloud Choice & Ownership: RISE allows the selection of a hyperscaler (AWS, Azure, GCP, or SAP’s data centers). Negotiate how that choice is executed. Ideally, insist on a BYOC (Bring Your Own Cloud) model: you use your own cloud account but apply RISE services to it. This gives you full ownership of the cloud layer. If SAP resists, at least require that the contract permit switching providers at renewal without penalty.
• Multi-Region/Cloud: If geography or diversity is important, ask to deploy in multiple regions or across clouds. SAP’s standard RISE bundles may not cover true multi-cloud, but you can stipulate that critical workloads be replicable or containerized.
• Negotiable Hyperscaler SLAs: Since SAP controls the cloud contract, strong SLAs should be built into the RISE agreement. For example, you might require cloud uptime/SLA credits, defined remedies for outages, and performance metrics (I/O, network latency). You might also tie poor performance to termination rights.
• Cost Predictability: Hyperscaler egress and storage costs can erode savings. Negotiate to cap or share these charges. Alternatively, negotiate “bring your own license” deals for the cloud OS/DB layer so you control those costs.
• Migration Flexibility: Include terms allowing migration to another cloud or back on-premises. For example, an agreement to export virtual machines or container images in an open format could ease moving from AWS to Azure.
• Example: Add to the contract a clause such as: “Customer may switch to an alternative approved hyperscaler at renewal. SAP shall provide technical migration support (and data transfer) within 90 days of transition.”

By keeping hyperscaler options open, you avoid being trapped by a single pricing model or data residency risk. The ability to move between AWS, Azure, or GCP can become a strategic leverage in later negotiations.

Terms for Modular Separation and Migration

• Component-level Exit: Don’t accept that all RISE components are inseparable. Insist on the right to decouple services. For instance, the contract could allow removing managed or BTP services if you decide to run them yourself. Specify clearly which services are “bundled” and which can be split.
• Switchable Service Providers: If SAP or a particular partner provides system management, clarify that you can replace them with another vendor. Include provisions for knowledge transfer and handover. Ask that any third-party consultants on the contract can be rotated.
• Containerization and Portability: Encourage SAP to use container or cloud‑agnostic deployment where possible (e.g., SAP HANA on Kubernetes). Inquire about technical routes to move parts of the stack. While you cannot force SAP’s architecture, negotiating using standard technologies (like SAP HANA Cloud or CAP services on BTP) can lower migration effort.
• Plan B Licensing: Consider carving out a clause that if RISE is canceled, you retain some minimal license rights or can contract SAP for a new perpetual license. This “fallback license” is rare but worth exploring.
• Modularity in the Contract: Use a table (or the contract’s schedule) that lists all RISE components (core ERP, BTP, analytics, security, etc.) and their costs separately. This transparency helps you see what to drop if needed.

Developing a modular mindset—in contract language and system design—means you won’t be forced to migrate everything at once. It lets you phase transitions (for example, move the core ERP on one timeline while keeping BTP apps in place).

Recommendations

• Engage Experts Early: Form a negotiation team including IT architects, legal counsel, procurement, and an independent SAP/licensing advisor (e.g., Redress Compliance). Their expertise will help identify non-negotiable requirements and uncover hidden clauses.
• Map Your Assets and Needs: Inventory current SAP usage, custom code, and integrations. Use this to quantify risks and negotiate from a data-backed position (e.g. known counts of legacy interfaces, custom reports).
• Draft a “wish list” of clauses: Define needed terms before talks begin, such as data export rights, SLA credits, renewal caps, hyperscaler options, and post‑termination support. Treat these as must-haves, not afterthoughts.
• Negotiate Renewal Caps: Don’t forget renewal pricing. Lock in maximum increase percentages or tie them to indices (e.g., CPI). Specify that renewal rates will not exceed X% above the prior year.
• Plan for the End-Game: Maintain contingency plans as you finalize RISE. Keep your legacy ERP systems or a data warehouse accessible. Regularly test your exit readiness (for example, perform a yearly “fire drill” data extraction).
• Stay Informed on SAP Initiatives: SAP is evolving its RISE and cloud strategy. Look for new terms or offerings (like updates to RISE agreement language or hyperscaler partnerships) and adjust negotiations accordingly.
• Document Everything: Ensure all SAP commitments during negotiations are captured in writing. Verbal assurances have no legal weight.

Following these steps, sourcing leaders can negotiate RISE terms that preserve agility. The right contract language and architecture choices enable switching partners, platforms, or on-premises solutions in the future, minimizing risk from vendor lock-in.