It can sometimes be hard to follow SAP and its marketing machine, particularly prolific in terms of rebranding and new offerings.
Is it fair to say the launch of the RISE with SAP solution will be in the same vein? Is it a new offering? Is it a rebranding effort? Is it worth the while?
In order to analyze all this and determine if SAP has reached its simplification goal of accelerating the digital transformation of its clients, it is important to take a step back and understand where this product comes from.
S/4HANA: A Great Product with a Slow Adoption Rate
In 2015, SAP launches the first complete version of its new ERP: SAP S/4HANA. It draws on the HANA in-memory database and allows its users to develop effectiveness using a new interface (Fiori), screens that support transactional and analysis functions, and reinvented processes. S/4HANA is at the foundation of the intelligent enterprise since it also offers artificial intelligence and machine learning predictive features within the actual ERP.
Despite all this, the implementation of the new ERP is slower than expected since many Installed Base customers (under SAP ECC) are not ready to take the plunge in the immediate future. Moving to S/4HANA is considered a priori a technical upgrade and a change in the database rather than the opportunity to improve and accelerate the digital transformation.
Due to the outcry of its customers, SAP is forced to extend the support and maintenance period of its ECC version to 2027.
Cloud: Poor Understanding of the SAP Offering
What’s more confusing than the cloud? IaaS, PaaS, SaaS?
SAP also entered the cloud race to become a leader in this market, sometimes ambiguously to the eyes of its clients who were already confused regarding the different cloud offerings:
SAP goes to the IaaS market with its own solution, HEC (HANA Enterprise Cloud), but it fails to gather traction. It proves to be less competitive than those of hyperscalers (mainly Amazon Web Services, Microsoft Azure and Google).
SAP launches SAP HANA Cloud Platform, its development solution. It is renamed SAP Cloud Platform in 2013, and today it bears the acronym BTP (Business Technology Platform). It is a wonderful PaaS that complements, develops and implements solutions of the SAP portfolio. Yet, over time, SAP realizes that the secret ingredient to the success of this platform is the involvement of hyperscalers.
These various launches combined with several name changes resulted in some confusion.
For the SAP ERP, the SaaS comes in late, in 2016, with the first public cloud version of S/4HANA, named Multi Tenant Edition (MTE).
Since the launch, the market views the public cloud version of S/4HANA as a highly standardized adaptation of SAP’s flagship ERP, but allowing fewer scenarios and configurations than the on-premise version.
From S/4HANA Cloud MTE (Public) to S/4HANA Cloud Private Edition
Aware that the majority of Installed Base clients—having benefited from the on-premise version of the SAP ERP (ECC) for years—were not ready to standardize their processes and give up on specific functionalities, SAP launches as a first step a SaaS version named Single Tenant Edition (STE), which would later become the S/4HANA Extended Edition suite.
Even if it is more comprehensive than the MTE version and offers more configuration and customization options, this version is still limited and hardly takes off due to its high price.
Consequently, SAP had to come up with a solution to accelerate the adoption of its intelligent S/4HANA ERP, to promote cloud adoption to its clientele, and to quickly bring its client base into the intelligent business era.
At the end of 2020, SAP decides to launch its flagship ERP in SaaS mode, hosted by a hyperscaler of the customer’s choice, under the name S/4HANA Cloud Private Edition to combine the best of both the cloud and the complete on-premise version. In the subscription, SAP includes value-added services and tools for clients going through a digital transformation. All grouped under the RISE with SAP offering.
Streamlined Service Offer: RISE with SAP
In a context where accelerating the digital shift has become increasingly urgent, SAP launches RISE with SAP, a contract-based model allowing customers to subscribe to either one of the S/4HANA Cloud intelligent ERP versions:
S/4HANA Public Cloud (Essentials Edition, or ES), new name of the MTE version, is created for beginners and clients who want to quickly standardize their processes. The Public version is somewhat more superficial than the Private version, but has the advantage of being a turnkey solution where even the upgrades are managed directly by SAP.
S/4HANA Private Cloud is oriented toward advanced users or clients who want to maintain the solution’s configuration and development options while leveraging the main benefits of the cloud.
In addition to providing ERP and infrastructure user rights in a single subscription, RISE with SAP includes several services:
Additional tools and services
Business process analysis
Access to the SAP Business Technology Platform (i.e., SAP Cloud Platform)
Access to the SAP business networks (Ariba Network, Asset Intelligence Network, Logistics Business Network).
RISE with SAP for a Client Who Does not Use the ECC SAP ERP
Today, a new client who wishes to use S/4HANA has three options:
Purchase an on-premise (OP) license and install it in his own infrastructure, or have it hosted by a hyperscaler of his choice. In this case, the client has complete control over his technology process, but goes against the cloud trend. It is a model that combines CAPEX and OPEX.
Subscribe to the S/4HANA Public Cloud (ES) SaaS version via a RISE with SAP subscription, and use a performing, innovative and standardized version of the ERP. It is a 100% OPEX model.
Subscribe to the S/4HANA Private SaaS version via a RISE with SAP subscription, and take advantage of the on-premise version, although hosted by a hyperscaler and managed by SAP, and available by subscription. It is a 100% OPEX model.
RISE with SAP for a Client Who Already Uses the ECC SAP ERP
The client has four options to go from the ECC version to S/4HANA.
Status quo Conversion of ECC OP to S/4HANA OP. Note that the hardware and operating system may need to be upgraded, and that HANA and Linux skills may be required to operate S/4HANA OP. It is a CAPEX and OPEX model.
Lift and Shift May be an intermediate solution for upgrading his ECC OP version to S/4HANA OP, but in the infrastructure of a hyperscaler (IaaS). In this case, the client maintains his OP licenses, like in the first option, but must enter into an IaaS agreement with a hyperscaler. It is a CAPEX and OPEX model.
RISE with SAP Public Cloud (ES) Shift away from the on-premise model in favor of the SaaS model, with a subscription to RISE with SAP Public. Very unrealistic scenario 95% of the time since it leads to a complete reintegration of a highly standardized version of S/4HANA. It is an OPEX model.
RISE with SAP Private Shift away from the on-premise model in favor of the SaaS model, with a subscription to RISE with SAP Private. The most realistic scenario that allows adding the SaaS to a simplified agreement, while retaining control of his ERP. It is an OPEX model.
A Few Nuances
When switching to S/4HANA, a client who already uses ECC should at least look into the aforementioned Lift and Shift scenario, but he should most importantly consider the SaaS offering of RISE with SAP Private for several reasons:
It will streamline his contract and SLAs.
He will go into SaaS mode, 100% OPEX.
He will gain access to the Business Technology Platform and to the SAP business networks included in the subscription.
He will benefit from SAP’s Cloud Extension programme to restructure his users and licenses upon moving to RISE with SAP.
RISE with SAP is a streamlined SaaS model available on subscription that includes the S/4HANA ERP, infrastructure as well as many additional tools and services required for a successful digital shift. This model can be compared to the leasing of a vehicle offered in two versions:
Standard (Public) Few options, but includes all maintenance services.
Luxury (Private) All options, but only includes specific maintenance services.
So, to answer the questions found in the introduction:
YES, the Private version is a new offering.
YES/NO, the Public version is a rebranding of sorts.
YES, it is worth the while since it simplifies the access to the tools of the intelligent enterprise, on a streamlined subscription model.
In order to determine the best route for your organization, Createch proposes an SAP-certified approach: S/4ACTION.