TCO Face Off Calculating the True ROI of RISE with SAP Private Cloud vs GROW with SAP Public Cloud Over 5 Years
Why SAP Cloud TCO Matters in 2026 As organizations increasingly migrate to the cloud, many assume that subscription pricing alone determines total cost of ownership (TCO). However, with SAP offering two major cloud deployment paths RISE with SAP Private Cloud and GROW with SAP Public Cloud business leaders must evaluate both financial and operational impacts over a realistic fiveyear horizon. In this article, we break down a 5-year TCO comparison across subscription costs, infrastructure, integrations, operations, upgrades, extensions, and other hidden expenses that are often overlooked.
Understanding Cloud ERP TCO Components Regardless of deployment type, the main cost drivers include: 1. 2. 3. 4. 5. 6. 7.
Subscription and Licensing Implementation and Partner Fees Customization and Extensions Integration and Middleware Upgrade Costs Support and Operations Industry-Specific Requirements
The key difference lies in how each cost category scales depending on the cloud model.
GROW with SAP Public Cloud: 5-Year TCO Breakdown
1. Subscription Costs – Predictable and Scalable Public cloud subscriptions are transparent, usually billed per user or module. This includes hosting, system monitoring, quarterly innovations, and technical upgrades. 2. Implementation Costs – Faster and Cost-Effective Thanks to SAP Best Practices and templated workflows, public cloud implementations typically cost 40–60% less than private cloud. 3. Customization Costs – Minimal Custom coding is limited; companies mainly rely on SAP-delivered processes, low-code/nocode extensions, and SAP BTP side-by-side apps significantly reducing development costs. 4. Integration Costs – Standardized Standard APIs enable integrations but may restrict depth. Industries such as retail or automotive, which use SAP DBM (Dealer Business Management), may need BTP extensions for specialized integration. 5. Upgrade Costs – Automated SAP handles all upgrades. Internal teams only need to perform optional regression testing. 6. Support & Operations – Lean IT Teams Operational responsibilities largely shift to SAP, allowing internal IT teams to remain lean. 5-Year TCO Insights for Public Cloud: • • • •
Rapid deployment Predictable operational expenses Limited need for complex customizations Preference for standard processes
RISE with SAP Private Cloud: 5-Year TCO Breakdown 1. Subscription Costs – Higher but Flexible Private cloud provides dedicated infrastructure, full landscape control, and a customizable ERP environment, resulting in higher subscription fees. 2. Implementation Costs – Tailored but Costly Private cloud deployments often involve: • • • •
Custom workflows Industry-specific processes Multi-system integrations Large-scale data migration
Complex industries like healthcare benefit from solutions such as SAP Asset Management Healthcare, increasing initial costs but enabling operational efficiency. 3. Customization Costs – Extensive Freedom Customers can modify business logic, build custom tables, tailor UIs, and deploy bespoke workflows. Over five years, these investments drive competitive differentiation.
4. Integration Costs – Deep & Flexible Private cloud allows integration with legacy systems, IoT platforms, MES, and dealer management systems, supporting ROI but increasing TCO. 5. Upgrade Costs – Requires Oversight Upgrades are not automatic. Customers manage testing, remediation, and functional validation, adding recurring operational costs. 6. Support & Operations – Skilled Teams Needed Private cloud requires either skilled internal IT teams or managed services for smooth operations. 5-Year TCO Insights for Private Cloud: • • •
Customization drives strategic value Industry complexity requires specialized workflows Deep integration capabilities deliver ROI despite higher TCO
ROI Comparison: Public vs Private Cloud Public Cloud ROI Strengths: • • • •
Low maintenance cost Fast speed-to-value Scalable standardization Ideal for subsidiaries or SMBs
Private Cloud ROI Strengths: • • • •
Competitive advantage via tailored processes Optimal for regulated industries Greater control over system evolution Ability to optimize operations deeply
The ultimate ROI depends less on cost and more on alignment with operational strategy.
Final Verdict: Which Cloud Delivers Better 5-Year ROI? Choose GROW with SAP Public Cloud if you: • • •
Prioritize standardization Seek low TCO Need rapid transformation
Choose RISE with SAP Private Cloud if you: • • •
Require complex process enablement Need deep customization Seek strong industry differentiation
Ready to Optimize Your SAP Cloud Strategy? Contact us at 2isolutionsus.com or email
[email protected] to explore the right SAP deployment path for your organization.
