We’ve all watched the cloud revolution unfold, right? First, we moved from physical servers in the office to “on-prem” data centers. Then came third-party colocation. Now, we’re soaring through the hyperscaler clouds of AWS, Azure, and Google Cloud like it’s the Jetsons era.

For years, SAP customers have had to pick a lane: “on-premise” or “cloud.” But here’s the thing, those terms are starting to feel a bit... dusty. Today, the real question isn’t about where your SAP system physically lives. It’s about how you buy it, who manages it, and how much control you really want.

It’s time we reframe the conversation from On-Prem vs. Cloud to Ownership vs. Subscription.

Ownership vs. Subscription: Why the Shift?

Growing up, many of us were taught that ownership was the ultimate goal. Own your home, own your car; it just makes more sense, right? Well, until you realize you’re replacing your furnace in year three and your brakes in year four. Suddenly, leasing doesn’t sound so bad.

The same shift is happening in enterprise IT. The choice isn’t just about geography (on-prem vs. cloud), it’s about operational control vs. convenience. In SAP’s world, that boils down to:

• Ownership Model: Perpetual license. You own the software, pick your hyperscaler, manage your patching and upgrades, and call the shots.
• Subscription Model (RISE/GROW): You rent the software, and SAP (or their partner) bundles hosting, upgrades, support, and a handful of goodies into a recurring fee.

Ownership Model: Full Control, Long-Term Play

Under the ownership model, you buy SAP S/4HANA licenses outright. You pick where to host it: AWS, Azure, Google, or even your cousin’s basement server (kidding… kind of). The point is: you’re in charge.

Advantages:

• Total Flexibility: Choose your cloud. Customize to your heart’s content.
• Full Control: Over upgrade timing, infrastructure, and integration.
• Cost-Effective in the Long Run: Once you’re past the upfront hit, the TCO starts looking very attractive.
• Open Integration: Easier to plug into your existing landscape without hitting SAP-imposed guardrails.

Disadvantages:

• Upfront Investment: Licenses, hosting, Basis support ... it adds up early on.
• You Own the Plumbing: Patching, performance tuning, backups. That’s all on you (or your team).
• Upgrade Anxiety: If you delay upgrades, you may fall behind on innovation.

Subscription Model (RISE/GROW): Convenience as a Service

The subscription model is like checking into a fully serviced Airbnb. Everything’s ready for you. SAP handles the software, infrastructure, support, and even throws in some bonus tools like SAP Cloud ALM and SAP BTP access.

Advantages:

• Simplified IT: No more managing hosting or Basis support.
• CapEx or OpEx: Monthly fees = easier budgeting and approval.
• Access to Innovation: Automatic updates, latest features, continuous improvement.
• Fast Start: Pre-configured industry best practices mean you’re up and running sooner.
• Fixed Costs: Predictable subscription fees, even if you're running multiple projects at once.

Disadvantages:

• Less Control: SAP decides where and when upgrades happen.
• Customization is Tricky: Especially in GROW (public cloud).
• Vendor Lock-In: You’re tied to SAP’s infrastructure and pricing model.
• Higher Long-Term Cost: You’ll likely pay more over the years than if you owned the licenses.

So… Which One is Right?

Remember when you were broke and leased your first car just to get on the road? That’s what the subscription model can feel like. You don’t need a huge upfront investment, and everything’s taken care of. But over time, leasing always costs more.

That doesn’t mean it’s wrong; it just depends on your current priorities.

If you're trying to:

• Accelerate your digital transformation
• Launch quickly without heavy CapEx
• Take advantage of bundled tools and support

Then Subscription might be right for you.

But if your focus is on:

• Long-term TCO reduction
• Deep customization
• Maximum infrastructure flexibility

Then Ownership still makes a whole lot of sense.

Final Thought: It’s Not About Where—It’s About How

SAP is clearly nudging (ok, pushing) customers toward RISE and GROW. But smart organizations shouldn’t be distracted by the hype. As of 2025, the infrastructure question is mostly irrelevant. Nearly everyone is in the cloud. What matters now is how you want to operate your business.

Own it? Lease it? There’s no universally right answer—just the right answer for you.

At the end of the day, it's about choosing the model that aligns best with your IT strategy, risk appetite, and internal capabilities.

So let’s stop asking “On-Prem or Cloud?” and start asking the more meaningful question:
“How do I want to run SAP?”