Hybrid Operations: On-Premise and Cloud Running in Parallel for Years

Not every organization is headed for a full cloud migration. Some landscapes are too heterogeneous, some regulatory requirements too specific, some systems too deeply embedded in core processes to be fully decommissioned within a single migration project. The result is not a transitional state but a deliberately chosen operating model: on-premise systems and RISE cloud systems running side by side, for several years, sometimes beyond the end of a RISE contract period.

This operating model is contractually viable. But it is not automatically governed. Organizations running on-premise and RISE in parallel without actively managing the four core contract areas carry usage risks, SLA gaps, and budget variances that compound over the contract term.

What Hybrid Operations Mean in an SAP Context

Hybrid operations in an SAP context refers to the permanent parallel operation of at least two distinct system categories: one or more on-premise systems under a proprietary or third-party maintenance contract on one side, and a RISE with SAP contract (S/4HANA Cloud Private Edition, PCE) on the other.

This distinguishes it from the dual-use period, which is a temporary phenomenon. The dual-use period describes parallel operation during an active migration, typically six to eighteen months, with the explicit goal of shutting down the on-premise system afterward. Hybrid operations are the opposite: there is no planned decommissioning date for the on-premise system. Both environments are a permanent part of the operational architecture.

Typical real-world constellations:

ERP on-premise stays, because the system conversion for specific plants or legal entities is deferred for technical or regulatory reasons, while RISE runs for the rest of the organization.
BW or SolMan on-premise, because migrating those systems out of a live environment does not fit the RISE project timeline.
Specialty systems on proprietary infrastructure, because data sovereignty requirements, latency constraints, or add-on dependencies rule out cloud deployment.

In all cases: two contract regimes run in parallel. This is not an infrastructure problem. It is a contract governance problem.

Governance Moment: Usage Rights, Who Has What Rights on Which System?

In hybrid operations, the usage rights picture is complex because the same person may be entitled to use both on-premise systems and the RISE system without incurring two separate licenses. The contractual basis for this arrangement lives in the RISE contract and in the existing on-premise license agreement, and the two must be consistent.

The FUE model (Full Use Equivalent), which serves as the license metric in RISE, normalizes different user types into a single comparable unit. A user licensed as an Advanced User in RISE has different usage rights than a Core User or Self-Service User. In the on-premise environment, the Named User or Professional User classes specified in that contract apply.

The decisive question for hybrid operations: which on-premise usage rights remain valid after the RISE contract is signed, and which expire when the cloud subscription begins?

The Cloud Extension Program, through which existing on-premise customers transition to RISE, includes provisions on which usage rights are credited or preserved in what scope. These provisions are not standardized. They are subject to negotiation. Organizations that have no explicit language in the contract text about on-premise usage rights during parallel operation are operating in a gray zone.

What the contract must cover: which on-premise systems remain covered by the existing license agreement, for what period, and whether and how FUE licensing in RISE restricts or supplements on-premise usage.

Governance Moment: Authorizations, Role Design as a License Cost Driver

In hybrid operations, role design loses its purely functional character and becomes a license cost driver. This stems from FUE weighting in RISE: Developer Access equals two FUE, Advanced User equals one FUE, Core User equals one-fifth FUE. Organizations assigning role profiles that are broader than necessary pay more than required.

In on-premise environments, role design often grew organically: roles were created during projects, rarely cleaned up, and users received broader access when in doubt. In hybrid operations, this history translates directly into FUE billing when on-premise roles are carried over into the RISE environment without review.

Beyond that, an ongoing governance task emerges: who has access to which system, and does that match what is contractually licensed? In a pure on-premise environment, this was an internal governance task with no direct billing consequence. In hybrid operations, it is a task with direct budget impact.

What the contract must cover: how role assignments are delineated between on-premise and RISE, what processes role design changes trigger, and how deviations between licensed and actual usage are detected and corrected.

Governance Moment: Infrastructure, Two SLA Regimes Under One Operating Model

RISE with SAP includes a defined SLA regime for cloud components: SAP takes on infrastructure management, patching, backup, security, and 24/7 monitoring for the PCE environment. On-premise systems have no equivalent regime, unless a separate AMS contract or outsourcing agreement covers that.

In hybrid operations, SLA gaps emerge at system boundaries. When a process integrates on-premise and RISE systems, the RISE SLA applies to the cloud portion but not to the on-premise portion of the process chain. Failures originating in the on-premise component that affect the RISE environment fall into a responsibility gray zone.

The hyperscaler choice in the RISE contract (Azure, AWS, Google Cloud) also matters for hybrid operations, because complementary services such as identity management, network connectivity, and monitoring tooling may need to be aligned with existing on-premise infrastructure. Azure is the largest RISE partner and offers the deepest integration with on-premise environments via Microsoft Entra ID, which is relevant for organizations with an existing Microsoft infrastructure footprint.

What the contract must cover: which SLA obligations apply to which system area, how responsibilities are defined at system boundaries, and what processes engage when failures affect both environments.

Governance Moment: Cost, Managing Two Billing Regimes in Parallel

In hybrid operations, two billing regimes run concurrently: on-premise maintenance under the existing license agreement and the RISE ACV (Annual Contract Value) under the new subscription model. Both have different rhythms, different reference metrics, and different adjustment mechanisms.

On-premise maintenance is based on the maintenance base, composed of activated products, software version, and where applicable the Extended Maintenance surcharge starting in 2028. The RISE ACV is based on FUE, system size, edition, and contracted add-on modules.

Both figures can change over the course of the hybrid operating period: the maintenance base can be reduced by releasing licenses, while the ACV can increase through user changes or add-ons. If both trends are not tracked in a coordinated way, total SAP contract spend becomes difficult to forecast.

There is also the question of maintenance credits: existing SAP ERP customers can apply maintenance credits toward the RISE ACV through the Cloud Extension Program. These credits are negotiation-dependent and time-limited. In hybrid operations, it must be clear which credits apply to which portion of the subscription, and whether on-premise components that remain permanently in operation even qualify for credits.

What the contract must cover: how ACV and maintenance base are tracked separately, which credits are available for which periods and product types, and how budget variances in both regimes are detected before they affect planning.

The Deadline Chain: When Each Decision Shapes Your Options

Multi-year parallel operation has its own deadline chain, driven by maintenance milestones:

Through December 31, 2027: On-premise systems under Mainstream Maintenance. No surcharge, no required decision on Extended Maintenance.
From January 1, 2028: Organizations still running on-premise systems under EhP 6 through 8 pay Extended Maintenance with a two-percentage-point surcharge on the entire maintenance base, unless a move to PCE was completed before that date.
Through December 31, 2030: Extended Maintenance is available (terminable 90 days before year-end). Organizations continuing to run on-premise components after that date require either the Transition Option or third-party maintenance.
Transition Option (subscription 2028 to 2030, operation through December 31, 2033): For organizations that need on-premise systems beyond 2030. A 20 percent surcharge over the comparable PCE price applies, Max Success Plan is mandatory, and only EhP7 and EhP8 are supported.

For hybrid operations, this deadline chain means: organizations planning permanent on-premise components must have decided by the end of 2027 which maintenance regime applies to which system, and whether the Transition Option is a viable extension path.

This decision is not separate from the RISE contract. When RISE and on-premise both run long-term, how both contracts are negotiated determines the extent to which credits, SLA delineations, and usage rights influence total cost.

What Stays Out of Control Without Active Governance

Hybrid operations are not a one-time contractual setup that runs on autopilot. They are a permanent state with ongoing governance tasks:

Who has access to which system changes over time.
FUE distribution in RISE shifts when processes are reassigned between on-premise and cloud.
Maintenance costs for on-premise systems change with SAP's deadline cadence.
Credits have expiration dates that go unnoticed without monitoring.

The challenge is not that hybrid operations are technically complex. It is that two distinct contract regimes must be observed and coordinated simultaneously, without a central system designed for that purpose.

Organizations that do not actively govern their SAP contracts after signing feel the consequences of poorly structured hybrid operations only when a maintenance invoice does not match the budget, a license audit calls usage rights into question, or a renewal touches both contract regimes at the same time.

Summary

Permanent hybrid operations combining on-premise and RISE are not a technical problem. They are a governance problem. The four areas, usage rights, authorizations, SLA boundaries, and budget tracking, must be anchored in the contract text and monitored throughout the operating period.

Organizations that actively govern these four areas retain room to maneuver when changes arise, renewals approach, or SAP-side deadlines kick in. Those that leave them to chance carry budget risks that compound over multiple years.

Next steps: If you are planning hybrid operations or already running a parallel environment, a review of your contractual foundations is the right starting point. Our Contract Check analyzes your current contract situation and shows which provisions are missing and where action is needed. Get in touch.