SAP S/4HANA: Public cloud, private cloud or on-premise?

Inhalt:

Introduction
What is S/4HANA Public Cloud?
What is S/4HANA Private Cloud?
What is S/4HANA On-Premise?
What are the differences between S/4HANA public cloud, private cloud and on-premise?
The advantages of S/4HANA Public and Private Cloud
Which version is suitable for my company?
How abat can support you in selecting and implementing the right solution

Hardly any company can manage without cloud solutions completely nowadays. The advantages of cloud offerings are lower costs and flexible deployment. SAP also offers companies this flexibility with its SAP S/4HANA solution. Companies can choose from various options for how the software is made available to them. The system can be operated in the cloud as a multi-tenant, in the Private Edition as a single-tenant or, like previous ERP versions, as an on-premise solution.

In this blog post, we will first briefly describe the three deployment options. We will then explain the differences between the public cloud, the private cloud and the on-premise version. We then go into the advantages of the cloud variants. Finally, we'll give you some questions to ask yourself. This will give you an initial idea of which variant is suitable for your company.

What is S/4HANA Public Cloud?

SAP S/4HANA Public Cloud ERP is SAP's cloud ERP solution that can be used directly. The cloud ERP variant integrates current industry-specific best practices and continuous innovations. The S/4HANA public cloud solution is located in a data centre. SAP is fully responsible for the installation, operation, maintenance and updates of the software. The business processes that can be mapped are limited to SAP's predefined processes (best practice). This reduces the adaptability of the software to individual company requirements. However, the predefined, standardised processes significantly reduce the implementation effort and costs.

What is S/4HANA Private Cloud?

SAP S/4HANA Cloud, Private Edition, is a customised cloud ERP solution that can be flexibly adapted to a company's specific business processes. In terms of customisability and functional scope, the private cloud edition is in no way inferior to the on-premise solution. When using this variant, companies enter into a long-term agreement with SAP, whereby the infrastructure and maintenance are taken over by SAP. In the private edition, the S/4HANA system is technically operated either in SAP's data centre or a hyperscaler, such as Microsoft Azure or AWS.

IT technician working on a laptop in the data center, surrounded by servers in blue light.

What is S/4HANA On-Premise?

SAP S/4HANA on-premise refers to the provision of the SAP S/4HANA solution on the company's own servers and data centres. With the on-premise version, the company acquires a one-off product licence for the use of the S/4HANA system. The on-premise version enables the most comprehensive customisation options and a full range of functions that can map all business processes. The operating and maintenance costs are borne entirely by the company, which is why the costs of using S/4HANA are high with the on-premise version.

What are the differences between S/4HANA public cloud, private cloud and on-premise?

The core of the ERP solution differs only slightly. The deployment options vary primarily in the type of licence ("as-a-Service" or "as-a-Product"), the technical infrastructure and the degree of customisability. While the functional scope of the on-premise and private cloud variants is almost identical, there are differences in detail in the public cloud.

Range of functions SAP S/4HANA public, private cloud and on-premise

The S/4HANA Public Cloud offers a broad selection of established best practice processes and represents a fully comprehensive ERP system for companies from all industries. However, individual customisation options are only possible to a limited extent and are less extensive than with the other options. The following options are available for expansion:

The SAP Business Technology Platform (as a side-by-side extension)
The in-app extension by key users
On-stack development in the S/4HANA Cloud ABAP environment

The public cloud variant is therefore an immediately executable standard ERP solution that should be of particular interest to small and medium-sized companies.

The Private Cloud and On-Premise variants offer the full range of S/4HANA functions and a wider range of customisation options. For example, code modifications are also possible here (although not recommended). Switching from the existing SAP ECC to S/4HANA using the brownfield approach is also only possible for these options.

Innovations in the cloud

The high degree of standardisation in the public cloud enables shorter innovation cycles. New functions are delivered monthly and can be activated on request. All new features are made available as releases every six months. In this way, public cloud customers always benefit from the latest innovations thanks to continuous updates. Large upgrade projects are completely eliminated.

With the private cloud and on-premise version, the familiar SAP release cycles remain in place. Upgrades are not installed automatically and can be controlled individually. The effects of upgrades on changes made to the system must be analysed in detail before each upgrade.

Licensing

The S/4HANA Cloud (Public and Private Edition) is available in the form of a monthly subscription model. The cloud solutions are therefore offered in the form of a Software-as-a-Service (SaaS) model. Usage costs are based on the full user equivalents (FUE) on the system and any additional functions booked. The scope of the ERP solution can therefore be scaled flexibly. The software adapts dynamically to the development of the company.

In the case of S/4HANA on-premise, on the other hand, a product licence is purchased (provision as software-as-a-product). In contrast to the licence model in the cloud, which is associated with low and predictable running costs, a product licence involves a high one-off investment.

The advantages of S/4HANA Public and Private Cloud

Using a cloud solution can bring considerable benefits for companies. Instead of operating their own data centre and having to take on issues such as system maintenance and upgrades themselves, these activities are outsourced to SAP or corresponding service providers. This approach is more cost-efficient and increases flexibility and the speed of innovation.

Companies can increasingly concentrate on their core business and still benefit continuously from SAP's innovations and the further development of the software.

The use of SAP best practice processes also favours the automation of operational processes and simplifies the development of a multi-level system landscape. When utilising these processes, companies benefit massively from pre-designed interfaces to other SAP and non-SAP systems.

Developer writes code on a computer, monitor displays HTML or CSS code.

Which version is suitable for my company?

Zur Beantwortung dieser Frage ist vor allem der individuelle Ausgangspunkt des Unternehmens entscheidend. Zu dessen Findung sind wiederum Antworten auf die folgenden Fragen wichtig:

Besteht der Wunsch in die Cloud zu wechseln?
Sind Sie offen, Ihre bestehenden Prozesse an standardisierte Geschäftsprozesse anzupassen?
Sind Sie bereit für einen Neustart, in einem komplett frischen System?

Ja? Dann könnte die S/4HANA Public Cloud eine echte Alternative sein!

Besteht der Wunsch in die Cloud zu wechseln?
Wollen Sie von den Vorteilen einer Abo-basierten Software-as-a-Service-Lösung profitieren?
Möchte Sie Ihre etablierten Geschäftsprozesse ganz oder teilweise übernehmen?
Benötigen Sie eine komplexe Systemlandschaft, mit hohem Bedarf an Anpassungen?

Ja? Dann könnte die S/4HANA Cloud, Private Edition Ihre Anforderungen erfüllen.

If this is not the case, or if there are concerns about storing the company's data in a hyperscaler's data centres, or if investments already made in in-house hardware are to continue to be used, an on-premise solution appears to be the best option.

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Depending on the individual goals and needs of a company, there are three options for the introduction of S/4HANA:

How abat can support you in selecting and implementing the right solution

The cloud variants have become a real alternative for the introduction of SAP S/4HANA. To ensure an efficient implementation, it is advisable to conduct a systematic preliminary study in which the company's requirements and the functions of the SAP solutions are compared.

The focus here is on clarifying which path should be taken. This requires analysing the content and scope of the migration as well as planning the duration and scope of the project. The challenge is to define a goal that can be achieved with existing resources and leaves room for the future. A systematic preliminary study using the SAP Activate method - especially if a cloud ERP system is being targeted for strategic reasons - makes the implementation project easier.

SAP Activate offers project management and implementation with an agile approach in six phases. Our approach in the preliminary study specifically addresses aspects from the Prepare and Explore phases, including the fit-gap analysis. These results help to make an informed decision on the right deployment option and provide clarity on how the company can derive the greatest benefit from the implementation in the shortest possible time.

Do you need advice or support with your SAP S/4HANA project? We will be happy to help you. Contact us at info@abat.asia