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Author's profile photo AMIT Lal

SAP Migration on Cloud vs on-premise technical considerations


Back in 2006 when I worked for SAP in field services specialized group executing big technical upgrades and Unicode migrations projects for large sized customers where there was one big constant factor, before starting any migration project as starting early to think about the hardware requirements before you think about the software that you want to build.

Now all considerations are changing after one decade altogether with “new cloud age evolution”, if you are planning to move business computing to the cloud especially with SAP HANA platform.

There are a number of different reasons and technical considerations, which I tried to capture in tabular format for initiating discussions with SAP customer and working in technical ecosystem and exploring all cloud options available vs on-premise feasibility


Migrate to HEC

Migrate to On-Premise

HANA Migration approach

SAP DMO tool works directly on SAP Enterprise Cloud platform(HEC or HCP) only for SoH or BWoH. 

This option is not available to any other Cloud provider as per SAP.

SAP DMO tool work on all TDI/virtualized/appliances environment running on premises. The customer (usually collaborates with consulting partners) implement highly individual requirements regarding business processes and customization while migrating on Suite on HANA using DMO

Access to systems

Via the Internet or mobile device, future ready

Client server for local workers or Terminal Server or Citrix for remote employees.

Remote Locations

HEC has multiple sites or many geographic locations but do not want to build or support remote access to existing network.

Have multiple sites across geographic locations and have a supporting network infrastructure.

Software Investment

HEC License fee enables the company to use the software. One predictable monthly payment covers everything from infrastructure and vendor software support to daily back-ups and software upgrades.

License fee enables the company to own the software only. Upfront purchase with annual maintenance / subscription renewals in the 20 – 25% range.

Initial Services Investment

HEC Migration and Implementation services tend to be less than on-premise solutions since installation, infrastructure prep, and some configuration are completed by the SAP HEC team.

A good rule of thumb is to spend anywhere from $1  – $2 for every dollar spent on the initial software license.

Ongoing Services Investment

SAP Cloud Business process consulting as necessary with maximum technical support from SAP

Software upgrades every 12 – 24 months; technical support and business process consulting as necessary.

Hardware / Infrastructure Investment for HANA migration

A reliable Internet connection and HANA Cloud base configuration by SAP

Traditional IT components including server hardware and software, data backups, storage, disaster recovery, and remote access and network connectivity

User Interface

SAP provides Web technology that enables an intuitive, customize interface and many of the user-friendly features Internet users have grown accustomed to in web-based applications.

Mature technology with a traditional Windows interface.

Company Profile

Fast growing companies who want to invest in an affordable solution capable of growing with them and want the flexibility of anywhere, anytime access without investing in IT infrastructure.

Established companies with the ability to make the required upfront investment to purchase and implement the software. Minimum timeframe for an on-premise solution should be 5 – 7 years.

Software Customization

Think “configuration”, not heavy customization

In-depth customization and integration capabilities; appropriate for companies with a high-degree of customization or a need for extensive custom programming services.

Migration Time

Varies by project size and scope, but migration time tends to be less than on-premise solutions since installation, infrastructure prep, and some configuration are completed by SAP Cloud team.

Varies by project size and scope, but migration time tends to be a bit longer and more involved, perhaps adding 1 – 2 months to the timeline of a comparable cloud-based migration using DMO

CapExpense vs. OpExpense

The HEC subscription model converts traditional technology capital expenses into an operational expense, which can be positive for maximum cash flow flexibility.

On-premise HANA Platform Software and hardware are capital expenses

IT Infrastructure

Limited or no internal IT resources and/or no desire to invest in or support additional IT infrastructure since SAP Support drives overall IT support infrastructure.

Established IT support with software domain expertise and a solid backup and security strategy.

I hope you’ll find this new provided information useful, in subsequent blog I’ll share considerations with other cloud providers in industry.


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      Author's profile photo Simon Zhang
      Simon Zhang

      Thanks a lot Amit - very helpful overview.

      Author's profile photo Former Member
      Former Member

      I can only see part of picture. The on-premise part is missing here.

      Could you please re-post the picture again? Thank you so much.

      Author's profile photo Amit Lal
      Amit Lal
      Blog Post Author

      Sure...will do. Thanks