Product Information
S/4 HANA On-Premise Vs S/4 HANA Cloud
In this blog, I will focus on the difference between S/4HANA Cloud and On-premise.
SAP S/4 HANA On-Premise Edition
SAP S/4HANA on-premises is the ERP business suite based on the SAP HANA in-memory database. With on premises, the customer manages everything, including the HANA database, applications, data centers, OS, middleware, servers, virtualization and networking.
SAP S/4 HANA Cloud Edition
SAP S/4HANA Cloud is the SaaS version of S/4HANA. SaaS deployment means that users can take advantage of much of on-premises S/4HANA’s functionality without needing the hardware, databases or IT staff required for the on-premises version.
In S/4HANA Cloud, SAP provides and manages almost everything for customer.
S/4HANA On-premise Vs S/4HANA Cloud
Let’s compare S/4HANA Cloud and on-premise version on common customer concerns.
Licensing Model
Cloud: Subscription licensing
On Premise: Traditional licensing
Infrastructures and maintenance
Cloud: SAP provides the system and is responsible for the system maintenance
On Premise: The customer is in control of deployment and maintenance with dedicated own IT staff
Customization
Cloud: Although able to be customized to some extent, there is far less flexibility compared to on premises.
On Premise: There is far more flexibility with and control of customization since the company manages all customization in-house.
Implementation
Cloud: The implementation is faster than S/4HANA on premises since the cloud version uses a ready-made platform that has already been provisioned, implemented and tested by the cloud provider.
On Premise: Implementation takes time, cost, effort and the right personnel to set up a new environment. There may also be a need to purchase additional hardware or software to implement new features.
Integrations
Cloud: Integration among various corporate systems can be complex and involves greater security risks due to data being sent over the internet.
On Premise: Data transfer among systems is faster, and integration over the internet is relatively simpler.
Upgrades and support packages
Cloud: There is less control over an upgrade schedule compared to on premises. However, the cloud provider can inform the customer in advance about the impending upgrades, and the customer can choose the timing and functionality of the upgrade.
On Premise: The company decides the frequency and schedule of software upgrades or whether to implement the latest support packages. This option is time-consuming and expensive, and involves technical or functional resources.
Scalability
Cloud: Scaling up or down is easier, faster and cheaper to meet the changing needs of the company.
On Premise: This approach needs long-term planning and commitment for resources required for scaling.
How do I know Which SAP S/4HANA Is Right for My Business?
The SAP S/4HANA, on-premise edition is the best fit for enterprises in any industry that need the full spectrum of functionality combined with a high degree of flexibility in customization.
Typically, these will be larger enterprises with very well-established processes that they are not interested in changing.
The SAP S/4HANA, cloud edition is the best fit for companies that need a highly agile offering that covers their core business scenarios, yet offers more flexibility and a faster innovation cycle (quarterly as opposed to yearly). It’s perfect for businesses that are changing or growing rapidly and want a platform that can grow and change with them.
Have any doubt or question? Please post that in comment.
Hi,
Very informative. Thank you for sharing..!!
Regards,
Amit
Thanks Amit. Glad you liked it.
I think the colours on your 2nd chart may be the wrong way round. With S/4HANA Cloud surely the provider (SAP) takes care of everything?
Thanks Mike. By mistake I had switched the colors. Have corrected it.
Hi Raja,
simple to read and useful , thanks you .
Very good information, thanks for sharing!
Thank you!!
This is really nice information.
Thanks for for this very accessible summary. Any example of large companies going to cloud ? can cloud APPS be easily plugged to on Premise system ?
Thanks Raja for so clear explanation.
I have a question, Does S/4HANA On Premise run over traditional databases such as IBM, Oracle? or need the specific SAP Hana Database in house.
Regards,
Hi Manuel,
SAP S/4HANA means SAP Suite for SAP HANA. Whether it is on Premise or in Cloud, it always run with a SAP HANA database (in-house or hosted or at hyperscalers)
Best regards
Renaud
Nice comparison, thanks. Do these editions have the same functionality and business capability, such as full ERP scope? Does it make sense to have both versions deployed for one organization and have implemented data synchronization between the two?
Hi, Raja. Thanks for your nice and clear comparison.
I have a question: the way for create and develop CDS (data definition with joins, associates, etc.) with Eclipse, and use of Data definition from ABAP programs, is the same with S/4Hana Cloud and S/4Hana on Premise?
Best regards.
Gustavo
Hi Gustavo,
For S/4HANA (both onpremise and cloud), recommended way to create CDS view is via in-app extension. You may also look into side-by-side extensibility. Check below documents.
https://www.sap.com/documents/2018/05/606d1ee8-037d-0010-87a3-c30de2ffd8ff.html
https://blogs.sap.com/2017/05/10/first-steps-with-sap-s4hana-cloud-sdk/
Regards,
Raja
Thank you Raja for putting this together! Looking forward for the release of S/4HANA Cloud 1908.
Very Informative. Thanks for sharing!
nice comparison and thanks good information
Thanks for sharing