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Author's profile photo Sven Denecken

Hybrid cloud is the new black

Welcome to a new blog series on Hybrid deployment and the lessons we have gathered co-innovating with our clients with SAP S/4HANA Cloud. Let us first demystify “Hybrid Deployment” first and then set the context on what to expect in this series.

Gartner predicts that by 2021, more than 80% of product-centric companies that currently own a monolithic ERP solution would have considered a federated ERP application approach to fulfil their product-centric business capabilities. (Reference: see ‘Market Guide for Cloud ERP for Product-Centric Companies’, ID G00347860, Gartner)

In SAP´s case a hybrid architecture spanning the company’s parent or mothership, best of course operating SAP S/4HANA and its subsidiaries, ecosystem or associate entities equipped with SAP S/4HANA Cloud is an alternative to the traditional ERP template approach. Many clients also need to span across a multitude of ERP solutions, an interesting challenge. With SAP´s solution Central Finance – a clever way to consolidate AND use the power of S/4HANA.

Simply put, hybrid offerings can be clustered in any one of the following:

Figure 1: Hybrid Deployments

The most typical hybrid deployment is the headquarters and subsidiary model and has been dealt in detail in our earlier 2-Tier ERP Series.

But hybrid deployment can also be for cases of central or shared services; or for Corporate- Associate entities (for largely autonomous business units or divisions. This scenario is very attractive if your company fosters the entrepreneurship and innovation through the ‘corporate start-ups’ model); or for ecosystem models of Dealers, Vendors and Subcontractors.

For all the above types of deployment, any of the deployment Tier (Headquarter, Subsidiary, Corporate, Associate entities, Dealers etc..)  can run SAP S/4HANA Cloud, SAP S/4HANA Private Cloud or S/4HANA OnPremise or SAP ERP.

In essence, to be optimal leveraging the most modern technology and ERP offering, the following valid deployments are feasible and best in class:

  • S/4HANA Cloud <-> S/4HANA Cloud
  • S/4HANA Private Cloud <-> S/4HANA Cloud
  • SAP S/4HANA OnPremise or SAP ERP ßàS/4HANA Cloud
  • S/4HANA Cloud <-> any Third-Party ERP systems

Let us pick one such interesting deployment for illustration here: S/4HANA Cloud <-> S/4HANA Cloud

Figure 2: S/4HANA Cloud at both the Tiers

This is the valid deployment model, where S/4HANA Cloud runs in both the Tiers. A classic case could be where a larger conglomerate runs certain geographically related associate entities in one S/4HANA Cloud and other associate entities in another S/4HANA Cloud tenant.

With such deployment, the expectation would be that business processes between them are as seamless as running in one box.

We will take an example of Sales scenario of Stock in Transit and cover these types of deployment in our blog in this series: “Cross company processes in Hybrid Cloud”.

Also look out for a whitepaper on “Business Process in Cross System Hybrid Landscape”, specifically covering these aspects.. (coming soon)

In this Hybrid Cloud Blog series, we intend to cover the following:

  • Master Data and Integration in Hybrid Cloud
  • Cross company processes in Hybrid Cloud
  • Central Shared services with Hybrid cloud
  • Hybrid cloud for Automotive/component manufacturing (usecases)
  • Corp and affiliates in Hybrid cloud
  • S4HANA MOVE Program and Hybrid cloud
  • Experience management in Hybrid cloud (usecases)
  • Analytics with SAP analytics cloud in Hybrid Deployment

Stay tuned for further blogs in this series, list growing below… and as always, keep your feedback flowing.

2 Master Data and Integration in Hybrid Cloud
3 Cross company processes in Hybrid Cloud
4 Central Shared services with Hybrid cloud
5 Hybrid cloud for Automotive/component manufacturing


For more information on SAP S/4HANA Cloud, check out the following links:

Follow us via @SAP and #S4HANA, or myself via @SDenecken

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      Author's profile photo Leona Lee
      Leona Lee

      Can you clarify what is this option " SAP S/4HANA OnPremise or SAP ERP ßàS/4HANA Cloud ?

      And if HEC deployment fall under which category ?

      Author's profile photo Sven Denecken
      Sven Denecken
      Blog Post Author

      HEC is IaaS - in cloud already part of it. For OnPremise customers can choose with SAP IaaS (=HEC) or hyperscaler - as we leave customers a choice,

      Author's profile photo Leona Lee
      Leona Lee

      Thank you very much Sven for clarification.