SAP offers two Application Lifecycle Management (ALM) solutions for this: SAP Cloud ALM and SAP Solution Manager. As an ALM solution expert at SAP, I receive many questions from customers, and a critical example is: “What is the right ALM solution for me?” This blog post is the start of a series in which I plan to deliver an answer to this question. Here are the links to the other posts of the blog series:

• ALM for SAP S/4HANA Cloud – Which Solution Fits to Your Landscape?
• ALM for SAP S/4HANA Cloud – What are the costs?
• Task and Requirement Management – SAP Cloud ALM or SAP Solution Manager?
• Process Management – SAP Cloud ALM or SAP Solution Manager?
• Managing Custom Code – SAP Cloud ALM or SAP Solution Manager?
• Test Management – SAP Cloud ALM or SAP Solution Manager?
• Technical Change Control – SAP Cloud ALM or SAP Solution Manager?
• Analytics – SAP Cloud ALM or SAP Solution Manager?
• Application Operations – SAP Cloud ALM or SAP Solution Manager?
• Business Process Operations – SAP Cloud ALM or SAP Solution Manager?
• IT Service Management – SAP Cloud ALM or SAP Solution Manager? 
• Support Service Delivery – SAP Cloud ALM or SAP Solution Manager?

Have you subscribed to SAP S/4HANA Cloud? Perfect! But how do you manage the application lifecycle of the solution?

• Design your to-be business processes
• Build the required configuration
• Test to ensure that everything works as designed
• Deploy changes to the production system
• Detect incidents
• Analyze the root cause of incidents
• Correct business-related problems
• Automate problem resolution

The quick answer is easy: “It depends!”. Multiple aspects need to be considered. Let me use this blog post to guide you somehow on the decision: What fits best for you?

Which functional scope do you need?

Both SAP Cloud ALM and SAP Solution Manager are ALM solutions, but there is no feature parity. The ALM capabilities differ on the two ALM platforms. And some functions are provided only by one of the options.

SAP Cloud ALM provides standardized ALM processes that can be executed easily. And SAP Cloud ALM is open to integrate cloud services and 3^rd-party ALM tools via open APIs in the SAP API Business Hub. SAP Cloud ALM does not intend to do everything by itself.

SAP Solution Manager is different. It has been available for more than 20 years now while it has been enhanced with more and more features – a kind of ALM toolbox. You can flexibly select which tools to use for your individual ALM processes. But as always, increased flexibility brings more complexity.

A description of all the differences in detail would go beyond the scope of this blog post. For details, you can refer to the documentation of SAP Cloud ALM and SAP Solution Manager. I plan to publish multiple blog posts discussing the differences of individual capabilities.

But for now – think about how you want to approach your SAP S/4HANA Cloud implementation. The following table provides a high-level comparison of the two offerings:

I recommend asking yourself: How do we want to run our ALM processes? Do you prefer easier, standardized processes? Do you favor flexibility? Do you have special needs that require workarounds?

And just another thing to mention: SAP Cloud ALM is a cloud product. New features become available bi-weekly. Even if some capabilities are not available yet: They might be scheduled already before your project starts. Look at the SAP Cloud ALM road map for details.

Which SAP S/4HANA Cloud edition do you use?

Your SAP S/4HANA Cloud version affects your decision regarding SAP Cloud ALM or SAP Solution Manager as well.

The public SAP S/4HANA Cloud is a complete and modern SaaS (Software as a Service) ERP, offering a new implementation of predefined processes. The direct conversion of your SAP Business Suite is not supported. And there are fewer options regarding extensibility. Hence, you need less ALM support for these cases.

SAP S/4HANA Cloud, private edition allows you convert existing SAP Business Suite systems to SAP S/4HANA, and more business processes can be supported. There are more extensibility and custom code options to retain and protect previous investments. You might need more business process content and technical change control for your ALM platform.

Let’s take a quick look at the recommendation from this point of view (as of today):

• SAP Cloud ALM might be the preferred solution for public SAP S/4HANA Cloud.
• For SAP S/4HANA Cloud, private edition, whether SAP Cloud ALM or SAP Solution Manager is the better choice depends on the complexity of your transition project and the amount of custom code.
• Both SAP Cloud ALM and SAP Solution Manager support operations of SAP S/4HANA Cloud

Just for clarification: There is another ‘SAP S/4HANA Cloud’ that some customers talk about – the deployment of an on-premise SAP S/4HANA system on a hyperscaler or hosting partner. But this comes with a perpetual license instead of a cloud subscription. And you subscribe to the hyperscaler to provide the infrastructure as a service (IaaS) and deploy the SAP S/4HANA solution on it. From the ALM point of view, this is comparable with deploying SAP S/4HANA in your own data center. I am not discussing this scenario here.

Which costs occur?

Cost is always important. Two factors need to be considered while comparing SAP Solution Manager and SAP Cloud ALM: The cost for the entitlement and the cost for operating the ALM Solution.

Regarding entitlement: Usage rights for SAP Cloud ALM are granted by both SAP Enterprise Support, cloud editions (which is included in RISE with SAP contracts and SAP cloud subscriptions) and by on-premise SAP Enterprise Support contracts. SAP provides fair usage rights for SAP Cloud ALM. You can use it for free up to a baseline of 8GB SAP HANA memory, sufficient for almost every customer.

Usage rights for SAP Solution Manager are included in on-premise SAP maintenance agreements only. Customers with this agreement can use their SAP Solution Manager also for managing cloud services, like SAP S/4HANA Cloud. However, if you want to use SAP Solution Manager without having a valid SAP on-premise maintenance agreement, you can subscribe to the SAP Solution Manager for SAP S/4HANA Cloud offering of SAP Enterprise Cloud Services (HEC). This subscription includes not only the usage rights for SAP Solution Manager. It also covers the required hardware and technical operations.

The difference regarding cost for implementation, operations, and maintenance is significant. SAP Cloud ALM is a cloud solution where SAP covers the technical operations for you. And SAP deploys the latest software version daily. Your resources can concentrate on other tasks instead of deploying patches and SAP Notes for the ALM solution. Even the infrastructure is covered; SAP pays the fees for the hyperscaler where SAP Cloud ALM is running.

In contrast, SAP Solution Manager is an on-premise solution. You operate it yourself within your own data center or pay a partner for hosting. This means you must cover the cost for database and system administration, deployment of support packages and SAP Notes, depreciation/amortization of hardware, and so on. And even connecting managed systems, like SAP S/4HANA Cloud, to SAP Solution Manager is more expensive. SAP Solution Manager uses so-called agents for the connection. They need to be installed on the managed systems, which requires effort. In contrast, SAP Cloud ALM can communicate with the managed systems without deploying agents.

What is your solution landscape?

Your solution landscape has an impact on which ALM solution fits best as well. Which systems are relevant? Is your SAP S/4HANA Cloud system stand-alone? Is it integrated with other cloud services? Or is it running in a hybrid environment being integrated with some on-premise components? SAP Solution Manager can support almost all SAP components, while SAP Cloud ALM supports a smaller set of solutions today. Check the list of the currently supported solutions to see if SAP Cloud ALM offers the support you need.

Conclusion

In this blog post I have discussed four major questions to ask while selecting the right ALM solution for you:

• Which functional scope do you need?
• Which SAP S/4HANA version do you use?
• What is your solution landscape?
• Which costs occur?

The answers to these questions will give you rough guidance whether SAP Cloud ALM or SAP Solution Manager fits better for you. Each option has its pros and cons. Therefore, a more detailed analysis is required in most cases. As mentioned earlier: I plan to publish more on this topic soon. At the end, you will get your decision table to support your choice of the right ALM solution.

Next Steps

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Please feel free to add your thoughts and questions as comments below. This will help me find out which further topics are relevant for you. I might discuss them in one of the upcoming blog posts.

And stay tuned! I will include links to the other blogs of this series in this blog post when they become available. Just follow this blog post for updates. <go to next post of the series>

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