S/4HANA Public Cloud vs Private Cloud
If you are using SAP products at the moment then you’re probably considering your next steps given the 2025 deadline (if so, you should read our white paper on the topic). Most SAP ERP is currently on-premise and SAP is heavily pushing these customers to consider its cloud solutions. SAP has been investing heavily in cloud recently and expanding its functionality (through acquisitions of companies like Ariba and SuccessFactors) to entice customers onto its platform.
But what SAP isn’t making clear is that S/4HANA Cloud is not the one-size fits all solution they make it out to be…
S/4HANA Cloud is SAP’s HANA-powered, in-memory ERP, cloud based, SAP application and the successor to SAP ECC. But that simple definition is concealing a more complicated truth – that S/4HANA Cloud is actually a brand name for two very different products.
S/4HANA Public Cloud
S/4HANA Public Cloud is a true SaaS where all customers share the same cloud. This makes it low-cost, efficient and scalable. Each customer uploads data and switches on or off the features required for their needs. If your business has fairly-standard processes or is able to adapt its processes quickly, then the time to live operation can be measured in weeks. SAP also manages the S/4HANA Public Cloud’s infrastructure and system maintenance for you, including your upgrades and patches.
All this together makes it sound like an ideal solution that reduces pressure on your business, but you should also be aware that S/4HANA Public Cloud is not a standard or full-featured version of S/4HANA:
- It offers fewer features (than S/4HANA Private Cloud) and minimal customization options, leaving the customer with a limited number of ERP features to choose from,
- Maintenance, upgrades, and patches are completely according to SAP’s schedule, with the customer having no control over the patching and maintenance process,
- There is a limited number of languages,
- It only offers support for a limited range of industries (manufacturing, professional services, sourcing and procurement, HR, sales support and financial services).
S/4HANA Private Cloud
The restricted functionality of S/4HANA Public Cloud will likely make it unusable for many organisation’s needs. This leaves you with the more expensive alternative, S/4HANA Private Cloud.
S/4HANA Private Cloud offers greater flexibility and functionality than S/4HANA Public Cloud. Each customer using S/4HANA Private Cloud has its own dedicated virtual private cloud, with no restrictions regarding whatever language, country or region is needed for business operations.
As with the S/4HANA Public Cloud, SAP manages the entire infrastructure for S/4HANA Private Cloud. But the S/4HANA Private Cloud customers have additionals controls over their upgrade schedule to ensure that there is minimal downtime or disruption to their business.
So which is better?
Regarding cost, S/4HANA Public Cloud is the much cheaper option, providing your business can live with the restrictions of its offering. But be warned, because additional restrictions built into both products may still make it unusable for many organisations.
SAP describe S/4HANA as the ‘successor’ to SAP ECC, though neither currently supports the industry solutions IS-Utilities, IS-Health or IS-Automotive, and neither S/4HANA Public Cloud or S/4HANA Private Cloud support migration from ECC to S/4HANA. If your business is looking to migrate from their existing SAP ECC system to S/4HANA then you will need to look at the significantly more expensive S/4HANA Enterprise Cloud or S/4HANA On-premise edition.
SAP has not provided any clear roadmap for the majority of its customers, leaving many scratching their heads about what their ERP strategy should be given the wide variety of options and often conflicting advice.
So what are your options? We’ve put together a white paper explaining the 2025 deadline and what SAP customers should consider when putting together their ERP strategy. You can read it for free here.