If your organization is using SAP products, you’re likely considering your next steps, given SAP’s 2027 upgrade deadline.
In recent years, SAP has been expanding its cloud solutions through acquisitions of companies like Ariba and SuccessFactors. Currently, most of SAP’s ERP software is on-premise, and SAP is heavily pushing these customers to move to its cloud solutions like S/4HANA.
S/4HANA is SAP’s HANA-powered, in-memory, cloud-based ERP solution and the successor to SAP ECC. However, SAP isn’t transparent about this being a one-size-fits-all solution. S/4HANA Cloud is a brand name that offers two very different products: the public cloud and the private cloud.
Key Differences
- Deployment – Public cloud runs on a shared SAP-hosted environment, while private cloud gives you a dedicated system just for your business.
- Customisation – Public cloud offers standardised processes for speed, whereas private cloud allows full tailoring for complex or industry-specific needs.
- Upgrades & Control – Public cloud updates automatically every quarter; private cloud updates are scheduled and fully managed by your team.
- Cost & Licensing –-Public cloud is affordable for standard processes, but migrating from ECC often requires private cloud or on-premise editions, which are significantly more expensive due to dedicated resources and full enterprise capabilities.
S/4HANA Public Cloud
The public cloud is a SaaS solution where all customers share the same cloud. This makes it low-cost, efficient, and scalable. Each customer uploads data and chooses the features they require for their organisation.
If your organization has standard processes or can adapt quickly, the time-to-live operation can be within weeks. SAP also manages the public cloud support, including upgrades and patches.
These factors make the public cloud sound like an ideal solution that reduces pressure on organisations. However, the public cloud is not the standard version of S/4HANA and limits organizations in the following ways:
- Fewer features and minimal customisation options
- SAP schedules when maintenance, upgrades, and patches are completed
- Lower number of language options
- Reduced range of industries is supported (manufacturing, professional services, sourcing & procurement, HR, sales support, and financial services)
The restricted functionality of the S/4HANA public cloud will likely make it unusable for many organizations’ needs. This leaves you with the more expensive alternative: the S/4HANA private cloud.
S/4HANA Private Cloud
The private cloud offers greater flexibility and functionality, and each customer using this version has their own dedicated virtual private cloud.
There are no restrictions regarding the language, country, or region needed for business operations.
Like the public cloud, SAP manages the entire infrastructure of the private cloud. However, private cloud customers have other controls over their upgrade schedule to ensure there is minimal downtime or disruption to their organisation.
Differences Between S/4HANA Private Cloud and Public Cloud
| Feature | S/4HANA Public Cloud | S/4HANA Private Cloud |
| Deployment | Multi-tenant, hosted by SAP | Single-tenant, dedicated environment |
| Customisation | Limited; standardised processes | Extensive; fully tailored to business needs |
| Upgrades | Automatic updates on SAP’s schedule | Scheduled updates controlled by the client |
| Cost | Lower, subscription-based | Higher, due to dedicated resources and customisation |
| Implementation Speed | Faster, pre-configured templates | Slower, due to customisation and complex setup |
| Control & Security | SAP-managed security; shared infrastructure | Full control over security, compliance, and infrastructure |
| Best For | Standardised processes, fast deployment, smaller teams | Complex processes, industry-specific needs, large enterprises |
| Cons | Limited customisation, less control over upgrades, not ideal for ECC migrations | Higher cost, longer implementation, requires internal management or support |
Which SAP Cloud is better for you?
The public cloud is a significantly cheaper option, provided your organization can manage the restrictions. However, additional restrictions and costs in both products may still make it unusable for many organisations.
SAP describes S/4HANA as the successor to SAP ECC, though neither currently supports the industry solutions IS-Utilities, IS-Health, or IS-Automotive. Also, neither the public cloud nor private cloud supports migration from ECC.
If you’re looking to migrate from your existing ECC system to S/4HANA, you will need to look at the significantly more expensive S/4HANA Enterprise Cloud or the on-premise edition.
SAP has continually moved the goalposts regarding its support for ECC. This has left many organizations wondering what their future ERP strategy should be.