If you are using SAP products, you’re probably considering your next steps given the 2025 deadline (read this guide for further guidance). Most of SAP’s ERP software is currently on-premise. SAP is heavily pushing these customers to consider its Cloud solutions. SAP has been investing a lot in Cloud recently. It has also been expanding (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 a one-size-fits-all solution…
It’s SAP’s HANA-powered, in-memory, Cloud based ERP solution and the successor to SAP ECC. But that simple definition is concealing a more complicated truth. S/4HANA Cloud is actually a brand name for two very different products.
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 features required for their needs. If your organisation has 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 Public Cloud’s support, including upgrades and patches.
All this together makes it sound like an ideal solution that reduces pressure on your business. However, Public Cloud is not a standard version of S/4HANA:
- It offers fewer features (than S/4HANA Private Cloud) and minimal customisation options, leaving customers with a limited number of features to choose from
- Maintenance, upgrades, and patches are completed according to SAP’s schedule; the customer has no control over support
- There is a limited number of languages
- It only offers support for a limited range of industries (manufacturing, professional services, sourcing & 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 organisations’ needs. This leaves you with the more expensive alternative: S/4HANA Private Cloud.
Private Cloud offers greater flexibility and functionality than Public Cloud. Each customer using this version has their own dedicated virtual private Cloud. It comes with no restrictions regarding the language, country or region needed for business operations.
As with the Public Cloud, SAP manages the entire infrastructure for Private Cloud. However, Private Cloud customers have other controls over their upgrade schedule to ensure that there is minimal downtime or disruption to their organisation.
So which is better?
Regarding cost, the Public Cloud is the much cheaper option, providing your business can live with the restrictions. But be warned – 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. Public Cloud and Private Cloud also do not support 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 not provided any clear roadmap for the majority of its customers. This has left many scratching their heads about what their ERP strategy should be.