What is S/4HANA?

What is S4HANA

SAP’s end-of-support deadline is coming; and it’s become the priority for every organisation running SAP software – HANA databases, ECC 6, SAP payroll, etc. – to make an important decision: Upgrade to S/4HANA (now or later) or stick to what you have?

It’s not a decision to be made lightly. That’s why, in this series, we’re exploring three key areas around SAP’s S/4HANA product and its deadline:

  1. What is S/4HANA?
  2. The S/4HANA deadline
  3. Your options

Want the full story? We’ve written a full guide on SAP S/4HANA, the deadline, and your options: click here to download your copy.

What is S/4HANA?

An in-memory database…
S/4HANA is SAP’s new generation of their Business Suite, written for the existing SAP HANA platform.

…with an embedded ERP
S/4HANA is an entire system with ERP built into it. Theoretically, it provides all an organisation needs – software, applications, storage and functionality – in one, vast model.

There is a large ‘however’ coming. SAP haven’t released just one S/4HANA product, though they are in the habit of marketing S/4HANA as one product.

But S/4HANA is, in fact, three, separate products:

Option 1: S/4HANA Public Cloud

A Software as a Service (SaaS) product, where all customers access the software in the Cloud, upload their data, and select what feature(s) they need, when they need them.

Some important factors to consider:

  • Only a limited number of ERP features are available
  • Maintenance, upgrades, and patches are done according to SAP’s schedule, not yours
  • Features just a limited number of languages; a potential problem for international enterprises
  • Support is only available for a limited range of industries

These restrictions can make it unsuitable for many organisations; who will, therefore, need to evaluate SAP’s larger, more expensive, S/4HANA Private Cloud (which is rather convenient. For SAP, anyway).

Option 2: S/4HANA Private Cloud

Like the Public Cloud; SAP still manage 100% of the software; but update schedules are agreed with the customer, helping you minimise downtime or disruption to your business.

S/4HANA will support more languages, countries, and regions, plus some modifications and customisations are allowed on the Private Cloud. The costs will increase as a result, as it becomes harder for SAP to manage.

Option 3: S/4HANA On-Prem

Existing SAP customers may recognise this version: an on-premise ERP where you can determine your own on-premise hosting; or in the Cloud of your choice (as long as it supports S/4HANA’s requirements).

On-premise S/4HANA does allow customisations and modifications, but support costs will be higher, as any customisations you’ve made need to be factored into every patch and update.

S/4HANA’s branding seems to be intentionally confusing

SAP have predominately been pushing the Cloud-based products – after all, they would prefer their customers to be on their Cloud, not a competitor’s.

And SAP’s efforts have worked. People do tend to think of S/4HANA as Cloud-only and are therefore concerned by problems such as migration troubles, and Cloud lock-in, etc.

S/4HANA does include an on-premise edition, but this may not be a source of relief. Any organisations who wish to upgrade to S/4HANA, but cannot justifiably afford the on-premise version, face the same challenges as those who believe S/4HANA is Cloud only.

Why have SAP released S/4HANA?

Existing SAP customers may question their vendor’s decision – especially when their current products are working fine. The simple answer is, SAP can benefit from it:

  • Cost: It’s cheaper to run one product, after all, and the end-of-support deadline also cuts costs of supporting legacy products (whether SAP’s customers will receive any benefit from SAP cutting costs remains to be seen).
  • Innovation: S/4HANA allows SAP to dedicate their resources onto one core element. Theoretically, this is their chance to make one thing, really well.
  • Independence: Some of SAP’s existing customers still host their SAP applications on Oracle or Microsoft databases, which means that part of SAP’s revenue is going to the hosts. S/4HANA will change that, as it will necessitate migrating to an SAP database, therefore increasing SAP’s income.

Learn more about S/4HANA

What we’ve provided here is a brief overview of what S/4HANA is (specifically clearing up the three variants of S/4HANA that SAP have merged together in its marketing), and why SAP have released it.

If you’d like a more detailed overview, we have published a guide detailing the full SAP S/4HANA story and what your options are as a SAP customer: