Two questions many clients are currently asking about SAP S/4 HANA’s on-premise and cloud editions are: what is the difference between them, and how do I know which one is right for my business?
One of the best things about SAP S/4 HANA’s delivery model is that it allows customers to align their choice of delivery – whether on-premise or on the cloud – with the needs of their business.
Some customers – particularly those in the mid-market – are looking for a more lightweight model, greater agility, and the ability to scale as they grow. For these customers, the cloud delivery model makes a great deal of sense.
For larger, more established enterprises, the on-premise delivery model makes sense. The fact that the system lives in-house instead of on the cloud allows for greater control and more customization to meet the needs of businesses whose processes are already well established.
There is a third group of customers as well, enterprise scale customers and others who are interested in rapid business transformation at a reduced up-front cost. A hybrid model – utilizing both on-premise and cloud delivery – allows them to maintain core data and applications in-house, while being able to leverage the cloud to quickly change and adapt to new opportunities for process improvement – such as incorporating mobile devices into their business processes – without the additional upfront expenses of a full-blown software license and implementation.
As for the differences between on-premise and the cloud, there are several obvious differences:
SAP S/4 HANA On-Premise Edition
- SAP S/4 HANA on-premise edition is an in-house application, hosted on your organization’s servers, maintained by your organization. Innovations are released yearly by SAP and implemented by your team.
- SAP S/4 HANA on-premise edition is very similar in terms of coverage, functionality, industries and languages as the current SAP Business Suite, but includes simplifications to SAP Simple Finance (or, SAP Accounting on the SAP HANA platform). It is also integrated with SuccessFactors Employee Central and the Ariba Network.
SAP S/4 HANA Cloud Edition
- SAP S/4 HANA Cloud edition is Software as a Service (SaaS) that lives on SAP’s servers and is maintained by SAP, with innovations applied quarterly.
- SAP S/4 HANA cloud edition includes industry-specific scenarios for marketing and the professional services industry. It also includes the most important scenarios needed to run an entire enterprise in the cloud with a digital core. Functionality offered includes finance, accounting, controlling, procurement, sales, manufacturing, plant maintenance, project system, and product lifecycle management, plus integration with SuccessFactors Employee Central, Ariba Network, SAP hybris Marketing, Field Glass and SAP JAM.
Three specific offerings are currently available as part of the SAP S/4HANA , cloud edition:
- SAP S/4HANA, cloud marketing edition – for the marketing line of business
- SAP S/4HANA, cloud project services edition – for the professional services industry
- SAP S/4HANA, cloud enterprise edition – for a full ERP scope
How do I know Which SAP S/4HANA Is Right for My Business?
The best way to figure out which SAP S/4HANA edition best suits your business is to determine which of these statements best describes your company:
The SAP S/4HANA, on-premise edition is the best fit for enterprises in any industry that need the full spectrum of functionality combined with a high degree of flexibility in customization.
Typically, these will be larger enterprises with very well established processes that they are not interested in changing.
The SAP S/4HANA, cloud edition is the best fit for companies that need a highly agile offering that covers their core business scenarios, yet offers more flexibility and a faster innovation cycle (quarterly as opposed to yearly). It’s perfect for businesses that are changing or growing rapidly and want a platform that can grow and change with them.
The SAP S/4HANA hybrid model is best for companies that need the best of both worlds: The ability to be flexible with their IT solutions and to innovate and transform their businesses while retaining control of core business applications.
Got more questions about which version of SAP S/4HANA is right for your business? Let us know in the comments.