Difference between SAP S/4HANA On-Premise and SAP S/4HANA Cloud - SAP S/4HANA On-Premise Vs S/4HANA Cloud

SAP S/4HANA On-Premise Vs Cloud

SAP S/4HANA is an Enterprise Resource Planning (ERP) software package from SAP meant to cover all day-to-day processes of an enterprise (for example, order-to-cash, procure-to-pay, plan-to-product, and request-to-service) and core capabilities. It integrates functions from lines of businesses as well as industry solutions, and also re-integrates portions of SAP Business Suite products such as SAP SRM, SAP CRM and SAP SCM. As SAP Business Suite 4 only runs on the SAP HANA database it is packaged as one product: SAP S/4HANA.

To implement S/4HANA enterprise management by migrating an existing SAP ERP solution or if, you are considering a new implementation initiative, it is necessary that customers choose a deployment option that best suits their business needs, budget, and resources.

SAP S/4HANA can be deployed on two delivery platforms:

'On-Premise' for maximum control, and in the "Cloud" for fast time-to-value. Both have their pros and cons. Although, there is one more option: a hybrid delivery model that supports both on-premise and on-cloud scenarios.

SAP S/4HANA On-Premise edition is an internal platform, located on your servers, maintained by your company. SAP upgrades are released annually but have to be implemented and tested by your team.

SAP S/4HANA Cloud edition is Software as a Service (SaaS) hosted on SAP’s servers and is maintained by SAP. Software upgrades happen quarterly. The cloud version is available to enterprises in both private and public editions. While private cloud comprises complete S/4HANA functionality and also extends geographical reach, the public cloud helps address challenges in the LOB, overall strategy and ERP.

	SAP S/4HANA On-Premise	SAP S/4HANA Cloud Edition
1. Licensing Model	Traditional Licensing, which means a preliminary purchase with annual maintenance. The license fee allows the company to own the software and reduces the current maintenance fee. But the cost of the upgrade will be high.	Subscription Licensing, which means that one predictable monthly payment covers everything from infrastructure to system upgrades.
2. Infrastructure & Maintenance Model	On-premise edition, provides a high cost of entry and IT operations because of infrastructure needs and staff support as it's deployment and maintenance is implemented and managed by the IT staff of a customer	On the other hand Cloud Edition Doesn’t require you to invest in internal IT support, which ensures the smooth and stable operation of other IT applications and reduces expenses on IT staff as System infrastructure and maintenance are under SAP’s control
3. Speed of Innovation	Planning, testing, controlling, upgrading and changing within the system are the full responsibility of a customer	The automatic latest innovation upgrades happen quarterly without customer’s participation
4. Implementation Approach	High compliance with individual business requirements and customization	Predefined best-practice configuration with limited specialization
5. Functional Scope	Full ERP Scope, integration with SAP Hybris Marketing, SAP JAM and SAP Ariba Network	Cloud edition includes industry scenarios for marketing and the professional services industry. It also includes the most critical scenarios required to run the entire enterprise in the cloud using a digital core.  Key scenarios, Embedded ERP scenarios, integration with SAP SuccessFactors Employee Central, SAP Fieldglass, SAP Hybris Marketing, SAP JAM, and SAP Ariba Networks

When you sort out the main differences between delivery platforms, you can make a selection between editions best suited for your enterprise.

Choosing between On-Premise and Cloud

Who can choose SAP S/4HANA On-Premise Edition

SAP S/4HANA on-premise edition is suited for any industry enterprises which require a full range of features consolidated with highly flexible customization. This edition is perfect for large enterprises with very well-proven business processes.

For large, well-known enterprises, the on-premise platform fits the most. The system located on the company’s server provides opportunities for more effective monitoring and configuration than cloud edition.

Who can choose SAP S/4HANA Cloud Edition

Middle size companies who look for a light and flexible database platform to scale while growing should consider SAP S/4HANA cloud edition for their businesses.

On-cloud edition is the best option for companies that require a high-performance offer that covers their core business strategies, but at the same time provides greater agility, flexibility and faster upgrades cycle (quarterly rather than annually). SAP S/4HANA Cloud edition makes sense for rapidly developing enterprises who want a platform that can grow and change with their tempo.

Who can choose SAP S/4HANA Hybrid Model

As was mentioned at the beginning of the article, there is one more deployment option for customers who are interested in rapid business transformation with the reduced initial cost. A hybrid model that uses both on-premise and on-cloud editions enables to store of core data and applications on the organization’s hardware and at the same time, allows to change of the system and adopts new opportunities for business improvement without additional advance charges for a full-scale software license.

The SAP S/4HANA hybrid model is the convenient deployment option for companies who want to get two in one: flexible IT solutions and innovative business transformation under full control of core business applications.

Conclusion:

It is required for an organization to choose the right delivery platform. Because the right choice should help your business succeed and achieve planned goals. Therefore, organizations must spend quality time in designing a road-map.

Thanks for your valuable time and reading..!!!