SAP S/4HANA Cloud and On-Premise Deployment Options

[Amin-Hoque]

Last updated: Jan 26 2024 (Updated links)

This blog targets SAP solution architects and explains the different deployment options for SAP S/4HANA. I have used the latest terminology. It covers cloud, on-premise and hosted deployment options. Here are the options discussed:

1. SAP S/4HANA Cloud, public edition: This is SaaS public cloud.

2. SAP S/4HANA Cloud, private edition

3. SAP S/4HANA On-Premise managed by SAP (HEC)

4. SAP S/4HANA On-Premise: On-Premise or managed by cloud provider Hyperscalers

Deployment options 1 and 2 are the most commonly positioned options for new SAP customers.  Option 2 is available through a RISE with SAP contract.  Option 1 is available through a GROW with SAP contract.

I cover the following aspects of each option: infrastructure, license, how upgrades are managed, scope (functional, country and industry), configuration, extensibility (how solution can be extended beyond configuration) and implementation (possible approaches). All options can be implemented by the customer, SAP or a partner.

I also cover which roadmap of the SAP Activate implementation methodology is relevant, what SAP Best Practices are used and what tools are relevant. See my other blog for an overview of SAP Best Practices and the SAP Enterprise Management Layer.

 

1. SAP S/4HANA Cloud, public edition 

Commonly used by net new customers that want the full public cloud approach with regular upgrades that include new configuration and new software. This is a SaaS public cloud offering. Also used for subsidiaries alongside SAP on-premise implementations.

• Infrastructure: public cloud shared with other customers and hosted and operated by SAP only

• License: subscription for Software as a Service (SaaS) available as RISE with SAP or for new customers in the mid market through GROW with SAP.

• Upgrades: managed by SAP. fixed and mandatory (configuration and software). The upgrade of configuration is unique to the public cloud edition. SAP and customer do automated and manual regression tests.

• Scope: core ERP (subset of full ERP), specific industries and 59 countries.

• Extensibility: key user (in-app) extensibility, developer extensibility and extensions through SAP Business Technology Platform Extension Suite (side-by-side extensibility) with whitelisted APIs.

• Configuration: use SAP Central Business Configuration and Self Service Configuration User Interfaces (SSCUIs) based on fit-to-standard workshops in the Explore phase

• Implementation: greenfield only (new implementation)

• SAP Activate roadmap: SAP Activate Methodology for SAP S/4HANA Cloud

• SAP Best Practices: scope is selected from these cloud-specific Best Practices.  https://me.sap.com/processnavigator/SolS/EARL_SolS-013/2402?region=DE

• Partner content: partners can add configuration manually.

• Use SAP Cloud ALM for Application Landscape Management.

Unlike all the other deployment options, the user interface is purely Fiori and configuration is done using SAP Central Business Configuration and not through the IMG.

 

2. SAP S/4HANA Cloud, private edition 

Has advantages of the cloud with the scope and flexibility of the on-premise solution. Existing SAP ECC customers can move to private cloud using a system conversion and retain their configuration and extensions. Has standardized infrastructure processes, services and SLAs.

• Infrastructure: dedicated landscape on cloud infrastructure operated by SAP and running at a Hyperscaler e.g. Microsoft Azure, AWS, Google Cloud)

• License: subscription for software but not SaaS (available as RISE with SAP).

• Upgrades: available like on-premise but you chose your own speed but must stay in mainstream support. The customer must manage the upgrade process. SAP does specific technical  aspects of the upgrade only.

• Scope: on-premise S/4HANA functional scope. 64 countries, 39, languages and 25 industries. Some third-party add-on limitations.

• Extensibility: key user (in-app) extensibility, developer extensibility and extensions through SAP Business Technology Platform Extension Suite (side-by-side extensibility). Classic ABAP extensibility is still available but modifications are not recommended.

• Configuration: use the IMG based on fit-to-standard workshops in the Explore phase.

• Implementation: greenfield (new implementation), system conversion or selective data transition

• SAP Activate roadmap: SAP Activate Methodology for SAP S/4HANA Cloud private edition

• SAP Best Practices: SAP Best Practices are available. Enterprise Management Layer is available for a production system  Note: the on-premise Best Practices are used.  https://me.sap.com/processnavigator/SolS/EARL_SolS-055/2023?region=DE

• Partner content: partners templates allowed.

• Customers use SAP Solution Manager and/or Cloud ALM to manage their project design.

Also see this blog on the 5 golden rules to adopt some of the lessons learnt from public cloud. https://blogs.sap.com/2018/07/28/the-5-golden-rules-for-implementing-sap-s4hana-cloud-single-tenant-...

 

3. SAP S/4HANA On-Premise managed by SAP (HEC)

An on-premise solution with individual and private hardware and infrastructure hosted by SAP or a hyperscaler. Infrastructure management is delegated to SAP with flexible service offerings. This can be used for combinations of solutions that are not available in SAP S/4HANA cloud, private edition.

• Infrastructure: customer specific landscape on SAP HANA Enterprise Cloud (HEC) in SAP data centre or at a hyperscaler

• License: infrastructure subscription

• Upgrades: you choose your own speed of adoption of software upgrades. Customer is responsible for managing the upgrade.

• Scope: full S/4HANA functional, country and industry scope and partner add-ons

• Extensibility: customization, modification, and extensibility possible as with ERP

• Configuration: use the full IMG based on a fit-to-standard approach in the Explore phase

• Implementation: new implementation, system conversions or selective data transition

• SAP Activate roadmap: Transition to SAP S/4HANA

• SAP Best Practices: all SAP Best Practices are available. https://me.sap.com/processnavigator/SolS/EARL_SolS-055/2023?region=DE

• Partner content: partner templates allowed.

• Customers use SAP Solution Manager to manage their project design. Most customers use SAP Best Practices activated using SAP Solution Builder or set up by SAP through the "Enterprise Management Layer" service.

 

4. SAP S/4HANA On Premise: On-Premise or managed by cloud providers Hyperscaler

Classic on-premise SAP S/4HANA managed by the customer in their own data centre or managed by a third party.

• Infrastructure: customer data centre or hosted by hyperscaler (e.g. e.g. Microsoft Azure, AWS, Google Cloud)

• License: perpetual or Bring Your own License

• Upgrades: you choose your own speed of adoption of software upgrades. Customer is responsible for managing the upgrade..

• Scope: full S/4HANA functional, country and industry scope and partner add-ons

• Extensibility: customization, modification, and extensibility possible as with ERP

• Configuration: use the full IMG based on a fit-to-standard approach in the Explore phase

• Implementation: new implementation, system conversions or selective data transition

• SAP Activate roadmap: Transition to SAP S/4HANA

• SAP Best Practices: all SAP Best Practices are available. https://me.sap.com/processnavigator/SolS/EARL_SolS-055/2023?region=DE

• Partner content: partner templates allowed.

• Customers may use SAP Solution Manager to manage their project design. Most customers use SAP Best Practices activated using SAP Solution Builder or set up by SAP through the "Enterprise Management Layer" service.

 

Which Deployment Option is Right?

The SAP Activate roadmap has 3 approaches to implement SAP S/4HANA:

1. New implementation (also known as greenfield)
2. System conversion (also known as brownfield)
3. Selective data transition.

New implementation: for new customers or existing customers that want to reset and start again with a clean system.

System conversion involves converting your existing ERP system into SAP S/4HANA by migrating the database, applying software updates and doing a data conversion from the old data model to the new S/4HANA data model. The system must be converted to S/4HANA in one go meaning a single big bang go-live.

In the “selective data transition” approach, configuration and custom code from your old ERP system are used in the new SAP S/4HANA instance. For example, this can be done with a "shell copy" of the old system that leaves all master and transaction data behind and is followed by a system conversion to S/4HANA.

What will influence your choice of deployment option? Organizations that are completely new to SAP will do a new "greenfield" implementation and can choose any option 1 to 4. What about if you are currently running the on-premise ERP ECC and want to move to S/4HANA?

• The route selected by 50% of customers is a "system conversion" where your existing system is converted to S/4HANA. This means option 2, 3 or 4.

• If you want to start again on a new page and do a "new implementation", you can choose any deployment option. Note: option 1 may not cover all the processes and scope in an existing SAP ERP ECC solution.

• The "selective data transition" approach allows you to take some of your existing solution into a new S/4HANA instance. Option 2, 3 or 4 can be used.  Around 5% of customers choose this approach.

See me related blog on moving to S/4HANA from ERP: https://blogs.sap.com/2019/10/30/how-to-move-to-sap-s4hana/.  This blog may also be helpful:https://blogs.sap.com/2020/05/11/sap-s-4hana-deployment-on-hyperscalers/

When using the Transition to SAP S/4HANA SAP Activate roadmap, you can select the approach e.g. system conversion in the search tags. 

Note: there is an option called SAP S/4HANA Cloud, extended edition but this is no longer available for customers buying SAP S/4HANA now. This was an earlier variation on SAP S/4HANA Cloud, private edition.

I hope you found this blog informative.

Amin Hoque
Enterprise Architect at SAP Services UK

[MartaC]

Hello Amin,

Until now, S/4HANA Cloud extended edition, has mandatory upgrades every 2 years as of April.

S/4HANA Cloud Private Edition, has mandatory upgrades every 5 years.

Is it the same 5 years period,  for S/4HANA Cloud extended edition now?

And in which contractual document is it specified?

Thanks

Kind regards

Marta

 

[Amin-Hoque]

Hello Marta

I checked FAQs and updated the blog.  S/4HANA Cloud extended edition must be upgraded at least once every 2 years. S/4HANA Cloud Private Edition must stay in mainstream maintenance which is an upgrade within 5 years.

For questions on where this documented in a contract, please contact your SAP Account Executive.

Kind regards

Amin Hoque.

[kane_xin]

Hi Amin:

Thank you for your helpful info, may I ask a question:

How to proceed the system conversion from ECC 6 to SAP S/4HANA Cloud private edition ?

And any difference between conversion to OP, any guide book for it, thanks.

 

Best Regards

[Amin-Hoque]

Hello Kane

The best place to look is the SAP Activate roadmap that is specific to SAP S/4HANA Cloud Private Edition.

https://go.support.sap.com/roadmapviewer/#/group/658F507A-D6F5-4B78-9EE1-0300C5F1E40F/roadmapContent...

Roland Hamm's blog is a good place to look:

https://blogs.sap.com/2016/11/02/sap-s4hana-system-conversion-at-a-glance/

You may find more information here:

https://launchpad.support.sap.com/#/notes/2924833

 

Kind regards

Amin Hoque.

[former_member757845]

Thank you for creating this highly useful summary and keeping it up-to-date. I don't understand why SAP does not have this as a handy table on their S/4HANA product page. When I buy consumer electronics you get these handy tables comparing everything side by side. I suppose there are commercial reasons for wanting to keep it 'cloudy' (pun intended) and speak to their potential buyers first.

I would like to point out a minor update I noticed that has not yet been updated here:

"As of March 2021, SAP HANA Enterprise Cloud, customer edition, is now known as
SAP S/4HANA Cloud, private edition, customer data center option."

Source: SAP HANA Enterprise Cloud, Customer Edition, Launched | SAP News

Kinds regards, WJ

[Amin-Hoque]

Hello WJ

Thank you for the feedback. I will forward this onto our Solution Management team.

Also thank you for the minor update!  I have updated the name as you suggested.

Kind regards

Amin Hoque.

[Renan_Correa]

Thanks for this post, for an implementation consultant it's pretty difficult to follow all the product re-namings that happen every year.

Basically I see 2 Products (S/4HANA cloud and S/4HANA on-Prem) with three options to deploy (Public, private and on-prem), but with several ramifications between them with differences in tenants and licensing that change the name of what would be the same core product.

I hope in the near future SAP unifies "S/4HANA Cloud Cloud" and "Cloud extended" in one single thing. I do not know pricing (I just know they are all different materials in price list), but from a functionalities perspective there is not much advantage of Cloud extended over public cloud ( and no advantage over private/on-prem ), if the customers really need more flexibility t the Private option would allow much more than cloud extended.

[Amin-Hoque]

Hello Renan

There are two different solutions from a functionality and scope perspective:

1) SAP S/4HANA Cloud (public) which is a restricted version of the full S/4HANA version

2) On-premise and all the others options including Cloud Private Edition and Cloud Extended edition that offer the full unrestricted functionality.

Each cloud deployment option provides a different scope of services from SAP.  If you want to do a system conversion from an existing SAP ERP system you must choose one of the on-premise deployment options or SAP S/4HANA Cloud Private Edition.

Kind regards

Amin Hoque.

[Renan_Correa]

Hi Amin,

thanks for the additional comments. It clarified a bit further the naming, I now get what S/4HANA  cloud extended is.

In general industry terms we could say that S/4HANA cloud is a public cloud solution and all the other options are Private cloud options ( with several variations in licensinsing like SaaS or perpetual license, extensibility options and deployment/implementation models ).

That's a bit easier to sell and explain from my perspective.

Regards,

Renan Correa

[Shobhitt99]

amin.hoque : Thanks for sharing this blog. I am few question.

1. We already have S4HC-Essential Subscription and used by business. Now business is asking for more flexibility in terms of functionality. What is the possibility to migrate from S4HC- Essential to S/4 Private cloud edition?


2.  If there is no direct migration path, will sap provide the data/configurations in form of Files & transports to be restored in new environment.


3. For the greenfield implementation of S/4 Private we want to activate the same scope items that we have in S4HC-Essential template. Will the Explore phase and Fit to standard will be skipped?


4. What are the migrations tools available or Can be used (automatically or manual) for moving our data from S4HC-Essential to S/4 Private.

[Amin-Hoque]

Hello Shobhit

You should contact your SAP Account Executive (AE) to change your subscription from Essentials Edition to S/4HANA Cloud Private Edition.  They will also get the latest information for you.  There is no generic answer and you must contact SAP to understand the best options for you.

1. In June 2021, there were no tools to move to Private Edition and no direct migration path.  You should check with your AE in case anything has changed.
2. In June 2021, there was no way to export and then import the configuration. You can “activate” a baseline of configuration scope items in Private Cloud (called the Enterprise Management Layer).  
3. There will be some Explore phase.  You should assess whether to a) re-use existing design or b) just start again e.g. to take advantage of delta features in Private Cloud
4. Master and Transaction data can be moved starting with a download of data from SAP S/4HANA Cloud using using Customer Data Return .  Business data can be uploaded to the S/4HANA Cloud, private edition using
   SAP S/4HANA migration cockpit.

I hope this helps

Amin Hoque

[2mvandeven]

Hello Amin,

Thank you for the blog and for keeping it up to date. With all these name changes by SAP it can be hard to keep up. This blog has been helpful to me multiple times already.

Kind regards,

Martijn van de Ven

[scattola]

Hy Amin,
very interesting article.

Could you tell me if there is a difference in software version between the CLOUD solutions (solutions 1., 2. and 3.) and the ON PREMISE solutions (solutions 4. and 5.)?

The solution "3. SAP S / 4HANA Cloud private edition" what software version does it provide?

Thanks,
Alessandro

[Amin-Hoque]

Hello Alessandro

SAP operate a cloud first strategy. This means new software features (and any matching configuration) are developed for the regular releases of SAP S/4HANA Cloud.  This is option 1 = Public Cloud.  There are multiple software releases per year e.g. release 2111.

All the other options (2 to 5) operate on the same software "stack" with the same release strategy. For this stack, most software updates come in one major software release per year e.g. release 2021. Most (but not all) changes in SAP S/4HANA Cloud make it to this "stack".

Option 1 has a smaller scope available than the other options. There is a single S/4HANA code line but with two different sets of active scope.

Hope this helps

Amin Hoque.

[johnk1000]

Really clear article, Amin & thank you for updating this as time has gone by.

Do we know if any of the S/4 HANA Compatibility Pack Solutions can be deployed on either Cloud Extended Edition or Cloud Private Edition?

I have a client who may need to have CP-SAP Remote Logistics Management compatibility on a target S/4 architecture in order to accommodate their existing Business Suite IS-OIL & Remote Logistics Management functions. I'm wondering if that restricts their deployment options to only the following:

4. SAP S/4HANA On-Premise managed by SAP (HEC)

5. SAP S/4HANA On-Premise: On-Premise or managed by cloud provider Hyperscalers

Regards, John

 

 

[Amin-Hoque]

Hello John

Not a simple answer.  Some Compatibility Packs are available in SAP S/4HANA Cloud Private Edition if the right license is in place but other Compatibility Packs are not.  You will need to contact an SAP cloud architect through your Account Executive.  There does not seem to be any public information on this is SAP note: 2269324 which is the place to go for the latest Compatibility Pack information.

Kind regards

Amin Hoque.

[johnk1000]

Hi Amin,

Thank you for the quick reply on this. We're keen to understand if we have a potential Cloud deployment route vs what feels like a less strategic S/4 On-Prem implementation for this specific customer, so I will do as you say and engage our Account Executive.

Much appreciated and keep up the excellent blogs content,

Regards,

John

 

[former_member5397]

Hi John,

Happy to discuss further.

Thanks,

Alistair

[Tobias_Mache1]

Hi,

can a customer go to the S/4HANA Cloud PCE without Rise with SAP?

[Amin-Hoque]

Hello Tobias

As a licensing question this kind of thing is subject to change and therefore it is not wise for me to answer via a blog. Please contact your Account Executive or Partner Manaher.

Kind regards

Amin Hoque

[AdilZafar]

Hi Amin

That is an ambigious answer and would start to concern any Partner.

We are told that RISE with SAP holds two offerings S/4HANA Public Cloud and Private Cloud (PCE) and this is the only allowable offering from a GTM perspective.

We are told there is no other offering in the Market from SAP.

Can you please elaborate on your statement above?

Many thanks

Adil Zafar

[Amin-Hoque]

Hello

There are no changes to the current offerings that I am aware of as a SAP consultant.  My answer is not supposed to raise any concerns at all. It is just best practice from our side that we do not deal with any license topics via blogs.

Kind regards

Amin Hoque.

[former_member720370]

Hi Amin,

I am in a situation where we want to connect a non-SAP system with PCE through interfaces, and we are not familiar with PCE.

My question is how can we do this? What should we do in PCE? Is it the same as in OP (Create Web Service or Via PO)?

[Amin-Hoque]

Hello

This is a big topic and you should get consulting advice.  The usual solution is to use the Business Technology Platform Integration Suite (previously called Cloud Platform Integration).

https://help.sap.com/viewer/product/SAP_CLOUD_PLATFORM_INTEGRATION_SUITE/sap.cp.integration.suite/en...

https://open.sap.com/courses/cp9

Kind regards

Amin Hoque.

[SriKrishna]

Hello Amin,

 

is there any SAP document or link or presentation, where the comparison of various editions is documented ? for reference 🙂

[SriKrishna]

Hello Amin,

Please share any link for SAP S/4 HANA Cloud editions comparison document , as the naming convention is changing often 🙂

[Amin-Hoque]

Hello

You would need to contact your Account Executive or Partner Contact at SAP to get a presentation like this.

Kind regards

Amin Hoque.

[sandeep_ranade]

Hi Amin,

In case of Private cloud edition & extended cloud edition, Scope, Configuration, Best-practices follows same principle as that of On-premise version.

In that case with respect to Private cloud edition, can you please clarify on below queries?

1. Whether Private cloud will have functionality like Advanced Financial Closing (AFC), which is cloud based or it will be Financial Closing cockpit (FCC) which is for On-premise.

2. These editions are named cloud only based on licensing which is subscription based.

3. While looking for API should we look for On-premise based  (https://api.sap.com/products/SAPS4HANA/overview) or Cloud based (https://api.sap.com/products/SAPS4HANACloud/overview)

1. Scope: same S/4HANA functional scope as on-premise.

2. Configuration: use the IMG based on fit-to-standard workshops in the Explore phase.

3. SAP Best Practices: all SAP Best Practices and Model Companies6 are available for sandbox systems. https://rapid.sap.com/bp/BP_OP_ENTPR

Regards

Sandeep

[WaldemarFal]

Hi Amin, this is very good read. I maybe found some inconsitencies, like:

• for on-prem and private cloud with IMG not only Fit-To-Standard but also Fit/Gap approach was possible;


• Selective data transition has two ways - one with system conversion though;


• yopu wrote that in hosted on prem Best Practices are not available, are you sute? It can be taken via copy o


• After all majority of the projects shall we say 90 are roll-outs into one S4H system, is the roll-out (similar to selective data transition) for any model impossible?

Look forwward to hering your comments

Cheers,

 

Waldemar

[Amin-Hoque]

Hello

Thank you for your feedback.

In SAP Activate, we now only refer to the Fit-To-Standard approach.  The term Fit/Gap analysis is not longer used.

I have adjusted Selective Data Transition section.

Changed hosted on prem Best Practices

Roll-outs are not possible with System Conversion: the whole system is converted with one big bang.

Kind regards

Amin Hoque.

[Martin_Baeuml]

Hi Amin,

thanks for this blog. From my perspective it needs to be updated because the go-to market of SAP sales people tells a different story. In focus are two versions:

1. Public Cloud (respective SAP S/4HANA Cloud)
   
   
   
   • SAAS solution, hosting by SAP only
   
   
   • Strategic choice for companies ready to embrace the future of ERP with a new implementation and pre-defined content
   
   
   
   


2. Private Cloud (respective SAP S/4HANA Cloud, Private Edition)
   
   
   
   • Not SAAS, hosting by SAP, hyperscaler or even customer
   
   
   • Designed to provide innovation and cloud value while allowing customers to retain their investments by converting existing system(s) and / or takeover configuration and data.
   
   
   
   

Anything else is already confusing enough and a subset of above. For example:

• The "SAP S/4HANA Cloud, Extended Edition" was replaced by "SAP Extended Services for SAP S/4HANA Cloud, Private Edition"


• Enterprise Management Layer is a subset (or even product of SAP S/4HANA Cloud, private edition)


• Private Cloud is nothing else than former "on-premise"

Regards
Martin

[Amin-Hoque]

Hello Martin

Thanks for feedback.  I have made some updates.  Yes, Extended Edition is no longer positioned for new customers but customers are still running on it.  HEC is less common but again some customers are running on it.  New customers are pointed at S/4HANA Cloud or S/4HANA Cloud, private edition.

Kind regards

Amin Hoque.

[sanusugathan1]

Is there any extensibility hard limitations between S/4HANA Cloud, private edition and S/4HANA On premise?

[Amin-Hoque]

Hello Sanu

There is no difference in extensibility between S/4HANA Cloud, private edition and S/4HANA On premise

Kind regards

Amin Hoque

[former_member73766]

When we are looking to sizing perspective, if I have same system same S4 version, I need same sizing config as my on premise? or Private cloud machine need to run any other applications that consome more hardware?

 

Regards

Rafael

[Amin-Hoque]

Hello Rafael

Although S/4HANA Private Cloud is similar to On-Premise, you must contact your Hyperscaler on sizing. If you are considering RISE with SAP S/4HANA you can talk to your RISE S/4HANA Cloud Architect.

Kind regards

Amin Hoque.

[fpeniche]

Hello Amin,

 

thanks for sharing this information, very helpful as navigating these SAP options could be quite confusing. I have a question regarding 3. SAP S/4HANA On-Premise managed by SAP (HEC).

When you say this can be hosted in your own data center, what exactly do you mean? My understanding is that this option can only be hosted in either SAP or a hyperscaler, is that not right? Can the customer also host this option in their own premises? If yes, can you please elaborate a bit more?

Thanks,

regards Fernando

[Amin-Hoque]

Hello Fernando

Thank you for your question. This was an option that used to be available but no longer is.  I think it was called "Bring Your Own License for HEC".  I have updated the blog to remove this in the initial paragraph. I had already removed this in the bullet below.

Many thanks

Amin.

[LeonievB]

Hi Amin,

since I see that you update your blog post regularly, may I suggest another update for completeness? 🙂

For option 2, RISE with SAP, private edition, there actually also is a customer data center option available, too. It allows customers to leverage all the benefits of RISE with SAP in the data center of their choice (own or co-lo). For this option, SAP collaborates with 3 vendors at the moment: Dell Technologies, HPE and Lenovo. See more information here: Customer data center option | RISE with SAP

This option is less known but very interesting for many customers, especially those who have special requirements regarding security, data sovereignty or latency. Sometimes this RISE with SAP, PE-CDC option is positioned as if it was available to very specific types of customers only but that's not the case.

Best regards

Leonie

[isbasis]

Hello Amin & members,

Very good insight.
I particularly wanted to know whether having the HANA database on premise and application servers on the cloud is an option (in line with GDPR and other compliance requirements).
Is there any such offering/option from SAP?

Also, is there any latest (2024) documentation/video from SAP with respect to the different cloud options?

Suraj