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A buyer's guide to S/4HANA Cloud Private Edition

S/4HANA Cloud Private Edition is best for users who need greater flexibility and are willing to pay a bit more for it. Learn whether it's right for your company.

Company leaders attempting to decide if S/4HANA Cloud Private Edition is right for their organization should begin by learning about S/4HANA as a whole.

Currently, SAP offers five different versions of S/4HANA, including options for cloud and on-premises editions, as well as hybrid scenarios. The multi-tenant version of S/4HANA Cloud offers a limited feature set and virtually no customization options. SAP also offers several AnyPremise variants, which are highly flexible. They include multiple deployment options, full integration capabilities and full customization capabilities, as well as SAP's complete range of ERP functionality. S/4HANA Cloud Private Edition is a middle-of-the-road choice. The software is best for users who need a broader range of features and greater flexibility and are willing to pay a bit more for it.

What is S/4HANA Cloud Private Edition?

SAP introduced S/4HANA Cloud Private Edition in 2021 after users complained that S/4HANA Cloud Extended Edition (EX) didn't offer enough integration and customization flexibility. Many SAP users were avoiding switching to the standard S/4HANA Cloud and Extended Edition because of the difficult migration from an existing SAP R/3 or ECC system.

Private Edition possesses much of the S/4HANA Cloud and Cloud EX's simplicity and standardization. However, SAP has further expanded customization options for Private Edition, giving users greater control over their ERP environment.

S/4HANA Private Edition allows the use of partner templates, making it easier and more efficient to build out an environment based around third-party intellectual property. In addition, Private Edition supports a system conversion or selective data transition from a preexisting SAP environment, so it's likely to be the default option for SAP users who want to migrate to an S/4HANA cloud version.

Functional scope

Like the Extended Edition, S/4HANA Cloud Private Edition includes the complete range of SAP's ERP features, including localization and best practices for 64 countries. Private Edition is available in 39 different languages and offers vertical functionality for 25 industries.

Companies can integrate S/4HANA Cloud Private Edition with SAP SuccessFactors Employee Central, which handles HR; Fieldglass, which handles vendor management; Hybris, which handles e-commerce and CRM; and Ariba Network, which handles procurement and supply chain management.

Extensibility

Extensibility is one area where S/4HANA Cloud Private Edition rises above Extended Edition and the entry-level Cloud edition. However, Private Edition is still not as flexible as the higher-end S/4HANA AnyPremise versions.

Like the Extended Edition, S/4HANA Cloud Private Edition allows ABAP extensions and side-by-side development. However, S/4HANA Cloud Private Edition permits additional customization as well, including modifications, or code changes that alter SAP's core functionality.

Partner-developed content is significantly easier to deploy in this version. Extended Edition users must add configurations manually, while Private Edition allows the use of partner templates. Implementation is faster because of this.

Licensing

Although some of the more complex S/4HANA configurations offer a perpetual license option, S/4HANA Cloud Private Edition is available on a subscription basis only and is only available as a SaaS product.

Who manages the environment?

Like the Extended Edition, S/4HANA Cloud Private Edition is deployed in a dedicated environment, so companies don't share the space with other users. However, the system can no longer be hosted on SAP servers because it's less standardized than S/4HANA Cloud EX. Instead, S/4HANA Cloud Private Edition must be hosted at one of the SAP-approved hyperscalers such as Microsoft Azure, AWS or the Google Cloud Platform.

Like its lower-end siblings, S/4HANA Cloud Private Edition is still managed by SAP.

Suitable implementation scenarios

While the entry-level product and Extended Edition is limited to new -- or greenfield -- implementations, this version allows a system conversion or selective data transition from a preexisting SAP environment.

S/4HANA Cloud Private Edition is best suited for current SAP users who have moderate customization requirements and want to migrate their existing SAP systems to the S/4HANA cloud.

The upgrade process

SAP offers considerable flexibility for S/4HANA Cloud Private Edition upgrades. The upgrades occur annually, but users have some control over their timing.

Because of Private Edition's additional customization capacity, upgrades require more extensive testing and could potentially lead to customization changes. SAP's role in the upgrade process is significantly reduced for S/4 HANA Cloud Private Edition users.

This potentially negates one of the key selling points of cloud ERP: Usually, new features and innovations are deployed as soon as they become available.

Potential Private Edition users must consider the tradeoff between flexibility and agility. The program is customizable, but upgrades aren't automatic and new functionality won't be available immediately.

S/4HANA Cloud Private Edition use cases

S/4HANA Cloud Private Edition is best suited for current SAP users who have moderate customization requirements and want to migrate their existing SAP systems to the S/4HANA cloud.

While this version lacks the extreme flexibility of SAP's "AnyPremise" versions, Private Edition users will still benefit from the wide range of customization options. S/4HANA Cloud Private Edition provides a healthy balance between standardization and customization and between simplicity and complexity.

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