The SAP S/4HANA public cloud vs. private cloud comparison is an important one for CIOs to understand.
S/4HANA is SAP's next-generation, HANA-powered, in-memory ERP system and successor to SAP ERP Central Component (ECC). S/4HANA is available in both cloud types: public and private. It is also available in an on-premises version, as well as in a hybrid model, which is a combination of cloud and on-premises software. All versions include the SAP Fiori UI.
A cloud migration means a data migration -- and dealing with critical company information -- whether the migration is to a public or private cloud. Because of that, CIOs evaluating the available deployment options for S/4HANA in public or private clouds need to give careful consideration to several factors when deciding which cloud option is most suitable to meet their needs in terms of cost, ease of implementation, industry specificity and data security.
SAP S/4HANA public cloud vs. private cloud overview
S/4HANA public cloud is a SaaS, multi-tenant version of the ERP system, where all tenants share the same cloud. This makes it low-cost, efficient and scalable. In other words, it's an off-the-shelf, out-of-the-box, cloud-native ERP in which each tenant uploads data, switches on the required features or switches off what's not required. And it's ready to use in a few weeks.
SAP manages the S/4HANA public cloud's infrastructure and takes care of routine system maintenance, including upgrades and patches. SAP is also responsible for ensuring data cybersecurity, governance and compliance. Public cloud performance can be much better than what companies have access to in an on-premises data center.
In comparison to S/4HANA public cloud, the private cloud version offers greater HANA flexibility and functionality. Every tenant using S/4HANA private cloud has its own dedicated virtual private cloud, which can be hosted in the language or region of choice. All S/4HANA private cloud tenants share the data security, governance and compliance protocols. As with S/4HANA public cloud, SAP manages the entire infrastructure for S/4HANA private cloud.
S/4HANA private cloud is part of the two-tier SAP HANA Enterprise Cloud, which is composed of the custom cloud at the top tier and private at the midtier. A custom cloud implementation of S/4HANA -- or HANA Enterprise Cloud -- is top-tier, and S/4HANA private cloud is considered a midtier ERP.
The latter can only support S/4HANA implementations that are new, known as greenfield projects, and not migration from ECC to S/4HANA, known as brownfield projects. For brownfield projects, the top-tier custom HANA Enterprise Cloud, which is a mix of public and private cloud, is available, but costs significantly more and is suitable for larger enterprises. S/4HANA private cloud is also referred to as HANA Enterprise Cloud, private option.
Let's delve into specific areas separately for an S/4HANA public cloud vs. private cloud comparison.
When it comes to S/4HANA public cloud vs. private cloud on the issue of cost, public is decidedly less expensive. This is due to the simplicity of the public cloud's features, as well as having the same architecture shared by multiple tenants.
The functionality of S/4HANA public cloud vs. private cloud is one of the most important areas to understand. Compared to S/4HANA private cloud, S/4HANA public cloud is not a standard or full-featured version of S/4HANA in the cloud, but a limited ERP version. Many people don't understand that it offers fewer features and minimal customization options. S/4HANA public cloud eliminates many implementation complexities by offering only a limited number of standard ERP features.
In contrast, S/4HANA private cloud makes almost all of the standard features available.
Implementation or deployment timelines
S/4HANA public cloud provides tools for guided business processes configuration, so companies can load their master data more easily. Companies can choose to switch on or off the available standard ERP features for a quicker go-live.
S/4HANA private cloud also offers guided configuration tools. In addition, companies can choose to implement the available S/4HANA components they want. Because each company may choose a different set of S/4HANA components for implementation, the deployment timeline varies according to scope of implementation.
S/4HANA public cloud only supports the following industries: manufacturing, professional services, sourcing and procurement, HR, sales support and financial services. More industries are slated for future support. If a company's specific industry isn't supported in the public cloud, then it makes sense to not choose this option. S/4HANA private cloud supports significantly more industries.
Neither public nor private S/4HANA cloud options offer specialized SAP software, such as IS-Utilities, IS-Health or IS-Automotive, making them a misfit for companies presently using them.
Languages, countries and regions support
When it comes to global considerations of S/4HANA public cloud vs. private cloud, private is the clear winner. The S/4HANA public cloud version offers support for only a limited number of countries and languages. S/4HANA private cloud offers far more options.
Upgrades, patches and new feature availability
Using S/4HANA public cloud enables all tenants to benefit from upgrades, patches and new features.
In contrast, S/4HANA private cloud tenants can pick and choose not just the new ERP features they want to implement, but they can also decide on the system's upgrade schedule for minimal downtime.
Moving to S/4HANA public from private cloud
When considering S/4HANA public cloud vs. private cloud, SAP intends the decision to be easily changeable. The two use the same programming codes and logic, so companies should be able to move to S/4HANA public cloud and take advantage of the public cloud's lower cost when SAP develops security and flexibility equal to that of the private cloud.
Greenfield implementation support
A greenfield implementation is a new ERP implementation and not a migration of legacy ERP systems, such as SAP ECC to S/4HANA. S/4HANA public cloud offers companies only the available standard ERP features for a plug-and-play implementation approach.
In contrast, S/4HANA private cloud facilitates greenfield implementation, which means the entire ERP is built from scratch.
As an overall S/4HANA public cloud vs. private cloud comparison, public cloud is more appropriate for small and medium-sized businesses in supported industries having simpler and straightforward business processes. SAP considers any business making up to $1 billion in revenue each year part of the SMB category. S/4HANA private cloud is a better fit for midsize and larger companies planning a brand-new implementation that need a software and landscape customization.