SAP S/4HANA Cloud - Public vs. Private Editions
When choosing between Public and Private Editions, it’s always important to consider some decision factors such as the current key business processes, existing SAP landscape together with the organizational technology roadmap, data governance requirements in the domain, available IT resources, and implementation timeline.
Here is a breakdown of the key themes and focus areas to consider when choosing between SAP S/4HANA Cloud Public and Private Edition implementation:
We look at the deployment models, customization options, implementation approaches, and cost considerations. The emphasis is on making the "right" choice depending on an organization's specific needs, existing SAP landscape, and willingness to embrace standardized processes.
1. Deployment Model:
• Public Cloud (Essential Edition): This is a Software-as-a-Service (SaaS) offering where multiple customers share the same cloud infrastructure. Public clouds offer efficiency and affordability and are often multi-tenant – meaning the provider runs your service in a shared environment. It can be managed by hyperscaler cloud providers such as Amazon, Microsoft Azure, and Google Cloud Platform.
• Private Cloud: Offers a dedicated, single-tenant environment for each customer. With the private cloud, services are maintained on a private network protected by a firewall. Private editions are single-tenant environments where the provider runs our services in a dedicated environment. This can be built within a customer's own data center or using IaaS providers like AWS, Azure, GCP, or Alibaba Cloud.
2. Customization and Extensibility:
• Public Cloud: Customization is limited to SAP Fiori apps and the SAP Business Technology Platform (BTP) for extensions. With the public cloud solution, customizations are made through SAP Fiori apps designed to facilitate changes like Custom Fields and Logic, and Custom Business Objects. For complex customizations that cannot be done through the existing Fiori apps, the SAP Business Technology Platform extension suites are readily available and easily integrated into SAP S/4HANA Cloud. Direct access to the backend SAP GUI and modification of SAP source code are not permitted. No access to backend GUI...Can not modify SAP source code.
• Private Cloud: Allows for greater customization, including structural changes and modification of SAP source code. Customers can customize(including structural changes) and also modify the SAP source code. Customers have full visibility and control with access to the backend of the system through the SAP GUI. This offers full access to the on-premise extensibility framework.
3. Implementation Approach:
• Public Cloud: Typically requires a "Greenfield" implementation, meaning a fresh start with predefined processes. "Greenfield only. Could be a component of selective data transition. It's designed for companies willing to redesign their processes to align with SAP's best practices. Existing or new customers who have the desire to move to the cloud, who are ready to start fresh with a clean system by giving up on any existing investment made on any ERP solution, and who are open to a process redesign. This is a choice for companies who are ready to embrace the future of ERP with a new implementation and predefined process"
• Private Cloud: Supports "Brownfield, "Selective Data Transition," and "Greenfield" implementations. "Brownfield, Selective Data transition and Greenfield". This allows existing SAP ERP customers to migrate to the cloud while retaining their existing investments and processes. "Existing SAP ERP customers who have the desire to move to the cloud, do not want a complete process redesign and who want to retain their current investment made to their existing SAP ERP system."
4. Total Cost of Ownership (TCO) and Return on Investment (ROI):
• Public Cloud: Generally offers the lowest TCO and highest ROI due to its shared infrastructure and standardized processes. "Lowest TCO and highest ROI."
• Private Cloud: Typically has a higher TCO due to the dedicated infrastructure and greater customization options. "Comparatively higher TCO."
5. Release Cycle and Updates:
• Public Cloud: Follows a more frequent and standardized release cycle, with updates fully managed by SAP. Two major releases per year, and Continuous Feature Delivery (CFD) updates delivered monthly. Provides enhancements that are automatically installed by SAP.
• Private Cloud: Follows the annual base release of SAP S/4HANA On-Premise, however there is a requirement to install at least one upgrade every five years to stay within mainstream maintenance.
6. Business processes and Industries:
• Public Cloud: Highly standardized business processes covering selected lines of business and industries.
• Private Cloud: Covers all 25 industries like SAP S/4HANA on-premise.
General Decision Factors:
• Business Processes: If an organization requires highly customized business processes, the Private Edition is generally a better fit. If the business is willing to adopt standard processes, the Public Edition offers the benefits of lower cost and faster implementation.
• Existing SAP Landscape: Existing SAP ERP customers with significant investments in custom code and specific configurations might find the Private Edition a more suitable migration path.
• Data Governance and Security: The Private Edition provides greater control over data governance and security due to its single-tenant environment.
• IT Resources: The Public Edition requires fewer IT resources for ongoing maintenance and updates, as these are managed by SAP.
• Implementation Timeline: The Public Edition generally offers a faster implementation timeline due to its preconfigured processes.
• Control: Private cloud customers have total control over their upgrade and maintenance schedules to ensure that there is minimal downtime or disruption to their organization.
The choice between SAP S/4HANA Cloud Public and Private Editions is a strategic decision that requires careful consideration of an organization's unique requirements and priorities. The Public Edition offers cost-effectiveness, speed, and streamlined processes, while the Private Edition provides greater flexibility, control, and customization capabilities.
Ultimately, the choice between SAP S/4HANA Cloud Public and Private Editions is a strategic decision that requires careful consideration of an organization's unique requirements, priorities, and strategic technology roadmap. Always discuss the details of the above points with the relevant SAP partners, SI to help make the decision that works for your business.
Here are some other useful websites to dig deeper into the key items to be considered:
https://www.vc-erp.com/sap-s-4hana-public-cloud-vs-private-cloud-top-5-differences-explained/
https://www.spinnakersupport.com/blog/2023/10/06/sap-s-4hana-public-vs-private-cloud-edition/
https://kps.com/global/en/company/blog/2024/sap-cloud-public-vs-private.html
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