SAP S/4HANA cloud editions or on Premise? Demystifying the options and cost benefits


SAP S/4HANA cloud editions or on Premise

Shifting to SAP S/4 HANA cloud looks easy on the ground. But in reality, this choice makes the process of decision making tough.

The newly designed structure of SAP S/4 HANA cloud has got new components. These technical redesigns need repetitious training trials, which consume most of the resources and time.

By switching to SAP S/4HANA or by continuing ERP SAP-based solutions, you can bring a new implementation system. In both cases, you will need highly effective deployment strategies

According to factors such as costs and results, you can choose either cloud or on-premise hinges. Choosing a better platform needs a full understanding of redesigned technical features and also the one that will provide better results for your business.

Let’s discuss both the platforms in detail with an overview that will eventually help you to choose better options for your business growth.

On-premise deployment 


on premises

For S/4 HANA deployment, on-premise is an internal platform placed in servers. Your technical team is responsible for the control of the servers, whereas the company provides the SAP upgrades yearly. Test for the upgrades is however managed by your designated team. 

Cloud Platform 

Cloud deployment is present in the SAP server, unlike on-premise. The host company controls and maintains the server and renews the upgrades on a quarterly basis.

There are several advantages to both the public and private edition. The private edition cloud deployment platform performs more than the prevailing range of S/4 HANA functions. It also offers a geographical extension.

On the other hand, the public edition is helpful in solving LOB challenges and is quite handy. It also has an optimistic approach to the overall working process and policy of ERP solutions.
The cost factor On-premise vs cloud

The Difference 

  • On-premise deployment is based on the traditional licensing approach whereas cloud deployment is based on a subscription model.
  • On-premise deployment has internal servers that give the inhouse technical staff the responsibility for maintenance and control. Cloud gives control to the SAP hosting company and is also held responsible for the maintenance.
  • The user is given full control for PTC but in cloud, the control is in the hands of the hosting company but they do collaborate with the users for upgrades.
  • In on-premise deployment, the customization process is not limited and gives a greater area for customizing. In cloud, the customization is strictly limited because of the predetermined industry-standard configuration. 
  • On-premise provides ERP functions and also paves the way for the inclusion of SAP- hybris. The cloud platform works on SAP field-glass, standard ERP, SAP Hybris marketing, and SAP Success Factors Employee central.


Cloud platform 

The licensing module of the cloud platform confides on monthly revenue. This amount is for maintaining the updates and infrastructural modifications. The best advantage of the cloud platform is that it does not need a huge amount for hiring a bunch of IT professionals for maintaining the platform.

As discussed previously, on-premise deployment is based on traditional licensing. The payment is authorized for the introductory purchase and annual maintenance. The cost of maintenance is quite low because of the high cost of updates.

Comparing On The Basis Of Security

As pre recent research on IT decision-makers by BT, 49% of the people stated that they are worried about the security breaches of cloud platforms.

For 76% of people, security becomes the key concern in cloud services. Another 41% of the people concluded that cloud services are innately insecure.

On-premise is safer because of its in-house data centers. There are no chances of a security breach by outsiders. It has a control on its own data 

If the security breach happens because of an in-house employee, it takes a lot of time to find out and handle it.

In a cloud platform, the host company gets the data faster and also informs the users of unauthorized physical access.

Comparison On The Basis Of Flexibility And Working

When a business witnesses massive growth then the cloud platform is the most reliable solution to promote your business in new regions without investing a huge amount.

On-premise will require considerable infrastructure and troop investment.

A cloud application is subject to access from any browser and makes the working process flexible and easy. An on-premise network requires security profiles for providing access to a third party. It is quite a complicated process for outsourcing. A cloud application is hosted externally and provides easy outsourcing.
If a problem persists regarding data access you won’t find a local admin to help you immediately in the cloud services. You need to contact customer support for help and will take a lot of time to get it fixed.


The deployment service of SAP S/4HANA cloud surely has a bunch of benefits. But the clients should deeply research before choosing a service. They must keep the pros and cons in mind before going for a service. The choice majorly depends on the factor of cost and usability of the service.