Many SAP user companies will be making the move to S/4HANA in the next few years. When considering various aspects of migration, the first question tends to be, should we go Brownfield or Greenfield?
The next question that comes up with increasing frequency concerns the operating model to be used. Should the S/4HANA system run on-premises — or in the cloud? Or should a mixed model be adopted, i.e. one combining both in a hybrid approach? If a company has settled on a cloud or hybrid model, then a decision must be made as to the form of availability: Will it be the public cloud or the private cloud?
As they plan their migrations to S/4HANA, many of our customers are considering moving at least part of their operations to the cloud; which is the reason that we are offering this rundown on the various models and offerings that SAP has in store.
SAP Business Technology Platform (BTP)
The SAP Business Technology Platform (formerly SAP Cloud Platform) is provided by SAP primarily for the purposes of running add-ons from SAP partners or in-house developments. This makes it of potential interest to companies using SAP if they are seeking to outsource specific areas or processes to the cloud with products such as our Business Partner Portal for document exchange with suppliers. However, a full S/4HANA system wouldn't be operated in the BTP. The BTP is considered an innovation platform which also serves as a platform for Fiori applications.
SAP's S/4HANA Cloud is comprised of two different models: the S/4HANA Cloud extended Edition (EX) and the S/4HANA Cloud essential Edition (ES). These two delivery models have been renamed several times in recent years. The extended Edition has been called by the names of Single Tenant Edition (STE), Private Cloud, and even "ERP in the Cloud"; the essential Edition has been designated Multi Tenant Edition (MTE), Public Cloud, and "Cloud ERP" has also been referred to.
S/4HANA Cloud extended Edition (EX)
This is an infrastructure-as-a-service offering. The scope of functions is identical to that of an on-premises installed S/4HANA system. The system can be accessed via the classic SAP GUI or via the Fiori Launchpad. You have access to the Configuration Guide and SE80. SAP offers semi-annual updates, and you make an agreement with SAP which updates will be carried out. It is important to note that only the Greenfield approach can be used here, with selective data transfer.
S/4HANA Cloud essential Edition (ES)
As a software-as-a-service offering, the essential Edition is provided in a standardized multi-tenant landscape. The system can only be accessed via the Fiori Launchpad. You do not have access to the Configuration Guide. There is no ArchiveLink interface available; instead, CMIS is used. If add-ons are to be used, they must be connected via the SAP Cloud Platform. Updates are carried out by SAP on a quarterly basis. With this model you can only start on a Greenfield site. It is recommended for smaller companies or subsidiaries/branches.
The advantages and disadvantages of the S/4HANA Cloud
In general, stepping into the cloud is synonymous with stepping towards standardization. For this reason, migration to S/4HANA Cloud is especially suitable for the Greenfield approach, or if only selected data is to be transferred. On the other hand, there are advantages. The frequency of innovation is higher than with on-premises installed systems, and the TCO is likely to be lower. A comparison of the extended Edition with the essential Edition will reveal that the extended Edition offers a bit more flexibility and a larger number of customization options. The essential Edition promises more standardization and a higher frequency of innovation. In the end, each user company must decide for itself what its needs and priorities are. What we see in practice with our customers is that mixed models are often used once the decision has been made to migrate to S/4HANA Cloud. For example, the extended Edition is chosen for the head office and the essential Edition for smaller subsidiaries.