SAP S/4HANA Private or Public Cloud? – That Is the Question
December 01, 2023 | Reading time: Approx. 8 minutes
Solution Architect at FIS
As if the “rise” into SAP S/4HANA Cloud was not challenging enough, you additionally face the following decision: public or private edition? Both cloud environments provide diverse advantages you can benefit from as an enterprise. To simplify the choice for you, both editions are compared to each other in this blog article.
It is difficult to say what William Shakespeare would have thought about remote work, enterprise resource planning or SAP. Although SAP has already been well-established on the market for more than 50 years, the first SAP system was only developed many centuries after Shakespeare’s time.
Imagining what Shakespeare would say about the way into the cloud, however, it might roughly sound as follows: ”Cloud or no cloud, that is the question. Whether ’tis nobler in the mind to suffer the spreadsheets and different systems of outrageous fortune or to take arms against a sea of data and integrate them by opposing.”
But let us put these absurd theories aside and dedicate ourselves to the facts: In the digital world, enterprises increasingly depend on cloud computing models to optimize business processes and update their IT resources.
With RISE with SAP, SAP as a cloud provider offers its new and existing customers an easy option of business transformation into the cloud.
However, is this the way that is useful for your enterprise at all? Frequently, RISE with SAP still raises questions at the moment and confronts SAP users with challenges. To bring light into the darkness, both cloud editions are presented and compared to each other in this blog article.
In spring 2025, SAP renamed its cloud ERP products:
The solution previously known as SAP S/4HANA Cloud Public Edition has been called SAP Cloud ERP since then, whereas SAP S/4HANA Cloud Private Edition is now described as SAP Cloud ERP Private. In this specialist article, however, the old names remain unchanged.
What are the benefits of SAP S/4HANA Cloud?
As a cloud-based ERP system, SAP S/4HANA Cloud is primarily characterized by the fact that local installations or maintenance can be dispensed with. Instead, the software is made available via the internet as “Software as a Service”, with contents and data being securely saved in the cloud storage. This approach provides scalability, efficiency and flexibility for enterprises. Furthermore, they can benefit from a faster implementation of cloud computing services.
Another added value consists of regular updates and the provision of innovations by SAP as a cloud provider. In this way, your IT infrastructure always remains up to date and, in addition, you have the option of quickly developing suitable solutions for diverse scenarios. This provides your enterprise with an essential advantage in a fast-changing market.
SAP S/4HANA Cloud is offered in two variants – the public and the private cloud edition. Although both options are based on the same basic principle of a cloud application, they significantly differ in flexibility and their degree of standardization.
SAP S/4HANA Cloud Public Edition: introduction
SAP Public Cloud is a cloud computing solution operated and managed by SAP. The public cloud service enables enterprises to offer their services and data in an environment hosted by SAP as a public cloud provider. Important characteristics of SAP Public Cloud:
Scalability and flexibility
SAP Public Cloud provides enterprises with the option of easily scaling their cloud computing resources if required. This means that you can adjust the infrastructure to your business requirements. This characteristic is very useful, particularly for enterprises being subject to seasonal fluctuations or carrying out temporary projects.
Lower costs
As the infrastructure is jointly used by several customers in the form of a multi-tenant operation, costs are significantly lowered for each user. In this way, even small and medium-sized enterprises can benefit from high-quality SAP solutions without having to make high initial investments.
Automated updates and maintenance
In case of the public cloud edition, SAP assumes responsibility for updates and maintenance, which takes this burden from internal IT teams. This ensures that your cloud services are always state of the art and fulfill the requirements concerning safety and efficiency.
Standardization
SAP Best Practices processes from more than 40 years of SAP experience form the basis for the public cloud edition. In this way, you can start quickly and benefit from long-standing process experience. Even topics such as onboarding, system provision and operation have been optimized to such an extent that everything runs smoothly.
SAP S/4HANA Cloud Private Edition: introduction
The private cloud edition offers more configuration and adaptation options compared to the public variant, and, therefore, reminds users more of the traditional on-premises system. If you make a decision in favor of the private cloud model, you will obtain your individual cloud platform as a single-tenant solution.
SAP S/4HANA Private Cloud Edition uses a HyperScale infrastructure (Azure, Amazon Web Services, GCP), which provides many advantages – including scalability and best-of-breed quality. However, SAP computer centers are still another option.
Furthermore, you can decide yourself when and how often upgrades are to be carried out for this cloud model. In consideration of the specification that at least one upgrade has to be carried out within five years, the pressure of regular updates is eliminated.
Here are some key characteristics of SAP Private Cloud:
Control and security
SAP Private Cloud provides enterprises with the option of hosting their data and applications in a dedicated environment. Particularly enterprises with sensitive data or strict compliance requirements are given more security and control with the private edition. Moreover, individual safety measures and compliance guidelines can be implemented more easily.
Adaptability
With SAP Private Cloud, enterprises can adapt the cloud infrastructure according to their individual requirements and guidelines. Thereby, specific business needs can be fulfilled and customized solutions created.
SAP Public Cloud vs. SAP Private Cloud: What are the differences?
Scalability
SAP Public Cloud offers a high degree of scalability as it has the resources and the expertise of SAP and numerous industries. This enables enterprises to quickly respond to changed business needs and adapt their infrastructure without any problems. SAP Private Cloud also provides scalability but to a more limited extent as resources are dedicated.
Costs
The costs are an important factor for the decision between the public and the private cloud edition. SAP Public Cloud is usually more cost-effective as the cloud infrastructure is jointly used. For the SAP Private Cloud environment, the customer pays a surcharge for higher control and adaptability as well as dedicated provision.
Control and compliance
SAP Private Cloud offers higher security and more control over your data, which makes it an ideal solution for enterprises being subject to strict compliance requirements.
Conclusion
In total, SAP S/4HANA Public Cloud as well as SAP Private Cloud provide a multitude of benefits and the choice between both provision options depends on individual business needs.
If you are looking for cost-effective, highly scalable cloud ERP solutions and are prepared to implement the changeover to SAP Best Practices processes, SAP Public Cloud could be the right choice for you.
In comparison to the public edition, the private edition is a more comprehensive solution that is particularly recommended for enterprises which have already established and strengthened individual and complex processes.
For SAP ERP customers with an on-premises solution who would like to retain their individual processes, a changeover to the private cloud is useful as it enables them to migrate existing coding in the context of a brownfield transition. Even a changeover from a non-SAP ERP system with numerous individual processes to the private cloud is easier than a changeover to the public cloud.
Which cloud ERP system is the right one for your enterprise?
As is so often the case, there is no general answer. The choice between the public or private edition approach must be considered individually in each case and advantages and disadvantages of both SAP S/4HANA systems must be valuated.
Experienced SAP partners will support you in this valuation and provide consulting services to ensure that you will obtain the best possible solution for your enterprise.
In the context of SAP Business Unleashed 2025, SAP presented the latest developments, such as SAP Business Suite and SAP Business Data Cloud. Click here to access the news.
Questions about this topic? Our team will be happy to assist you personally.
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