SAP continue to expand their cloud service range to help secure more S/4HANA users on their subscription model.

With many ECC users developing their business case to move to S/4, prospective SAP ERP users need to be sure that they can make the ROI sums work and have minimal risk/costs moving over.

Everyone acknowledges a new powerful S/4HANA ERP will be faster, and as a digital operations platform, it can leverage real time business intelligence as well as new technologies like artificial intelligence. These can provide enhanced user experiences, but with other business processes also needing to change to realise commercial benefits, accurately predicting the increased revenues and reduced costs is difficult.

Most ECC users purchased their SAP applications on a perpetual license model which has now already depreciated and currently only subject to an annual maintenance fee. Users need a low cost and reliable way to move their ECC to S/4, with an ROI that stands up to justify the additional investment.

With a small fraction of S/4HANA customers live on S/4 today and sales of new licenses being down last year (likely COVID delaying transformation projects) SAP needed to make it easier to move. ‘RISE with SAP’ launched earlier this year and was designed with this in mind: bundling various migration tools and services within the subscription services to ensure the onboarding process is as smooth as possible.

There are now five main variants of S/4HANA, four types of SAP ‘subscription services’ plus the AnyPremise ‘product’ offering. AnyPremise (previously ‘on-premise’) is the original product version with no restrictions and can be deployed anywhere the customer chooses (on-premises, cloud, hybrid) as the names suggest.  Unlike any of the subscription services, AnyPremise follows the traditional perpetual license + annual maintenance contract model.

  1. S/4HANA Cloud Public Edition: multi-tenant, 100% Web, limited application features, virtually no customisation and CANNOT ‘lift & shift.’  Quarterly upgrades are automatic with no user control of upgrade timings.
  2. S/4HANA Cloud Extended Edition (EX): single-tenant, offers full application features, good customisation, runs on SAP cloud in their own DCs (was HEC) but is DIFFICULT to ‘lift & shift.’  Upgrades are mandatory with limited user control on timing.
  3. S/4HANA Cloud Private Edition: single-tenant, offers full application features, good customisation, runs on the newer SAP clouds built with their Hyperscale partners (Azure/AWS/GCP). EASY to ‘lift & shift.’ Upgrades have flexibility on timing (but requires user testing).
  4. S/4HANA Cloud Private Edition, customer data centre option: on-premise, full application features, good customisation, runs on SAP local infrastructure (Lenovo/HPE). EASY to ‘lift & shift.’  Upgrades have flexibility on timing (but requires user testing).
  5. S/4HANA AnyPremise: highly flexible, any deployment option, full features, user control, full integration capabilities / customisation capabilities EASY ‘lift & shift.’  Users have full control of when and if users upgrade.

Each variant offers slightly different application feature sets. Some variants support a brownfield ‘lift and shift’ migration, others don’t. This is important for users with decades of customisation that they need to preserve, need to control how their upgrades are managed and where their customer data is stored.

SAP Service variants

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Choosing the most appropriate type of SAP S/4HANA Cloud subscription service for your business can be quickly determined by answering four questions:

  1. How much of the application feature set will be used?
  2. Re-implement greenfield or ‘lift and shift’ with a brownfield migration?
  3. How extensive is the customisation that will be required?
  4.  Where does the customer data need to reside?

However, subscription software services are all about simplicity and not having to worry about IT matters. Most will not want to have to worry about where it is deployed or how and when software updates are implemented and managed.

Sadly, any ECC users with considerable customisations for their ERP that need to follow a brownfield migration, will not get this simplicity. To support an easy ‘lift and shift’, users must choose one of the private editions.  These do not come with automated application software updates and by pushing the burden of user testing/upgrade responsibility back to the customer, some will question why they are moving to a subscription service?

If users want or need full control of their own SAP landscape to manage as they see fit, but are attracted by the simplicity of a service on an OP Ex model, they should consider a managed service from a SAP Partner.  All the benefits of consuming SAP as a Service (SaaS) can be gained through the Partner Managed Cloud (PMC) programme who offer any type of managed service required, by basing their services on the AnyPremise product variant.

There are also commercial models where the users can purchase their own S/4HANA perpetual licenses which they will retain as an asset indefinitely. This model provides full flexibility to adopt other options or appoint partners in the future should their needs change.

It will be interesting to see what the portfolio looks like next year when SAP UK DATA Cloud goes live to address the UK public sector market. At launch SAP Analytics Cloud and SAP S/4HANA Cloud will be offered, but which variants?