Pros and cons of cloud SAP HANA architecture

My thoughts on the most pressing questions many of my fellow CIOs are facing today (other than AI) Modernizing Legacy SAP ERP: the True Costs/ benefit Large Enterprises The push to modernize legacy SAP ERP systems is at a critical juncture. Large enterprises face a strategic dilemma: should they transition to on-premise S/4HANA or migrate to the private cloud via Azure, AWS, or GCP? While SAP and hyperscalers tout cloud as the inevitable future, does the business case truly add up? Let me share my view: The Case for On-Premise S/4HANA ✅ Data Sovereignty & Control: Mission-critical applications remain in-house, ensuring compliance with regulatory and security needs. ✅ Cost Predictability: No recurring cloud subscription fees; costs remain within IT CapEx budgets. ✅ Customization & Performance: High flexibility for industry-specific configurations without cloud provider restrictions. ❌ Infrastructure Costs: Requires substantial upfront investments in hardware, maintenance, and specialized SAP Basis teams. ❌ Scalability Challenges: Upgrading and scaling require additional CapEx and planning, making agility an issue. ❌ Talent Shortages: Finding skilled SAP Basis and ABAP developers is becoming increasingly difficult. The Private Cloud Argument (Azure, AWS, GCP) ✅ Elastic Scalability: Enterprises can scale computing power on demand, avoiding over-provisioning. ✅ Lower IT Overhead: Managed cloud services reduce dependency on in-house SAP technical teams. ✅ Security & Compliance: Hyperscalers offer best-in-class security, but at an additional cost. ✅ Future-Proofing with AI & Analytics: Easier access to cloud-native AI/ML services for real-time analytics. ❌ Lock-in Risk: Enterprises become dependent on SAP’s RISE program and cloud hyperscalers, limiting flexibility. ❌ Cost Overruns: While OpEx pricing seems attractive, long-term cloud costs often exceed on-premise investments. ❌ Performance Variability: Shared cloud environments can lead to latency and unpredictable performance. ❌ Complex Migrations: Moving from ECC to S/4HANA Cloud is not a simple lift-and-shift; extensive reimplementation is needed. Hidden Costs & the SAP-Cloud Hyperscaler Play • SAP Benefits the Most: The cloud-first push enables SAP to enforce RISE contracts, generating steady recurring revenue. • Licensing & Exit Costs: SAP’s licensing structure and vendor lock-in make moving out of RISE costly. • Unclear ROI Timelines: Cloud cost advantages materialize only after years, making the short-term financial case weak. Therefore, No Clear Winner, but a Cloud-First Hype remains • For heavily customized industries (e.g., manufacturing, defense, pharma), on-premise remains relevant. • For fast-scaling, digital-first firms, private cloud offers agility but at a price. • Hybrid cloud models with selective cloud adoption (e.g., AI, analytics, disaster recovery) may be the best compromise.

📱 The ‘Apple vs. Android’ Moment in ERP: SAP’s Bold Bet on Public Cloud For years, ERP customers have had one main priority—flexibility. Customization was the gold standard. The more tailored your ERP, the better. But SAP is making a bold bet—that the future of ERP is not about customization, but about speed, agility, and continuous innovation. 💡 This is shaping up to be the ‘Apple vs. Android’ moment in ERP. 🔹 SAP S/4HANA Public Cloud (Apple-like) – Standardized, continuously updated, and highly optimized, but with limited customization. 🔹 SAP S/4HANA Private Cloud (Android-like) – More flexible, deeper customization, but also more complex and responsibility-heavy. How Do They Compare? Feature SAP S/4HANA Public Cloud SAP S/4HANA Private Cloud Customization Limited – Designed for best practices High – Tailored to unique business needs Upgrades Automatic, always up-to-date Customer-managed, upgrade cycles required Implementation Speed Faster – Pre-configured business processes Slower – More design and configuration needed Total Cost of Ownership Lower – No infrastructure or major upgrades required Higher – More maintenance, customization costs Flexibility Standardized processes, less variation Greater control over configurations and extensions Scalability Built for rapid scaling with SAP innovation Scalable but requires IT effort to maintain AI & Automation Embedded AI-driven automation, analytics, and best practices AI and automation possible but requires additional effort 🚀 SAP is betting big on Public Cloud—not just as a cost-saving measure, but as a way to future-proof businesses. Customers who embrace standardization and automation will gain agility, resilience, and continuous innovation. But for those with deep industry-specific needs, Private Cloud remains a strong option—offering the best of SAP S/4HANA with customization flexibility. The Big Question for Businesses: 💡 Do you prioritize agility, automation, and continuous innovation (Public Cloud)? 💡 Or do you require deep flexibility and control (Private Cloud)? At ASAR Digital, we help businesses navigate this decision and implement SAP the right way. What’s the best ERP model for your business? Let’s discuss. 👇

Moving from SAP ECC to S/4HANA Cloud vs. On-Premise Transitioning from ECC to S/4HANA isn’t just a technical upgrade It’s a finance transformation. Whether you're eyeing the Cloud or On-Premise path, each route reshapes how your team works, plans, and grows. Here’s how the shift impacts your finance operations: 1/ Deployment & Customization ↳ S/4HANA On-Premise: Installed in your data center, full flexibility for industry-specific needs ↳ S/4HANA Cloud: SaaS model, fit-to-standard approach for fast adoption 2/ Innovation Speed ↳ On-Premise: Annual updates, your IT team controls timing ↳ Cloud: Quarterly innovations, new features delivered continuously 3/ Total Cost of Ownership ↳ On-Premise: Large upfront CapEx, ongoing maintenance costs ↳ Cloud: Subscription-based OpEx, SAP handles the backend 4/ Data & Process Standardization ↳ On-Premise: High configurability, more room for legacy process carryover ↳ Cloud: Built-in best practices, streamlined, global-ready processes 5/ Integration & Extensibility ↳ On-Premise: Integrate with legacy systems, customize freely ↳ Cloud: Extend using BTP (SAP Business Technology Platform), APIs & side-by-side apps 6/ Financial Closing & Reporting ↳ On-Premise: Tool-dependent, often custom workflows ↳ Cloud: Accelerated close with embedded workflows and automation 7/ Analytics & Planning ↳ On-Premise: BW-powered, with embedded analytics ↳ Cloud: Native integration with SAP Analytics Cloud—real-time insights out-of-the-box 8/ Regulatory Compliance & Localization ↳ On-Premise: Custom localization as needed ↳ Cloud: Country versions and compliance updates managed by SAP 9/ User Experience ↳ On-Premise: Fiori optional, can coexist with legacy UIs ↳ Cloud: Fiori-first, mobile-enabled by design 10/ Change Management ↳ On-Premise: Longer project cycles, deeper change management needed ↳ Cloud: Leaner projects, faster ROI, tighter governance Cloud is for speed and scale. On-Premise is for depth and control. From ECC, the next step isn’t just where to go, it’s how you want to grow. #SAP #S4HANA #FinanceTransformation #SAPCloud #CloudERP #DigitalFinance #SAPFinance #ECCtoS4HANA