What is the Difference Between On Premise and Cloud in SAP

The main difference between on premise and cloud in SAP is that on premise is installed locally, on company’s own computers and servers, while cloud is hosted on the vendor’s servers and accessed via a web browser.

SAP is Enterprise Resource Planning (ERP) software. It integrates the main business functions of an organization. It includes many business processes such as sales, production planning, logistics, and financial accounting. One module in SAP is called HANA. It stands for High Performance Analytic Appliance. It contains HANA database, data modeling, administration, and data provision as a single suite. There are two versions of SAP HANA called on premise and cloud.

Key Areas Covered

1. What is On Premise in SAP
– Definition, Functionality
2. What is Cloud in SAP
– Definition, Functionality
3. What is the Difference Between On Premise and Cloud in SAP
– Comparison of Key Differences

Key Terms

Cloud in SAP, On Premise in SAP, SAP HANA

What is On Premise in SAP

SAP HANA on premise edition is an internal platform. In other words, it is located on the servers of the company. It requires more time and budget to implement. Moreover, it is essential to select the correct personnel to set up the environment. Sometimes, it is also necessary to purchase new hardware and software to develop additional features.

On premise edition is suitable for organizations that require a wide range of features with flexible customization. Furthermore, large enterprises with well-proven business processes that do not modify frequently can use this edition. As the system is available within the company servers, it is easier to monitor and configure than the cloud version.

What is Cloud in SAP

SAP HANA cloud edition is hosted in vendor’s servers. In other words, it is hosted on SAP servers. Also, this version further divides into private and public editions at the enterprise level. The implementation is much faster in cloud version as it provides a platform that is already provisioned and tested by the cloud provider.

Cloud edition is suitable for medium-size companies that need flexible database platforms to improve scalability while expanding further. It is also suitable for organizations that need high performance for their business strategies with fast, continuous upgrades. Therefore, it is excellent for enterprises that grow rapidly.

Difference Between On Premise and Cloud in SAP

Definition

On premise is a version of SAP which provides an internal platform by installing the system on the company’s own servers and maintaining it. Cloud, on the other hand, is a version of SAP that is hosted on SAP servers and maintained by SAP. Thus, this is the main difference between on premise and cloud in SAP.

Licensing

Also, another difference between on premise and cloud in SAP is that On premise has traditional licensing while Cloud has subscription licensing.

Implementation

Furthermore, on premise requires more time, cost and effort while implementation is faster in cloud.

Maintenance

Besides, while the IP staff in the company handles the maintenance of on premise, SAP performs the system maintenance of cloud in SAP. Hence, this is also a difference between on premise and cloud in SAP.

Upgrading

In on premise, the company is responsible for upgrading the system; however, in cloud, there are automatic upgrades.

Customization

Another difference between on premise and cloud in SAP is that On premise is more customizable because the company manages it while Cloud provides customization up to some extent.

Scalability

Moreover, On premise, scalability is difficult as it requires long term planning while it is easier, faster and cost-effective to scale in cloud according to the organization requirements.

Conclusion

There are two versions in SAP HANA as on premise and cloud. Organizations can select any of them depending on the business requirements, resource availability and budget. The main difference between on premise and cloud in SAP is that on premise is installed locally, on company’s own computers and servers while cloud is hosted on the vendor’s servers and accessed via a web browser. Additionally, there is a hybrid model that provides features of both on premise and cloud.

Reference:

1. “SAP S/4HANA: On-Premise vs. Managed Cloud. Which Is Right for Your Enterprise?” Savantis Solutions LLC, 28 May 2018, Available here.
2. “Cloud ERP vs. On-Premise ERP.” Software Advice, 4 Oct. 2018, Available here.
3. “SAP Cloud Platform.” Overview | SAP Cloud Platform, 26 Feb. 2019, Available here.
4. “SAP HANA Deployment Options | On Premise, Cloud, or Hybrid.” SAP, Available here.