SAP Cloud ALM provides enhanced capabilities, higher value, and a future-proof foundation that keeps your business ahead of the curve. Therefore, transitioning from SAP Solution Manager to SAP Cloud ALM is a proactive strategy to leverage the numerous benefits of this cutting-edge platform. With this transition, customers can adopt a streamlined core strategy for their ALM processes, thereby reducing complexity and freeing up resources for innovation and growth.
Functionality Comparison
Compared to Solution Manager, Cloud ALM emphasizes a lightweight setup and standardized best practices for cloud implementations and operations. Solution Manager suits mature on-premises/hybrid landscapes that need extensive control and service processes, whereas Cloud ALM is SAP's strategic choice for managing cloud-centric implementations and operations.
The next slide shows the functionality of SAP Solution Manager versus SAP Cloud ALM and Friends:

SAP Solution Manager is an on-premise, full-featured ALM platform built for traditional and hybrid SAP landscapes, offering deep capabilities such as Change Request Management (ChaRM) and transport control, IT Service Management, solution documentation, custom code management, a comprehensive test suite, technical monitoring, and root-cause analysis. SAP Cloud ALM is a cloud-native, SaaS ALM solution optimized for SAP cloud products (e.g., SAP S/4HANA Cloud, SuccessFactors, Ariba, BTP), focusing on fast time-to-value with prescriptive SAP Activate content, requirements, and task management, test management, and cloud operations such as integration, job, health, and business process monitoring with alerting.
A good overview about all functions and where they are moving to are available here: Transition to SAP Cloud ALM - Section Functional comparison - what goes where.
Note
SAP Solution Manager is in mainstream maintenance until the end of 2027. SAP recommends completing the transition to SAP Cloud ALM before this date.
Hint
You can add SAP Focused Run to address advanced operations needs and to manage a significant on-premise footprint.