Introducing Concepts of Cloud Computing

After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Summarize the technical concepts of cloud computing
  • Explain characteristics of SAP S/4HANA Cloud

Cloud Computing

Introduction to Cloud Computing

The cloud, in technology terms, is made possible by the Internet. The devices within our physical space (i.e. computer, phone, tablet) have limitations. For example, the storage capacity on a hard drive is finite. However, we can use our devices to access near infinite resources in other locations with a simple internet connection.

Deployment Models: Public, Private, and Hybrid Cloud

A cloud deployment model defines how a cloud service is made available to users.

Select the buttons below to explore characteristics of public, private, and hybrid cloud models, and how a customer can leverage a multi-cloud environment.

Computing Services: SaaS, PaaS, and IaaS

Cloud software is delivered "as-a-Service", where a consumer of the service is billed on a subscription basis for what they use. The subscription-based digital model is highly flexible and agile because you can easily scale up or down as needed.

Select the buttons below to compare three common models to find out what you can expect from a Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). Most companies now use a mix of the three, and the lines between them can sometimes blur.

Examples of SAP's SaaS, PaaS, and IaaS Solutions

SAP is one of the world's leading producers of software for the management of business processes, developing solutions that facilitate effective data processing and information flow across organizations. We have more than 100 solutions covering all business functions, and the largest cloud portfolio of any provider.

Select the buttons below to see examples of SAP's software solutions mapped to the SaaS, PaaS, and IaaS computing services.

Characteristics of SAP S/4HANA Cloud

Components of SAP S/4HANA Cloud

SAP S/4HANA is an acronym for SAP Business Suite 4 the SAP HANA database

SAP S/4HANA is the next generation of the SAP business suite software. SAP S/4HANA enterprise software is the digital core of your organization, and is designed to run an Intelligent Enterprise. In an Intelligent Enterprise, data feeds into intelligent analytics, which in turn feeds process automation and innovation. SAP S/4HANA is integration-ready, and includes capabilities within the applications to easily make extensions and customizations to tailor the solution to your needs.

The SAP S/4HANA solution can be deployed in a public cloud, private cloud, or on premise to fit customer needs. The library of pre-delivered business processes and applications help you manage your customers, supply chains, networks, employees, and core processes. The business suite is built on the SAP HANA database, and the user experience is enhanced with the SAP Fiori user interface to provide a consistent and intuitive user experience, both in desktop and mobile apps.


The HANA database is an in-memory, column-oriented database designed to store, receive, and query data that powers the SAP S/4HANA ERP solution. The in-memory computing engine enables HANA to process data stored in RAM as opposed to reading it from a disk. Storing data in main memory rather than on disk provides faster data access and, by extension, faster querying and processing. Column-oriented systems store all data for a single column in the same location, rather than storing all data for a single row in the same location (row-oriented systems), and therefore is able to precisely access the data needed to answer a query, rather than scanning and discarding unwanted data stored in rows.

Core Data Services

Core Data Services (CDS) is a common set of domain-specific languages and services for defining and consuming semantically rich data models. In other words, the CDS layer provides a universal language to read and process data across different applications. You can create CDS views in SAP S/4HANA Cloud to model data from the database for analytical purposes, or to generate application programming interfaces (APIs) to allow other applications to consume the data. In general, CDS views are intended to be consumed by a user interface (UI), analytics, or other systems.

SAP Fiori Launchpad

The SAP Fiori Launchpad is the central entry point to SAP S/4HANA for all users on mobile and desktop devices. The launchpad is a shell that hosts SAP Fiori applications, and provides services such as navigation, personalization, embedded support, and application configuration. Each tile represents a business application a user can launch. The launchpad is role-based, meaning the applications displayed are based on the user's assigned business role. Hundreds of SAP Fiori apps are available across different lines of business and industries covering a wide range from analytical to transactional tasks.

SAP S/4HANA Cloud, Public Edition Scope

SAP S/4HANA Cloud, public edition Overview

SAP S/4HANA Cloud, public edition, is a ready-to-run cloud ERP that delivers the latest industry best practices and continuous innovation. With SAP S/4HANA Cloud, public edition, customers can see results right away with ready-to-work business processes built on proven industry best practices. You can stay ahead by getting the latest business processes and technology innovations with semi-annual release upgrades in August and February, which are automatically installed in your system by SAP on the dates defined in the release schedule. The fully extensible platform enables your unique business processes and you can easily expand as your needs evolve with the cloud architecture.

SAP S/4HANA Cloud, public edition Scope Highlights

SAP S/4HANA Cloud, public edition has a comprehensive ERP scope with end-to-end business processes delivered by preconfigured SAP Best Practices and selected industry-specific scenarios. Detailed information regarding individual scope items is available in the SAP Best Practices for SAP S/4HANA Cloud, public edition package in SAP Process Navigator.

To view country-specific versions of the SAP Best Practices, visit SAP Process Navigator and change the country version. Country/region-specific functions can be found in the SAP Help Portal.

SAP S/4HANA Cloud, Private Edition Scope

SAP S/4HANA Cloud, private edition Overview

SAP S/4HANA Cloud, private edition, is a tailored-to-fit cloud ERP that adapts to your organization’s unique transformation. With SAP S/4HANA Cloud, private edition, customers can move to the cloud at their own pace. A comprehensive library of ready-to-run business processes make it easy to start with a baseline, while the customization flexibility enables you to build highly tailored business processes that support industry requirements. SAP releases annual upgrades to enable you to stay current with the latest innovations, while giving customers the ability to manage the pace of change by rolling out innovations on their own timeline.

SAP S/4HANA Cloud, private edition Scope Highlights

SAP S/4HANA Cloud, private edition has the same functional scope and localization coverage as the SAP S/4HANA On Premise solution. This includes the extended line of business processes and all 25 industries. Detailed information regarding individual scope items is available in the SAP Best Practices for SAP S/4HANA (on premise) package in SAP Best Practices Explorer.

To view country-specific versions of the SAP Best Practices, visit SAP Best Practices Explorer and change the country version. Country/region-specific functions can be found in the SAP Help Portal.

Two-Tier ERP Deployment

Two-Tier ERP Deployment Overview

An enterprise resource planning (ERP) system needs to be both agile and reliable, so an organization can quickly respond to evolving business conditions, while also maintaining a sustainable environment that serves stakeholders and business users. A two-tier ERP strategy is when a company uses different ERP systems (either from the same vendor or different vendors) at different layers of the organization.

There are several possible two-tier ERP scenarios, but a common model is where Tier 1 serves as the global backbone running administrative ERP processes (for example, finance) and Tier 2 is tailored for localized business needs, a subsidiary, or a smaller business unit. This allows an organization to standardize on Tier 1 to meet functional and budgetary requirements, while maintaining flexibility with the business functions in Tier 2.

With SAP S/4HANA Cloud, public edition, an organization can quickly deploy the public cloud for a subsidiary, while keeping the total cost of ownership low. This approach offers agility to the subsidiary, while the tight integration with SAP S/4HANA or SAP S/4HANA Cloud, private edition deployed for the headquarters will ensure a high degree of visibility into the data and operations of the subsidiary.

Other market drivers to adopt a two-tier ERP could include:

  • Onboarding new acquisitions quickly.
  • Standardizing subsidiaries on a harmonized platform.
  • Preparing for an anticipated divestiture.
  • Adapting to new processes or entirely new business models.
  • Centralizing services like finance or procurement.
  • Extending the supply chain control with business partners.
  • Expanding through Joint Ventures.
  • Adapting to evolving geo-political situations.
  • Preparing for changing data residency regulations.

Two-Tier ERP Scenario Examples

In the Headquarter and Subsidiary scenario, the headquarters runs a highly customizable on premise or private cloud ERP and a subsidiary runs a standardized public cloud ERP with a specific scope. There is seamless integration between the Headquarters and subsidiaries, which allows the subsidiaries to maintain flexibility, focus on innovation, and onboard quickly.

The Central Services scenario is where and organization could have a line of business spin-off running a standardized public cloud ERP. For example, Finance would be a separate legal entity and run in the public cloud as "Shared Services", with the rest of the business running on a highly customizable on-premise or private cloud ERP. This enables a large organization with many different lines of business to keep up a fast pace of innovation. The structure also makes it easier to introduce new innovations into the business without interfering with the highly customized on-premise or private cloud system.

The Supply Chain Ecosystem scenario is where the headquarters runs a highly customizable on premise or private cloud ERP system and brings their subcontractors or dealers on a standardized public cloud system. Integrating an organization with their vendors, dealers, and subcontractors forms an entire supply chain network. With this model, there is high visibility and transparency across the supply chain and process automation results in a reduction of manual intervention.

Designing an Effective Two-Tier ERP Strategy

Building an effective two-tier ERP strategy is about more than just integration scenarios. It is critical to conduct a thorough analysis of the functionality necessary for each subsidiary or satellite, and the strategy must define how the interdependence of the organizations will affect reporting, in addition to business processes.

For example, the reporting strategy for intercompany transactions and enterprise-level reporting should be defined up front. In addition, master data management will follow integrated process requirements, and therefore should also be planned for early in an implementation project. Last, change enablement is multi-dimensional, because there are new systems that require sufficient end-user training, and potential changes to business processes with the interdependence between organizational entities.

Learn more about Two-Tier ERP in SAP Community.

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