SAP offers the following deployment options (deployment types) for the current SAP Business Suite, as well as for SAP S/4HANA:
On Premise
In this common model, the customer acquires a license and installs the software in their own data center.
Cloud
In this model, the customer rents the software for a certain period of time. SAP deploys the software in the SAP-owned data center.
Hybrid
In this model, required applications are operated partially by the customer and partially by SAP in the Cloud. Both parts can be linked and integrated with each other.
Mobile
In this model, mobile devices access On Premise, or Cloud applications.
Cloud Models
SAP offers the following cloud models:
- Public Cloud
Public cloud software typically runs in a multi-tenant server, where multiple tenants, or customers share the resources of the server. This is similar to an apartment building where multiple tenants live within the same physical infrastructure and share certain resources, but each tenant has their own key to a secure unit within the building.
Maintenance of the building and apartment units is factored into the rent paid by tenants and taken care of when tenants need it. In public cloud, each customer's data and applications are hidden from the other customers, but because they are sharing certain resources and maintenance of the solution is taken care of by the cloud provider, public cloud is often the most affordable and efficient solution.
- Private Cloud
Private cloud software typically runs in a single tenant server, where only a single tenant (customer) uses the resources of the server. Software runs in a private network protected by a firewall, similar to an on premise system. The main differences between private cloud and on premise is who has responsibility for maintaining the server, and the license for the software installed on the server.
For on premise, a customer purchases the server and is responsible for maintenance. For private cloud, a third party provider owns the server and is responsible for maintenance. A customer pays a subscription fee to access the server over the internet and install software. In some cases, one cloud provider maintains the server, and another provider maintains the software installed on the server.
For example, with SAP S/4HANA Cloud, private edition, SAP is responsible for maintaining the business software, but the customer can choose to have their software on a server in an SAP data center, or a server in a data center from one of our hyperscaler partners. In this case, the hyperscaler partner is responsible for maintaining the server.
Private clouds offer more flexibility and customization than public cloud. If public cloud is an apartment, private cloud is a single family home on a plot of land.
From On Premise to Cloud
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.
- Infrastructure as a Service (IaaS)
- Platform as a Service (PaaS)
- Software as a Service (SaaS)
The following graphic explains and differentiates On-Premise, IaaS, PaaS and SaaS:
An example for IaaS is SAP's Managed IaaS Solution: SAP HANA Enterprise Cloud (HEC)
Two-Tier ERP Deployment
A two-tier ERP strategy is when a company implements different ERP systems for separate parts of the business. By combining two different deployments of SAP S/4HANA, a business can take advantage of the fast innovation in public cloud, while still allowing for a high degree of customization for strategic processes in the private cloud or on premise.
Scenario 1: Headquarter & Subsidiary model
Headquarters runs a highly customizable on premise or private cloud ERP and subsidiary runs a standardized public cloud ERP with a specific scope.
Scenario 2: Central Services model
Organization has 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
Scenario 3: Ecosystem model
Headquarters runs a highly customizable on premise or private cloud ERP and brings their subcontractor(s) or dealer(s) on a standardized public cloud ERP.