SAP offers its flagship ERP- S/4 HANA in the form of both on-prem and cloud versions. A lot of businesses get confused about which version to choose from. There are pros and cons to both SAP S/4HANA cloud and SAP S/4 HANA on-prem. Each has its own special features, which is why decision-makers must know the special requirement of their businesses to examine which version matches their requirement the most.

So, how exactly do SAPS/4 HANA Cloud and SAP S/4 HANA on-prem differ? Let’s find out!

SAP S/4 HANA On-Premise Vs. SAP S/4HANA Cloud

There are some visible and some not-so-apparent differences between SAP S/4HANA cloud and SAP S/4HANA on-premise.

From the Perspective of Cost Effectiveness

As with any cloud-based platform, SAP S/4 HANA cloud saves a lot of upfront costs. Businesses don’t need to deploy on-prem hardware to run this version of SAP. They just require a decent enough computer system to be able to benefit from the power-packed ERP system.

However, we’re not saying this to look down upon the on-prem version of SAP S/4HANA. If a company already has on-prem servers and computing hardware and is already using older versions of SAP on its premises, it makes more sense to opt for the on-prem version of SAP S/4 HANA.

From the Perspective of Update-Frequency

One of the best things about the S/4 HANA ERP software solution is that you get regular updates in a disciplined manner. However, the frequency of updates differs depending on which version of the software the business is using.

The cloud version of SAP S/4 HANA receives quarterly updates, while the on-premise version receives annual updates. Hence any company that wants to leverage the first mover’s advantage must opt for the cloud version of SAP S/4 HANA.

From the Perspective of Offloading the Complexity of Managing an Intricate System

The reason why SAP S/4 HANA can cater to a wide range of businesses and their use cases is the fact that this SAP solution is replete with so many functionalities. And because of this exact thing, it becomes extremely cumbersome to manage the backend of this system.

Businesses with specific requirements need to employ custom codes to make the ERP system work the way they want. Managing this complexity can quickly translate to exponential HR cost, time consumption, and process obstruction.

This complexity can largely be mitigated if businesses opt for the SAP S/4 HANA cloud. The technological complexity is entirely handled by SAP. However, companies that have the bandwidth to manage the backend will enjoy greater levels of freedom if they opt for the on-premise version.

From the Perspective of Scalability

As with any SaaS system, cloud SAP services like S/4 HANA offer unparalleled flexibility. No need to buy additional hardware when the demand, functions, or the number of users increase. This helps businesses avoid the issue of hardware redundancy.

Best Practices to Consider for SAP S/4HANA Migration

Develop a detailed project plan and timeline.

Creating a project plan that outlines key milestones, activities, and timelines is critical to ensure a smooth and successful migration.

Conduct a thorough assessment of the existing system.

Before starting the migration, it’s important to evaluate the existing SAP system to ensure compatibility with SAP S/4HANA, assess customizations or extensions, and identify critical business processes and data for migration.

Engage with a third-party vendor or partner.

It can be helpful to work with a vendor or partner with expertise in SAP S/4HANA migration to provide guidance, support, and expertise throughout the process.

Prepare the data for migration.

Ensuring the quality of the data to be migrated is critical to avoid potential issues or errors in the new system. Conducting a data quality review and addressing any issues before migration can save time and reduce risks.

Provide training and support to end-users

Preparing end-users for the new system and any changes to business processes is critical to ensure a smooth transition. Providing training and support can help minimize disruption and improve user adoption of the new system.

Perform thorough testing.

Testing the new system thoroughly is critical to identify and resolve any issues before cutover. Conducting various types of testing, including integration testing, user acceptance testing, and performance testing, can help ensure the new system works as expected.

Monitor and optimize the new system.

After migration, it’s important to monitor the new system and optimize it as needed to ensure performance and stability.

Transition For a Better Future

Make the transition to SAP S/4 HANA for a streamlined, efficient, and future-proofed business and consider the above-mentioned points attentively.


In the debate of SAP S/4 HANA cloud vs on-premise, none of them is the winner or loser. While the cloud version does offer unparalleled flexibility and cost-effectiveness, the on-premise version can be tweaked exactly the way businesses want.

Businesses that are sitting on the fence should take the consultation service of an SAP S/4 HANA vendor to make the right decision, and who better to reach out to for that other than Uneecops

Business Solutions (UBS) is a member of United VARs, We are the SAP implementation platinum partner that helps with SAP S/4 HANA Cloud public solutions. Their panel of experts ensures that your business gets to derive the maximum benefits from SAP S/4HANA while not falling behind in the competition. Come, let’s help you get started.

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Arif Rashid is a freelance writer, and he writes content for categories like education, fashion, Technology, Marketing etc. His career focuses on consistently delivering measurable results with greater product success.