SAP Infra On-Premise VS On-Cloud – Difference

SAP Infra On-Premise VS On-Cloud – Difference

SAP Infra On-Premise VS On-Cloud – Difference

Deciding between on-premise and cloud environment is a complex process, whereby a number of factors come into play. For starters, the business requirements need to be properly analyzed to tip the scale toward one approach or another. Once decided, then there is the need to choose a reliable technology partner, which can be troublesome as there are multiple vendors offering services of varying levels.

SAP Infra On-Premise

SAP S/4HANA on-premises is the ERP business suite based on the SAP HANA in-memory database. With on-premises, the customer manages everything, including the HANA database, applications, data centers, OS, middleware, servers, virtualization, and networking.

On Cloud

SAP S/4HANA Cloud is the SaaS version of S/4HANA. SaaS deployment means that users can take advantage of much of on-premises S/4HANA’s functionality without needing the hardware, databases or IT staff required for the on-premises version. 

On Cloud

Let’s compare S/4HANA Cloud and on-premise version on common customer concerns.


Licensing Model

Cloud: Subscription licensing

On-Premise: Traditional licensing

Infrastructures and maintenance

Cloud: SAP provides the system and is responsible for the system maintenance

On-Premise: The customer is in control of deployment and maintenance with dedicated own IT staff


Cloud: Although able to be customized to some extent, there is far less flexibility compared to on-premises.

On-Premise: There is far more flexibility with and control of customization since the company manages all customization in-house.



Cloud: The implementation is faster than S/4HANA on-premises since the cloud version uses a ready-made platform that has already been provisioned, implemented and tested by the cloud provider.

On-Premise: Implementation takes time, cost, effort and the right personnel to set up a new environment. There may also be a need to purchase additional hardware or software to implement new features.



Cloud: Integration among various corporate systems can be complex and involves greater security risks due to data being sent over the internet.

On-Premise: Data transfer among systems is faster, and integration over the internet is relatively simpler.


Upgrades and support packages

Cloud: There is less control over an upgrade schedule compared to on-premises. However, the cloud provider can inform the customer in advance about the impending upgrades, and the customer can choose the timing and functionality of the upgrade.

On-Premise: The company decides the frequency and schedule of software upgrades or whether to implement the latest support packages. This option is time-consuming and expensive, and involves technical or functional resources.



Cloud: Scaling up or down is easier, faster and cheaper to meet the changing needs of the company.

On-Premise: This approach needs long-term planning and commitment for resources required for scaling.

 On-Cloud Advantages

Accessibility: With cloud software, applications can be accessed from anywhere at any time via any device or a web browser.

Affordability: With cloud hosting, there is no upfront cost, whereby reasonable payments have to be made on a regular basis like any other operating expense. This includes payment for maintenance, support services, daily backup chargers and licensing.

Maintenance: since it is a hosted software, there is no need to worry or invest time in the maintenance of the software or the hardware it is installed on. The cloud service provider is responsible for compatibility and any upgrades.

Security: Cloud service provider employs security measures that the company would find extremely high if it were to be done inhouse. Hence the better the measures, the better security it offers.

Deployment: Cloud software can be deployed in a matter of hours or days as it is done via the internet, whereby there is no need for a physical server to be in place.

Scalability: Cloud technologies offer greater flexibility as these can be scaled up on-demand as per the companies requirements.

Costs: Since they need to maintain on-premise servers is eliminated, the cost of power and other resources are not present.

On-Cloud disadvantages

Connectivity: In order to remain productive, there is a need to have access to reliable internet at all times.

Costs: The total ownership cost might be higher compared to an upfront cost if spread over the systems entire life cycle.

Customizable: Complex development needs may sometimes not match a cloud solution.

SAP Infra On-Premise Advantages

Cost: The total cost of ownership is lower as compared to the recurring payments if spread over the systems entire lifecycle.

Control: Since it is your hardware, data and software platform, you have complete ownership and control;. Any changes, configurations, and upgrades are done at your discretion.

Connectivity: There is no reliance on external factors such as the internet to access your servers

SAP Infra On-Premise disadvantages

Cost: There is a large upfront capital cost that has to be incurred, along with support and functional costs.

Maintenance: Any hardware and software, storage, data backups, and disaster recovery has to be maintained on-premise. With limited technical resources and budget, this can become an issue, especially for smaller firms.

Deployment: As the software has to be installed on servers and individual computers, the deployment takes longer.

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Get in touch with TechPoint team to understand the positive changes that SAP S/4HANA will bring to your business & help to invest less while migrating with standard & experienced approach



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