A buyer's guide to SAP S/4HANA Cloud Public Edition

What is S/4HANA Cloud Public Edition?

S/4HANA Cloud Public Edition emphasizes simplicity and standardization for companies pursuing a cloud-focused ERP strategy. Public Edition was previously called S/4HANA Cloud Essentials Edition as well as Multi-Tenant Edition.

Companies using S/4HANA Cloud Public Edition don't have to allocate internal resources for deploying the software and managing infrastructure because SAP hosts and administers the cloud environment. SAP installs upgrades and handles all other aspects of managing the platform, eliminating the need for companies to invest in dedicated on-site servers.

SAP has increased its emphasis on streamlined implementation when marketing Public Edition and is positioning this version of its SaaS offering with its Grow with SAP and Rise with SAP initiatives. Grow with SAP is focused on providing midmarket companies with preconfigured industry functionality and templated implementation approaches so they can save money and get faster time to value. Rise with SAP provides a similar approach but offers more ways to customize the software.

Functional scope

Simplicity comes at a cost. S/4HANA Cloud Public Edition is missing many of the features found in other SAP ERP software, though it does include core financial modules.

A subset of SAP's industry products is available for Public Edition, and localized versions are available for 59 countries at the time of this writing. Public Edition is also integrated with SAP SuccessFactors Employee Central, which focuses on HR; Fieldglass, which focuses on vendor management; Hybris, which focuses on e-commerce and CRM; and Ariba Network, which focuses on procurement and supply chain management.

Extensibility

The ability to customize and enhance Public Edition is more restricted than with other S/4HANA versions, and users who are familiar with SAP development tools will find many of them missing in Public Edition.

However, SAP has rolled out some new tools that provide considerable flexibility. For example, in-app extensibility gives power users the ability to carry out tasks such as creating new fields and adding business logic. A creative developer can use side-by-side development to extend S/4HANA Cloud Public Edition very effectively, though the tool lacks the familiarity of traditional SAP customization methods.

S/4HANA Cloud Public Edition can be challenging to integrate with third-party tools, so companies looking to carry out extensive non-SAP ecosystem integrations should potentially choose Private Edition instead.

Licensing

S/4HANA Cloud Public Edition is available only through a subscription, while some of the other S/4HANA configurations use a traditional perpetual license model.

As with many cloud-based products, hosting and infrastructure management costs are incorporated into Public Edition's monthly fees. Multiyear contracts are common because of the nature of ERP implementation and usage.

Who manages the environment?

S/4HANA Cloud Public Edition runs on the SAP Business Technology Platform (BTP), which was formerly known as the SAP Cloud Platform.

BTP is a multi-tenant, or public cloud, platform that SAP manages. BTP is more cost-effective than private cloud options, but Public Edition users have reduced flexibility and fewer extensibility options than they would if they used the more expensive, more complex S/4HANA variations.

Suitable implementation scenarios

S/4HANA Cloud Public Edition is limited to new -- otherwise known as greenfield -- implementations. In other words, Public Edition does not work for companies performing a direct migration from an older SAP product. Users planning a move from SAP R/3 or ECC will need to implement a new system from scratch.

However, given S/4HANA Cloud Public Edition's limitations, R/3 or ECC users would likely be dissatisfied with Public Edition. Many of the customizations created on an older SAP system would not work with this version.

The upgrade process

S/4HANA Cloud Public Edition upgrades are not optional, and users have no control over timing. SAP rolls out upgrades four times a year, and the upgrades are installed automatically.

Some users might find this approach to be an advantage, as cloud users receive new functionality more quickly without needing to carry out large-scale upgrade projects. However, other users might find forced quarterly upgrades to be disruptive.

S/4HANA Cloud Public Edition use cases

S/4HANA Cloud Public Edition users are often trying SAP for the first time or are subsidiaries of bigger companies that already use SAP. Public Edition offers a standardized platform for those subsidiaries, and integration with a large enterprise SAP implementation is relatively easy.

Public Edition does require some degree of standardization. New users should expect an emphasis on reworking their business processes to fit the software instead of the other way around. To quote a common phrase among SAP consultants, S/4HANA Cloud Public Edition users will need to "embrace the standard" to make their ERP implementation truly successful.

Users who can accept the limitations of S/4HANA Cloud Public Edition will enjoy the benefits of an SAP system at a more affordable price, and users can potentially move to a more robust and flexible SAP product in the future.

Jim Kofalt spent 16 years at SAP working with SME business applications and was a product manager for integration technology at Microsoft's Business Solutions division. He is currently the president of DX4 Research, a technology advisory practice specializing in ERP and digital transformation.