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Which deployment model is right for you?

SAP Cloud ERP – Public Cloud vs Private Cloud

With SAP Business Suite, SAP Cloud ERP forms the foundation for end-to-end, AI-enabled business processes. Organizations can deploy it in a public or private cloud, depending on their starting point, transformation goals, and required level of standardization or flexibility. Understanding these options helps set a sustainable direction from the start.
Download Guide for Future-Proof Cloud ERP

Choosing the right cloud ERP deployment model is one of the most critical decisions in a company’s digital transformation journey. With the launch of SAP Business Suite, SAP has refined not only its portfolio but also how organizations should think about cloud ERP in the broader context of end-to-end business processes, data, and AI.

Within SAP Business Suite, SAP offers two primary cloud deployment options for its ERP:

  • Public Cloud - SAP Cloud ERP
  • Private Cloud - SAP Cloud ERP Private

Both are based on SAP S/4HANA Cloud technology, but they follow different principles in terms of standardization, flexibility, and long-term operating model. Understanding these differences is key to making a sustainable decision.

SAP Cloud ERP in the Context of SAP Business Suite

The public cloud deployment option, technically delivered as SAP S/4HANA Cloud Public Edition, is positioned as the transactional core of SAP Business Suite. The SaaS application is designed to work seamlessly with SAP Business Data Cloud and SAP Business AI to support end-to-end processes such as Lead-to-Cash, Source-to-Pay, Design-to-Operate, and Record-to-Report.

Rather than being a standalone ERP, it is part of a modular, suite-based approach, aligned to business buying centers such as CFO, COO, CPO, CHRO, and CRO. This positioning encourages organizations to think beyond ERP implementation and toward holistic process transformation.

The private cloud deployment option, technically delivered as SAP S/4HANA Cloud Private Edition, remains a dedicated cloud environment with a stronger focus on flexibility and system-level control.

Public Cloud: Standardized, Scalable, and Innovation-Driven

The public cloud option is built around standardized best-practice processes and delivered as a SaaS application. It follows a multi-tenant architecture with regular innovation cycles, ensuring continuous access to functional, regulatory, and technological updates from SAP. Key characteristics of the public cloud include:

  • Strong focus on Fit-to-Standard approach

  • Predictable, frequent innovation cycles

  • Tight integration with SAP Business Suite applications and services

  • Extensibility via SAP Business Technology Platform without modifying the core

Organizations typically choose the public cloud when they aim to:

Reduce

complexity and total cost of ownership

Accelerate 

time-to-value

Establish

future-proof foundation for AI-enabled, end-to-end processes
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Is SAP Cloud ERP Right for Your Business? Find out Now!

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Private Cloud: Flexibility and Control

The private cloud option provides a dedicated cloud environment. While it benefits from cloud infrastructure and operations, it allows for a higher degree of customization and system control compared to the public cloud. Organizations typically consider the private cloud when:

Complexity

Existing processes cannot be aligned to standard without significant risk

Technology

There is a strong need for system-level flexibility or specific technical configurations

Strategy

A phased or selective transformation strategy is required

SAP Cloud ERP Private, technically delivered as SAP S/4HANA Cloud Private Edition, is best described as a fully managed ERP system running in a dedicated cloud environment, typically on a hyperscaler-based IaaS or PaaS foundation, but fully managed by SAP.

Commercial Model and Starting Point

When choosing between public and private cloud, the decisive factor is less about licensing mechanics and more about where your organization is starting from and how you plan to evolve. SAP Cloud ERP follows a role-based, per-user model across both deployment options, but SAP differentiates clearly between net-new ERP adoption and modernization of existing SAP landscapes. Understanding this distinction helps set realistic expectations for packaging, scope, and the overall transformation path.

The public cloud...

is the default entry point for net-new SAP ERP customers, providing direct access to SAP Cloud ERP as part of SAP Business Suite with a standardized, fit-to-standard approach.

 The private cloud...

is primarily positioned for existing SAP ERP customers modernizing their landscape. SAP Cloud ERP Private follows its own packaging approach and requires more internal resources in project and operations.

For many organizations, this distinction becomes tangible very quickly. The public cloud is typically experienced as the faster and more straightforward path—with a clear starting point, defined scope, and fewer structural decisions upfront. The private cloud, on the other hand, often reflects real-world complexity: existing landscapes, phased transitions, and the need to carefully combine or separate deployments. For example, SAP Cloud ERP Private is not combined with the SAP Business Suite Finance and Supply Chain entry packages unless used in a separate scenario such as a two-tier ERP. While most other SAP Business Suite line-of-business packages can be integrated with the private cloud, doing so usually requires more coordination and design choices.

This is why questions around packaging, entitlements, and scope tend to surface much earlier—and feel more complex—in private cloud scenarios. As SAP Business Suite packaging and entitlements continue to evolve, we intentionally avoid detailing specific user types or metrics here. For a current and structured overview, we recommend this dedicated explanation:

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SAP Business Suite: Structure, Licensing, User Types

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How GROW and RISE with SAP fit in today

Today, SAP uses SAP GROW and RISE with SAP as strategic journey framings above SAP Cloud ERP and SAP Business Suite. They help contextualize different transformation starting points, while the actual solution decision centers on SAP Cloud ERP, public or private cloud, and fit-to-standard execution. Here are the main characteristics:

Journey perspective: starting fresh

  1. Focus on starting fresh with SAP Business Suite rather than converting legacy setups

  2. Uses pre-packaged, pre-integrated suite building blocks as the baseline

  3. Emphasizes speed, simplicity, and rapid adoption esp. for midmarket companies

  4. Clean core by default, with differentiation added incrementally

  5. Designed to start with a standard foundation and expand into the suite over time in a structured way

Journey perspective: transforming an existing ERP landscape

  1. Focus on modernizing an existing SAP ERP (ECC) landscape

  2. Strong emphasis on clean core governance during transformation

  3. Uses process and architecture insights and tools to guide change

  4. Supports a step-by-step transition away from legacy customizations

  5. Aligns IT architecture and business strategy throughout the journey

How to Decide: Public or Private?

There is no universal “best” option—only the right option for your transformation goals.

In practice, the decision between public and private cloud depends on factors such as:

1.     Desired level of process standardization

2.     Organizational readiness for change

3.     Long-term innovation and scalability goals

4.     Alignment with a broader SAP Business Suite strategy

Many organizations also follow hybrid or phased approaches, combining public and private cloud deployments depending on business context and maturity.

Walldorf Consulting supports customers in evaluating these options holistically—focusing not just on technology, but on business value, operating model, and organizational readiness

Final Thought

Choosing between public and private cloud is less about features and more about how your organization wants to operate and evolve.

With SAP Business Suite as the strategic framework, the focus shifts from “Which ERP?” to: How do we design future-ready, end-to-end business processes—standard where possible, flexible where necessary? We at Walldorf Consulting are experienced in all kind of Cloud ERP transformations and can help you to choose the right deployment model as part of the transformation process. Get in touch to talk about your challenge!

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